Sounds crazy, right? I mean, right in the middle of trying to get more and more clients, someone tells you to let them go doesn't sound like the brightest idea. This is what I thought too, but then I took a look at some numbers.
Imagine you're a couple months away from your financial goal for the year. Btw. do you set financial goals or plan budget at all? If not, you probably should. But that's another story. Back to the huge amount of work you have: You feel awesome because business is booming and the amount of work is overwhelming. Colleagues are non-stop in the office. You have a lot of invoices to write, money just keep pouring in...
Yeah, but we're not that lucky. Because it's not only coming in. Tha money goes out too.
Why you need to fire your #t9n #l10n customers who are losing you money?
Unfortunately, when you work for money savvy clients, and they tend to send you a bunch of small translation projects, there is a line you have to draw and never to cross. And that line is consisting of your "negative numbers".
What we are talking here is not that your company is losing money per sé. Far from it. You have a ton of work and you are doing great. But something seems off. The numbers on the Excel sheet used by your translation agency, they just don't add up. The sums are off. Those charts in Excel that you have made with your own sweat, tears and blood are showing something different than what you see in the bank.
You feel you should be doing better, you could be doing better, but cannot, because you don't see and realise:
When you discover such projects, the best thing to do is to do some deep checkin' of what's going on. Because it might be a temporary glitch, maybe your customer is having a hard time and doesn't have enough work for you.
You need to be able to find such customers easily. And the next time they send you 12 words for translation that takes you 3 hours work, you just simply deny the project. You tell 'em (well, politely) that they're fired.
I know this is not so easy to do, and sounds contra-productive, but the truth is, sometimes you need to pull the plug. Toughen up.
Maybe it's just you, you're a good person and want to help everyone, and you think you are making progress and profit because your projects gross profit margin is showing positive numbers, but the reality is, this customer - as much as you like the customer - is bleeding you dry.
First of all, you need to take an overall picture of your projects. There are different approaches to this "controlling" but basically:
You want to take a look at your revenue and expenses not just on the project level. Because if you're getting paid $100, and your freelancers cost $80 that looks like a profit of $20. Simplifying things, I know, but that's the easiest way to present it.
Only problem is you didn't calculate the time of your Project Manager, your Coordinator, your own time, office expenses, phone bills, gas for the SUV you drive and who knows what else not.
If this was the only project for that one client that month, well, you need better clients. Or more expensive projects. You pick which one is more likely to happen.
The way to understand this is to put all that data into a good system, like, khm... a translation project management system, such as miniTPMS, and have it all presented to you in a nice little table, or a colorful chart or whatever. Have it texted to your phone, or projected on a big screen in your office.
Warning: Not every negative number is bad number!
Let me explain, it's very simple. There might be a long term cooperation between you and your customer, say, they have been sending you work for 10 years. You have made thousands, tens of thousands in revenue because of them. You bought your new laptop because of them, invested in an expensive Trados licence because of them.
You don't need to go from one day to another and tell them to sod off just because in the last two months they have sent you only couple of really-really small projects.
Look at the big picture. There is a chance they will get back to full throttle again, and send you tons of work. You don't want to lose a client like that.
The ones you should lose, are time-vampires, constantly asking for discounts, shorter deadlines, and generally are not so fun to work with in the first place.
In order to do so, though, you have to be able to pull exact data. Punctual. Up-to date.
The feeling of having the right data is liberating. And, it also gives you the ability to focus your strength on getting new Customers, or to give more to those Customers who are already "feeding" you, even to go and try to talk to the currently "Bleeder" Customer to maybe reconsider giving you more work, or other work, different languages so that you can meet your goals.
Personally, I'm all for the fluctuation of money. If we can work and get to cover the operating cost and have zero profit with one customer, it is still good business. You should consider the same. Because it builds relationship, it shows commitment, it makes your Client happy and they are more likely to send you more once they have...
Unfortunately, there is always a black sheep. And in real life, those are the ones we politely decline when they ask us for business, and we send them elsewhere.
Want to know your real numbers? Click here and I'll tell you how to do so in our e-mail series.