The prevailing economic environment is without a doubt challenging but businesses, their proprietors and managers should not feel helpless. There are positive actions that can be taken to ride out the worst dips, or even gain competitive advantage for when the situation improves.

But, first, some hard facts.

Unless you have been stranded on a remote island for the past year, you will be aware the UK is currently experiencing the longest recession since the Second World War. The economy in the USA has also taken a massive hit, adding to the financial gloom across the English-speaking world. Despite Gordon Brown’s assurances that the UK was better placed than most to ride out the recession, recent economic statistics have painted a rather different picture. While Japan, France and Germany have already enjoyed six months of recovery, the latest figures confirm that the British economy has suffered six straight quarters of declining output. The UK is now expected to be the last major economy to claw its way out of recession.

Such patterns have had an impact on the currency markets. Sterling has continued to fall against the euro and the Japanese yen. This is a pattern that is not expected to change rapidly. Bank of England predictions suggest inflation will undershoot the 2% target for CPI. As a result, interest rates are expected to remain low through to 2011. Analysts at Société Générale recently conjured images of the distant past when they put out a note asking “Is the UK the sick man of Europe?” Such an economic climate has placed immense pressure on SMEs, with UK businesses continuing to face uncertainty.

Reasons for Optimism

If anything is clear, it is that the global recession is not playing out evenly. However, although Britain seems to be faring worse in this turn of events, it is not all doom and gloom. Economic recovery in Europe may offer some cause for optimism here in Britain. We live in an increasingly globalized world – economies across the globe rely upon one another. Nowhere is this more apparent than in the fact that the trigger of this recession has been attributed to the problems in the US sub-prime mortgage market of 2007. Business Secretary Lord Mandelson recently pointed out that an estimated 55% of UK trade is with Europe; economic recovery in Europe is therefore good news for UK business.

In addition, the weak pound may actually aid recovery. Although painful during the summer holidays, the state of the sterling currently makes UK products and services more attractive to global consumers. Already we have seen evidence of increasing demand for British goods in foreign markets. Monopolising on these trends could potentially help to speed economic recovery in the UK.

Translation as a Business Survival Strategy

So how might SMEs take advantage of European recovery? One such way of harnessing the benefits proffered by an improving European market is through translation services. Translating brochures into French or German can open up new markets for businesses and offer the opportunity to tap into international markets that have not been so badly hit. Similarly the translation of websites can attract the attention of new potential customers abroad, many of which will be looking to take advantage of the weak pound. Monopolizing on the strength of foreign markets in this way can essentially offer a method for “recession proofing” your business.

FIGS: A popular and sensible choice

The huge choice of possible translation services may at first be slightly overwhelming to SMEs hoping to expand into foreign markets. A popular starting point for European translation is described by the acronym FIGS – French, Italian, German, Spanish.

Germany alone has been named the 5th largest economy in the world. In 2008 it had an estimated GDP of US$ 2.8 trillion – more than a quarter greater than that of the UK. Likewise France, Italy and Spain have been ranked 8th, 10th and 12th largest world economies respectively.

Once one considers some of the other countries where FIGS are primary native languages the figures become even more staggering – Austria, Argentina, Switzerland, Mexico, Canada (in Quebec), Venezuela to name but a few. In addition, there are large numbers of people who speak one of the FIGS languages as a foreign or second language. Practical reasons also make FIGS translation a sensible choice. The FIGS languages use the Roman alphabet and hence are relatively straightforward to use in a range of typefaces and on the web. In summary, FIGS translation offers a simple and straightforward way of breaking into a diverse range of foreign markets.

Why use a professional?

Inevitably there will be certain costs involved in the translation of brochures, websites and other related documents although these are often less than one might think. Even so, some might be tempted to cut corners and bypass professionals in translation attempts, this would be an unwise move.

Many amusing stories abound on the internet of the pitfalls of less than professional translation. Some are no doubt apocryphal but many contain a grain of truth; and they all serve to warn how small or colloquial errors in language can radically alter meaning. An advertising campaign by Scandinavian vacuum makers Electrolux, headlined “Nothing Sucks Like an Electrolux”, was perhaps unsurprisingly soon withdrawn in the USA (although there’s a counter-claim this was a deliberate joke by an UK agency). It’s reported that Parker Pen once marketed a ballpoint pen in Mexico with the supposed slogan “It won’t leak in your pocket and embarrass you”, but the amateur translator involved mistakenly thought the Spanish word “embarazar” meant embarrass. The ads actually said “It won’t leak in your pocket and make you pregnant.”

