Ask HN: I cannot afford to scale…

Almost a year ago I decided to quit my job and start 2011 doing something I've always wanted to do: start my own company. I started with two primary aims: 1) to provide the best, most accessible app translation service and 2) learn as much as I can about running a business as possible. I decided from the very start it was ok if there were a few mistakes along the way, just learn from them for the future.

Now I'm at a point where my knowledge escapes me and I'm looking for some advice as I'm beginning to turn away customers.

My revenue is client based. A small iOS or Mac OS app can take me around 4-5 hours of my time in a week. A medium sized app 8-10 hours. A big app or a technical app takes me much much longer. And that's only if things go well. You all know client work involves last minute changes and lengthy email discussions.

As you can see with those times, there's only so much I can do.

I don't charge enough. Revenue minus costs is healthy, until you factor in my own time. When we're talking pennies per word ($0.14 USD per word) you can see how a small project (250 words) costs me money and a big project (4000 words) costs me a lot of time (which means I have to refuse other projects). I can't increase costs because of competition, even though I am sure my service provides a much higher quality translation.

I can't afford to take a second person on. We will be able to take on more work, sure, but I can't guarantee someone a full-time position. Maybe I could use a vWorker, but I want a relationship with my colleagues. I need to know we're on the same page.

So as you can see, I need a bit of advice. I love my clients and the rapport I have with them. But I need to expand and move this away from a life-style business into something a bit more automated (while maintaining quality).

For example, the software I sell is more expensive than all of the competing products. However, I know that as we have similar fixed costs, I only need to sell around 1/3 the volume that they do in order to make a similar profit. People don't always go for the cheapest option- indeed most people avoid it.

Until you've tried raising your price you really don't know what you can get away with (and I think you may be surprised, especially if you're getting people coming to you via personal recommmendations). Companies like Apple have made enormous amounts of money selling products which are more expensive than the competition.

This doesn't address your scaling concern though. Are there parts of the process that are automatable? For example- could clients preprepare their app in a certain way that makes it easy to extract and translate all the data.

The downside is trying to find good contractors who can translate to a standard that you set.

Good luck!

1. Like other people have said, increase your price and fewer people remain. It is polite self selection

2. Outsource the actual job. make your job relating with the customer and pay people to do the translation (per job). your work will be to review what they have done and interact with the customer.

3. Focus on the one that had higher money/time ratio. So if it is the highly technical jobs or the phone apps, you chose.

Congratulations, you have a good problem :).

PS: NEVER reduce your quality.