Impervious industry
How translation businesses sailed through the recession.
By Diane Hess
Like any new business owner, John Labati, chief operating officer of G3 Translate, was worried in mid-2008, when the financial crisis seemed to be sucking the life out of the U.S. economy.
Determined not to let the macro environment pull down his translation services firm, then two years old, Mr. Labati reviewed his budget. He nixed plans to add to his eight-person staff, reduced his marketing budget by 10% and began to offer tiered pricing.
Meanwhile, G3 Translate got a surge in calls from businesses looking to take advantage of overseas markets.
“More than a dozen companies in the consumer goods and pharmaceutical sectors came to us in late 2008 and 2009 to translate surveys and marketing materials as they decided whether or not to launch products in Europe and Asia,” says Mr. Labati.
Furthermore, a handful of manufacturing companies, experiencing growth in their Latin American and European businesses, hired G3 to translate instruction manuals. Rather than declining, revenue grew 30% in 2009, to $2.4 million.
The labor-intensive translation industry—much of it based in multicultural New York—is sustained by one crucial factor: No one has invented a cheap technology able to cope with the complexities of translating a language and culture. Even in the hard-hit financial sector, demand rose for translation services as companies reached out to reassure overseas clients that they weren't going under.
“The headlines were startling, and I thought I was going to have to change my business plan entirely,” says Leticia Molinero, president of Leticia Molinero Translation Studio, “But on the contrary, banks increased their market outreach to clients abroad.”
One of Ms. Molinero's customers, a major private banking corporation focused on Latin America, reassured clients through Spanish and Portuguese newsletters, fact sheets and other missives that their assets were protected. Revenue at Leticia Molinero Translation Studio in 2009 rose 15%, to $200,000.
Long-term trends have also boosted the field. U.S. government spending on language services rocketed to $1 billion last year from $100 million in 2000. The wars in Iraq and Afghanistan, especially, have increased the need for translators.
SPEAKING UP
Global demand for translation services has grown 15% to 20% since 2006, according to research firm Common Sense Advisory Inc.
The American Translators Association has 11,000 members, up 10% in the past two years.
2,300 people came to ATA's conference in New York City this year, up from 1,600 the previous year.
Locally, the rising number of immigrants has also had an impact. At language services provider Geneva Worldwide Inc., where government contracts make up 85% of business, revenue grew 15% in 2009, hitting $5.75 million.
“The government can't just say that it is going to stop servicing the Chinese-speaking community, for example,” says Craig Buckstein, chief operating officer at Geneva.
Among other assignments, the 107-year-old family business sends 50 to 70 interpreters daily to the Administration for Children's Services in New York. They assist with family counseling and help caseworkers perform investigations when there are claims of abuse or neglect.
Marian Greenfield, owner of msgreenfield Translations and a former president of the American Translators Association, has seen 30% revenue growth on the part of European clients since 2009, as a weaker dollar has brought more foreign firms her way.
“In a rough market, you are looking to sell your services wherever you can,” says Ms. Greenfield. “Even though there was a recession in the U.S., many European companies were looking to pick up translation services here.”
For his part, Mr. Labati of G3 Translate expects revenue to increase another 20% this year. He took advantage of the drop in commercial real estate rates and signed a lease in a new location for an additional 2,000 square feet. And the hiring plans are back on the table.
