How to Start a Translation Business
With increased globalization and a growing number of businesses operating online with a remote workforce, translation services are in hot demand. Speaking and understanding a different language will always help bridge communication barriers and provide deeper insights into cultures and costumes.
If you have a knack for languages, a qualification to support your professional translation services, and are looking for a way to be your boss, starting a translation business can be a very rewarding opportunity.
A translation business provides language-related services such as translating business documents, interpreting speech, and localizing content for clients. These services are essential for companies and organizations that operate globally or have a multilingual customer base.
According to IBISWorld, the US translation services industry, measured by revenue, commands a $9.5 billion market size in 2023. This industry is highly fragmented, with small and medium-sized businesses accounting for most of the market share. However, the top 50 firms in the US command 68% of the total revenue.
This industry also includes freelance translators, language services providers, and translation software companies. That said, artificial intelligence has certainly impacted this industry; however, AI cannot replace humans for now – it still lacks an understanding of context and cultural nuances.
The demand for translation services is high, and the industry is expected to continue expanding in the coming years. The industry is experiencing significant growth of 6.4% annualized between 2018 and 2023, driven by an increase in global trade and the rise of e-commerce. With more businesses operating online, there is an ever-increasing need for localization services to ensure that website content and product descriptions are appropriate for the target market.
Your target market includes businesses, corporations, and organizations that operate globally or have a multilingual customer base. This includes sectors and industries such as manufacturing, technology, healthcare, and e-commerce. In addition, government agencies, non-profit organizations and individuals may also require translation services.
A thorough market analysis will identify gaps in supply, especially in specialized translation services that may require an understanding of health sciences or engineering, for example.
Starting any business can be overwhelming, but taking the time upfront to create a checklist of all the necessary tasks can help lay out a roadmap to help streamline things.
To get started, use this checklist to ensure that all steps are taken into consideration before launching your new translation business.
Step 1: Determine the Translation Services You Will Offer
With the dramatic increase in communication across the globe, the demand for translators has increased, but with that comes uncertainty in deciding what to translate. In many cases, a new translation business will start out by focusing on a particular language and providing general translation services, but by specializing in a particular niche, whether it be translating business documents, legal translation, medical translation, or technical translation, the rates you charge can go up dramatically.
Be sure to research potential opportunities outside of general translation to find higher-paying work.
Step 2: Develop your Translation Skills
Becoming a professional translator is not something that can be achieved overnight but with dedication and practice, anyone can master the art of translation. Before taking on paying clients, the best way to develop your skills is to invest in certification courses or learn under an experienced translator who can provide insights into the business. Additionally, immersing yourself in activities that require you to hone your language translation skills such as writing, reading, and online courses are a great way to start off as a beginner.
Step 3: Form a Business Entity
A business entity (also referred to as a legal entity or structure) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business entity is best for a translation business, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is that the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
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Step 4: Apply for Business Licenses and Permits
While there are no licensing requirements specifically for translation businesses, there may be a few to look at before starting your business.
As there are no requirements, it may be beneficial to first become a certified translator as it demonstrates competency, improves your skill in providing accurate translation, and helps better prepare you on how to operate a professional translation service.
For starters, you may have certain registrations depending on the business entity. In some states, sole proprietorships are required to register a business name, while LLCs don’t have this requirement. Additionally, while a business license is a rare state requirement, cities require one, even for a home-based business.
Step 5: Set Up your Workspace
Establishing an effective workspace for your translation agency can be critical to its success and help you manage your workload more efficiently. To get started, it’s best to create a comfortable office space with plenty of natural light and regular ventilation.
Set up the necessary technology such as computers, printers, and scanners so that you have easy access to online resources your clients may need.
Setting a dedicated workspace for your translation business should also involve establishing a strict schedule with designated times of the day to conduct research, write translations or take calls from clients.
Step 6: Open a Business Bank Account
Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 7: Get your Marketing Plan in Place
Promoting a new translation service requires creative and innovative strategies to make it stand out in the crowded marketplace.
To find customers fast, utilizing freelance platforms like Upwork and Fiverr can help you find paying customers that may become long-term clients. Using a translation agency that hires freelancers is another option, though while convenient, it is usually lower-priced translation work.
Being active on relevant social media accounts, LinkedIn, and industry forums is an effective way to get the word out quickly and inexpensively, as well as organically gain followers and potential clients for the business. Joining social media groups, such as online forums related to translation businesses or the industry you are trying to target, can also be helpful in increasing visibility.
Networking events like conferences, trade shows, and local Chamber of Commerce events can also help build connections with people who might be interested in your services. Law firms, financial institutions, web designers, and hospitals are often looking for translation services.
Last, a great website and paid advertising on search engines can be another great way to further drive awareness of the business. Be sure to all testimonials from your happy clients to demonstrate the positive impact you had on clients.
With the wide spectrum of services and industries that need translation services is so wide, there isn’t a one size fits all answer, so there may be a bit of experimentation to find the best path for your business.
This material is property of StartingYourBusiness.com
Common Questions When Starting A Translation Business
How much does it cost to start a translation business?
The startup costs of a translation business are very low, making it a great business to get into. The main expenses to consider are office space, translation software, laptop, and marketing costs to attract new clients.
If you plan to work as a freelance translator, you can operate from a home office and have far lower start-up costs and overheads. In addition, freelancing offers the opportunity to start small and grow your customer base without the burden of significant initial expenses.
How much money can you make with a translation business?
Your income will vary depending on the size of your business, the scope of your services, and the project’s complexity. Freelance translators typically charge by the word or by the hour. Translation businesses may charge their clients a flat rate for their services or a percentage of the project cost.
According to the US Bureau of Labor Statistics, the median annual pay for translators and interpreters was close to $50,000 in 2021. The average industry rate for translation services currently sits at around $0.15 to $0.25 per word.
Are there grants to start a translation business?
It’s extremely rare to find a grant to start a translation business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov, and you can check on your state’s economic development office to see if they have any grants available.
What skills are needed to run a translation business?
Excellent Language Skills. To start your translation business, you need a strong understanding of at least one foreign language and a good grasp of the target market’s culture. Additionally, you need excellent written and verbal communication skills. Most professional translators hold a Bachelor’s degree, most commonly focusing on communications, foreign languages, and business.
According to the US Bureau of Labor Statistics, “students who study technical subjects such as engineering or medicine may be able to provide a higher level of interpreting and translation.”
Completing a translation certification will significantly help attract and retain customers to your services.
Good organizational and computer skills. Your ability to work independently and manage multiple projects – and deadlines – simultaneously will be crucial to the success of your business. Make sure you factor in time for quotes, connecting with clients, and invoicing.
Familiarity with translation software and tools is also invaluable. Applications and technology are constantly changing and improving; staying up to date with the latest trends in your field can mean savings and an increased range of services you can offer. For example, artificial intelligence and machine learning are already improving the speed of translations.
Starting a translation business can be a rewarding and profitable venture. With the increasing demand for translation services, the industry is expected to continue growing in the coming years. This is a good business idea if you are fluent in at least one foreign language, have a good understanding of the translation industry, and are happy to work independently and juggle a diverse range of tasks.