As a business owner, I’m expected to have insight. In normal times, people occasionally ask me for advice or direction, but in these extraordinary times friends, employees, clients, subcontractors are demanding vision… and not just any vision, but night vision in these dark times.
So what do I see in the crystal ball?
Well, first of all, remember that the secret of crystal balls lies in careful adjustement.
So I’ll start by adjusting my crystal ball clockwise:
– As of mid-September, GALA members were still indicating “major growth in work volume.” Usually, those trends have some tail. Also, more recent discussions on LinkedIn amongst professional still showed business was strong overall.
– In the US, we’ve been in a recession for about a year now. Most recessions don’t last more than 18 months, so there should be a maximum of 6 months of suffering in front of us.
Now, for the counterclockwise adjustments:
– MLV insiders I’ve been talking to recently indicate that big players translation/localization budgets are down anywhere between 5% and 20% for 2009.
– The current crisis is bigger than anything we’ve experienced, so why would the translation domino be left standing once everything is said and done?
Hmm… So now the crystal ball is adjusted and ready to tell me what’s going to happen, or is it?
Well… to tell the truth, I’m very much prediction-adverse.
In an extreme situation like today’s, where many (most?) people expect the translation industry to hit a wall within a few months, should we be pessimists and believe in self-fulfilling prophecies, or optimists with a contrarian mind?
How should I know? And why should I know?
What I know, is that by increasing flexibility you lower the risk (and unfortunately the reward), and that by making a strong bet one way or another, we’re standing to lose too much if we’re wrong.
So at e2f, as we can’t predict the future and as our business visibility is at most a few days as usual, we’re just waiting for things to happen, for this crisis to run its course, and meanwhile we try to abide by the following rules in order to increase flexibility and hopefully minimize the blows:
- Diversify end-client domains (let’s not have all our clients in the banking or in the automobile industry for example!).
- Diversify client countries, and currencies: having income streams in different currencies lowers the currency exchange risk.
- Diversify supplier currencies (instead of having all the contract agreements in euros, it makes sense to have some in dollars and some in euros).
- Maintain a healthy mix of internal and external resources. External resources are usually more expensive, but offer more flexibility. It would not be wise to be stuck in a period of intense growth or deep recession with internal resources only!
- Avoid to be over-exposed to the loss of any single client.
- Spend more time and money than usual on sales and marketing activities in order to renew client mix.
- Closely monitor costs and identify and restrict pockets of non-productivity.
- Prefer clients with a nimble business model and lower overhead costs, who have a greater chance to survive if the worst happens.
So my crystal ball is not telling me much, but I believe that our flexibility will allow us to quickly react to changes in market conditions, regardless of their direction, while avoiding to be exposed to a set of conditions that would swamp us out.
Of course, by not sticking our neck out and taking big stands, we lower the chances to “make a killing”, but I feel we considerably increase our chances of survival.