How do I learn whether a translation agency’s work is mostly one big client’s?
Ask for revenue by client for each of the last few years and see how much a single account contributes. Then look at how that client buys: through a contract, a standing arrangement or one person’s habit. Speak to the client if the seller agrees.
Request a client-by-client sales report, not just totals, and check that it adds up to the financial statements. Look at the share held by the largest account, then at whether that share is growing or shrinking. Ask how long the client has been with the agency, what languages and document types it sends, and whether the work is steady or arrives in bursts tied to one project. Next, understand the relationship. A written contract with a clear term is different from a project manager who sends files because she likes the translator. Find out who at the agency owns the relationship and whether that person plans to stay. Ask whether the client has other vendors and how it chooses between them. If the seller allows a conversation with the client, ask what would make it move work elsewhere.
Also test the rest of the book: how many other clients ordered more than once, and how quickly the agency could replace the big client’s volume if it left. Ask also whether invoices to the largest client are paid on time, since a slow payer can strain cash even when the work is steady.
Key takeaways
- Get revenue by client over several years and check it against the financial statements.
- Find out who owns the relationship and whether a written contract backs it.
- Ask the client, with the seller’s consent, what would make it send work elsewhere.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 03Canadian Federation of Independent BusinessResearch dataSuccession Tsunami: Preparing for a decade of small business transitions
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