How To Start An Online Translation Business

Do you enjoy learning foreign languages and exploring different cultures? Are you interested in starting your own business? Well, if you chose to read this article, the answer is probably yes to both questions.

Since globalization gained momentum, there has been an increasing demand for translators and translation services. Within the next seven years, the demand for interpreters and translators is expected to grow by 29%, considerably faster than other occupations.

Multinational businesses, immigration, and the internet have all contributed to a greater degree of interconnectedness. Some of the larger translation services employ thousands of translators worldwide.

It’s a terrific opportunity for those who are fluent in more than one language and want to contribute to better intercultural understanding and cooperation.

The following are some of the activities that a translation business owner might engage in on a daily basis:

• Finding and contacting new clients;
• Contractual negotiations with clients and other translators;
• Translating documents;
• Making use of reference materials;
• Keeping track of business records;
• Preparing invoices;
• Accounting and bookkeeping.

There are two main kinds of translation agencies, SLVs, and MLVs. SLVs are single-language vendors – agencies that translate into only one language. MLVs are multilingual vendors – agencies that translate into multiple languages.

Historically, MLVs were larger companies that often outsourced translation work to SLVs, but now, because of the proliferation of digital tools, MLVs can be run with small teams or individual translators.

The first decision you’ll have to make is whether you want your agency to fall under the SLV or MLV category. The SLV option might be preferable if you are fluent in both the source and target languages and wish to maintain strict control over the translation quality.

However, if you’re looking at this venture more from a business perspective, you might want to consider the MLV options since it has a larger market.

Finding Your Market

The translation market is notoriously fragmented, with thousands of agencies competing for the same contracts with big companies or individual clients. That’s why it’s better to find a niche and specialize.

This will have a strong impact on subsequent decisions, so it’s important to take your time and explore your options carefully. Let’s say you want to work with software companies. In that case, you’ll want to set up an automated workflow since most software companies follow agile practices. On the other hand, if you want to target the legal market, all the translators you work with need to be certified legal translators.

So, how do you know what niche is right for you? You’ll need to think about both your personal preferences – the types of translations you’d want to do on a regular basis – and market needs – you might like a niche with low demand and fierce competition.

The ideal scenario is to pick a niche that interests you, have a sizable target market, and few competitors.

Business, government, healthcare, and education are just a few of the various niches you can choose from. Many translators also provide subtitles for audio/visual multimedia presentations as part of their services.

Costs & Profit

One of the advantages of starting a translation agency is that you can run your business 100% remotely, even if you hire extra translators or use a virtual assistant service for administrative work, which keeps startup costs low.

You’ll want to have a comfortable home office to work from, so invest in good lighting, office furniture, a fast internet connection, a computer, and an all-in-one printer. You can also benefit from professional translation software.

Your ongoing expenses will consist of office supplies, internet connection, phone, advertising, and paying the other translators that you’ll work with.

How much revenue you bring in will depend on the complexity and volume of the documents your agency translates. According to the American Translators Association, the average freelance translator earns $64,000 per year. There’s no standard fee, but the industry average is about 11 cents per word. Keep in mind that this rate also varies on the complexity and length of the document, as well as how soon the client wants the translation.

You can increase your bottom line by offering localization services and visual content to complement the translated content. To succeed internationally, companies must provide information about their goods and services in the languages of each country where they intend to do business.

Paperwork

To set up a translation business, you’ll first need to form a legal entity. The most popular ones for any kind of business are sole proprietorship, partnership, limited liability company (LLC), and corporation. A legal entity, such as an LLC or corporation, will shield you from being held personally liable in the event that your translation agency is issued.

You will also need to register for and pay state and federal taxes. For this, you will need to apply for an employer identification number (EIN) through the IRS website, a free fax app, or mail. You’ll have different taxation options depending on the legal entity you chose.

In terms of banking, you’ll want to protect your personal assets, so it’s better to open a separate account. When you combine your personal and business accounts, you put your personal assets at risk in case of a lawsuit. Having separate accounts will also make accounting and tax filing easier.

Building business credit can help small business owners get better rates, lines of credit, and other benefits. As a small business owner, it is essential to keep track of all of your business’s spending and revenue.

Your translation agency will also need a business license and insurance. The requirements differ from state to state, so you’ll have to do some research on the specifics of your location.

Insurance, like licenses and permits, is required for your business to operate safely and legally. There are a variety of insurance policies available for specific kinds of businesses with specific risks. If you’re not sure which applies to your company, start by researching general liability insurance, the most common type of coverage for small businesses of any kind.

If you’re going to hire employees, your state may require you to also get workers’ compensation insurance.