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How to Price your Home Based Transcription Business

Description:

This article examines the effects of foreign outsourcing on a fee pricing structure. It also addresses key decision making factors when pricing transcription work. The article provides a real life working sample and also makes pricing suggestions.

Content:

Perhaps one of the most challenging facets in the area of home based transcription is pricing. When you are starting there really is no standard table or chart. The nature of a home based business pits you against cheap outsourced labor in India, entrepreneurs in their undies typing away at a home computer, and professionals in bricks and mortar offices in the States just to name a few.

Tough questions need to be examined in order to set up a fee structure and set pricing to be competitive. What are your strengths and weaknesses? What are your competition’s strengths and weaknesses? What does your competition charge? Where are you at in your transcription career? How many work hours does it take you to transcribe an hour of audio?

Before you consider making a bid or accepting an offer on a transcription job, sit down and transcribe a single hour of audio. Time yourself. You do not have to work continuously – that’s one of the pluses of doing it yourself. If you need to take Rufus out for a walk or take the kids to the soccer game, deduct that time accordingly. Once you’ve calculated the number of hours it takes to complete an hour of transcription, you are ready to create a fee structure.

On a side note, most transcriptionists use the estimate of three hours of work for a single hour of audio. It’s not set in stone, but it is an excellent guide. You would be surprised at the number of people who start out ‘cold’ in the bidding selection process. They figure if they type 100-120 words per minute and an hour of audio represents roughly 8,000-10,000 words, then they are looking at around an 1½ hours to complete the project. So, they make an outlandish offer of something like $60 for a six audio hour project rationalizing their decision that ‘it’s a starting point’. When reality sets in, deadlines are missed, and money, time & work are forfeited. The buyer then pays a premium to a real transcriptionist to “rescue” the project, and quite often the disillusioned transcriptionist quits the field before they actually even had a chance to start. All this is sidestepped with a transcription test run. If you are new, do it!

Next, if you are just starting off, it is perfectly acceptable to undercut the competition and the average going rate. In fact I did exactly this when I first started my transcription business, www.infoaces.com. You have to make it appealing and worthwhile for a buyer to consider your services. You need the first few jobs to get yourself established, develop a reputation, and garner some feedback and testimonials. However, no matter how much you want the job, make sure that it’s at least marginally worthwhile for you to do. You don’t want to be working for $1.00 an hour or sometimes less because you underestimated the demands of the job!

Competition is a major factor. Know your competition. Outsourcing in India is booming. Indians will work for pennies on the dollar, and they work hard, fast, and professionally. It’s a great deal for them and for their employer. So, what can you do to compete against foreign outsourcing?

While you must recognize them as an admirable form of competition, when you break it down to the foundation, foreign outsourcing has a difficult time in the field of transcription. The nature of the English language, the nuances, the slang, the inflections and dialects are often lost upon their study of ‘Queen’s English’. Basically, if your English grammar and vocabulary skills are strong, as a native transcriptionist you have a monumental head start over foreign competition. Since you are able to establish a strong product differentiation, specifically superior quality, you will be able to command a higher fee. Your employers only need to get stung once to learn the time immemorial lesson, “You get what you pay for.” Craft your skills. Pay attention to the details. Do an actual reading proof and not just a spell check. Things like this enable you to firmly establish your pricing structure.

The going rate for a single speaker hour of audio ranges from $20 - $60. You will find employers accepting proposals at all levels along that range. When I first started I priced my work at $25/audio hour. It took me almost six hours to transcribe one hour of audio. That’s below minimum wage, but I was happy to do it. I did it at my own leisure, and it helped to form the foundation of my feedback to allow me to grow. After I began to get comfortable and more proficient, my transcription time dramatically began to drop, and I started getting too much work. This is where Econ 101 kicks in with the supply/demand curves. Raise your price. Grandfather your existing customers and slowly expose them to slight increases over time.

The last major factor to consider when pricing is the volume of work. When you get massive projects requiring the transcription of 40, 60, or 80 hours of audio, it is almost understood there will be some type of incentive discount for the employer. For example, my current established rate is $50/audio hour. All of my longtime repeat customers are grandfathered in at $45. When I bid on large projects, depending on my current workload, I will bid anywhere from $45 to $50 per audio hour. This seems to work well in spite of the foreign outsourced bids of $15 to $20.

In closing, work hard to distinguish yourself from your competition. Rock bottom outsourced rates should be examined within the scope of the big picture. Be aware of the rates, but recognize that all things are not equal and if you differentiate yourself enough, the competition from foreign outsourcing can be minimal. Price yourself & your business accordingly–even if you are transcribing away in your pajamas! Please feel free to email me any questions, comments, tips, suggestions or anything. I love success stories. Leona. www.infoaces.com

Author: Leona Velez

About Author:

Leona started her home based transcription business, www.infoaces.com, in August 2006. She served in the US Air Force and was awarded a commendation medal for her time during Desert Storm. She has two teenage kids and lives in sunny Arizona.

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