Article Financial data you need to track to maintain a healthy client base

The foundation of any healthy freelance translation business is a good client base. But keeping your client base in the best shape, and your business moving in the direction you want it to, takes work.

A huge part of holding onto the clients you like, and deciding when it’s time to say goodbye to certain clients (so you can make space for new ones) is tracking the numbers.

We know, we know. Unless you’re a specialist in financial translations, chances are that as a translator, you’ll take words over numbers any day of the week. But as a business owner, there really is no getting away from dealing with the figures.

And we promise that the more you engage with them, the less intimidating they’ll seem, and the more confident you’ll feel about your business.

But first, are you tracking your time?

If we sound like a broken record, then… sorry, not sorry! We’re gonna keep saying it: TRACK YOUR TIME.

Tracking the time you spend on your client work will give you so much valuable information about your business and clients.

Without time tracking data, you’ll know how much you’re earning from each of your clients if you add all your projects up, sure.

But you’ll struggle to calculate how your rates actually work out.

Say you’re charging per word, or per minute. That’s all well and good, but how much does that rate work out at per hour?

Your time is valuable, and the answers might surprise you, as two clients paying you the same per-word rate could translate into very different per-hour rates.

And without the data to refer back to, you’ll struggle to estimate how long different jobs will actually take you.

We could go on and on about time tracking, but for the purposes of this article, the main point is that a lot of the financial data we’ll mention below can only be calculated with time tracking data, so if you aren’t tracking yet, now’s the time to start.

Deal? Deal.

Now we’ve got that out of the way, here’s an overview of the financial data we believe is essential to monitor to keep your client base looking healthy.

1. Sales per client

The first thing it’s really important to keep track of is the amount of work coming in from each of your clients, and how that works out in total. Tracking the number of projects you receive or the number of invoices you send isn’t helpful, because we all know that one project job can be teeny tiny or huge. It’s about how much you’re earning when you tot all those projects up.

When you know how much you’ve earned from each of your clients, you can then establish whether one of your clients is responsible for a hefty chunk of your income.

As a rule, we’ve found it’s a good idea for freelancers to try not to allow just one of their clients to account for more than 50% of their income. That’s because it makes you very dependent on just one client who could, for whatever reason, decide they no longer require your services at the drop of a hat.

Every freelance business is different, of course, but if you find you’re relying financially on the work you get from just one client, it might be time to focus your energies on expanding your client base and taking on some more clients that can even out the imbalance.

Because then, even if that one healthy income stream suddenly dries up, you’ll still have others trickling in and won’t be left high and dry.

It’s also a good idea to look at the sales for each of your clients and consider whether the workload you get from them is fairly consistent, totally random and unpredictable, or there are certain times of year when they’re more likely to send a higher volume of work your way.

That will help you plan your time and move towards a more consistent income, as you’ll be able to predict who will be sending you what, and when, and perhaps concentrate on finding more clients who can provide a consistent workload, or are likely to need your support at times when your other clients are quieter than usual.

2. Sales per service

Alongside sales per client, sales per service is another really useful metric to track.

You can consider all kinds of things:

• Which of the services you offer generates the most sales?
• Does one of your services account for more than 50% of your income?
• Does one of your working languages dominate your client work?
• Does one of your niches attract more work than another?
• Does one of your services tend to offer a more stable income than the others?

All this information is incredibly useful when it comes to making business decisions. After all, you’re only one person, and you can’t do everything, so you’ve got to make conscious, informed decisions about what to focus your marketing on.

If a service is generating lots of sales (bonus points if you enjoy providing it) you can consider how you can target more of your dream clients in need of said service, or think about how you can package the service up, or offer complementary services or add-ons to your existing clients.

On the other hand, if one of your services accounts for more than 50% of your income, you could also think about how you could diversify (yep, we love a bit of diversification) to reduce that dependency.

3. Performance and profitability

We’ve touched on this above, but your performance is another big thing you need to be tracking to know what’s what in your business.

What’s your “performance”? We’re glad you asked!

It’s the number of words you can actually translate or transcreate, or the number of minutes you can subtitle or transcribe, or whatever it is you do for your clients, in any given hour.

That’s important because, at the end of the day, it really doesn’t matter how much you’re charging a client per word. If you can work quickly for a certain client, then it might end up being more profitable than work for a client that’s super slow-going, even if, on the face of things, they’re paying you more.

One of your clients or services might have great sales, but when you look at how profitable they actually are, you might find that the numbers aren’t as healthy as you’d like them to be.

This can help you get clear on what rates work for you, and allow you to set a minimum rate you’ll actually stick to, knowing that anything lower just isn’t worth your time.

It can help you make decisions about whether or not to accept certain jobs, especially large-scale ones that will stop you from being able to accept other, potentially more profitable jobs that might crop up.

Knowledge is power when it comes to negotiating with clients, and having financial data to back your decisions up will make you less likely to cave when you’re put under pressure, or are having a quiet week and are tempted by a job you know, deep down, isn’t right for you.

You’ll also be able to consider how you can capitalise on this information, getting more of the work that works out as the most profitable for you.

But remember, look beyond the financial, too

All that being said, remember; the financial aspect isn’t the be-all and end-all. There might be less profitable services you really enjoy providing, or super profitable clients who are a nightmare to work with.

Your client base shouldn’t just be made up of profitable clients, you deserve clients who value you, and who you can build rewarding working relationships with.

Financial data can really help you make freelance decisions, but don’t forget to listen to your gut, and don’t let the financial aspect be your only guiding light.

LSP.expert makes tracking all this data so easy, you’ll have absolutely no excuses not to keep an eye on it! In fact, with all the fascinating reports it creates for you, your biggest problem might be stopping yourself from compulsively checking them more often than you should!

Let us do the hard work of tracking the financial side of your business, and create a client base that makes you excited to open your laptop and get stuck in.

See what it’s like to have LSP.expert on your side with our 30-day free trial, absolutely no strings attached.