Early attempts by shopkeepers to advertise “Coca Cola” in Chinese were printed as ‘Ke-kou-ke-la’, based on the fact that it sounded similar to the original (a method termed transliteration). Unfortunately it later transpired that ‘Ke-kou-ke-la’ actually meant ‘female horse stuffed with wax’ or ‘bite the wax tadpole’, depending on the dialect. To save embarrassment, this mistake was rectified by the company, and a new translation (‘Ko-kou-ko-le’ – more appropriately meaning ‘happiness in the mouth’) imposed.

Such well-meaning but unhelpful attempts at translation are not purely amusing stories from the past. A multilingual emergency sign still in use on some Italian trains reads “In the event of declenchement of audible alarm evacuee the compartment without precipitation and come into contact with the crew”. While in March 2009 Hillary Clinton put her diplomatic foot in it by presenting her Russian counterpart with a mislabeled symbolic “reset” button in front of the world’s press (the full story behind this can be found on WorldAccent Translation’s “Making Sense” blog).

Translation is a subtle process, far more complex than literally translating word for word into the desired language. The aim is usually to convey the meaning behind the words. Sometimes certain things will inevitably be ‘lost in translation’; professional translators can ensure this loss is kept to a minimum. It is their job to keep up to date with jargon, terminology and colloquialisms across a variety of subjects. Using a professional will enable SMEs to avoid the potentially embarrassing situations that can ruin the reputation of a small business in a new market. Breaking into a new market can be challenging – don’t let failure to do so be down to poor translation.

Translation: A Sound Investment

In summary, translation offers a way of maintaining healthy company finances in the current economic climate. Some might argue it seems paradoxical to be spending more in the recession. Business strategist Richard Denny would argue otherwise: “When the going gets tough, business owners should step up their sales and marketing activity rather than cut back”. For a small increase in outlay, businesses can tap into a huge number of international markets. Business in the US can actually benefit from the weaker dollar, while the continued weakness of the pound against the euro and the yen represents a massive opportunity for British SMEs. The effective use of translation services can mean such an opportunity is not wasted.

The top line – like the Socratic life – demands examination. Total revenues tell a story of growth, sometimes happy, sometimes less so, but they do not tell the story of how a company grows. That knowledge abides in the distinctive wellsprings from which revenues emerge. We have developed a tool – the sources of revenue statement (SRS) – that reveals those origins and helps companies make the kinds of smart, targeted decisions that transform business performance.

Many companies treat cost cutting as a core competency: Ask senior managers to pare costs by 10%, and they know just what to do. Ask them to boost growth by 10%, however, and they’re stymied. That’s because management tends to draw a Serenity Prayer-like distinction between things it can and cannot change. Cots fall into the former category. Growth is in the latter.

But that presumption turns out to be misguided, as the SRS amply demonstrates. The tool emerged from our research into publicly traded companies that achieved steady double-digit growth in revenues and gross profits from 1997 to 2002. Looking for the strategies and management disciplines behind those results, we interviewed senior management, reviewed the financial filings of the companies, and discussed their performance with Wall Street analysts.

Managers can influence growth, we discovered, if they possess the right diagnostic information about revenue sources. Unfortunately, that information is often unavailable to management teams, who are blinkered by the narrow perspective of traditional financial reports. Income statements generally sort revenues by geographic market, business unit, or product line, which is useful – as far as it goes. But managers not only must know where sales encourage or disappoint, they also must understand why and what to do about it.

For many companies, the top line is terra incognita. So like Livingstone seeking the headwaters of the Nile, we set out to discover the revenue sources to which all business growth can be traced. Unlike Livingstone, we found what we were looking for.

We’ve identified five distinct sources of growth, all centered on customers and sorted not according to the way a company is organized but, rather, by the range of strategies open to it. Three sources stem from a company’s core business: continuing sales to established customers (base retention), sales won from the competition (share gain), and new sales in an expanding market (market positioning). The other two lie outside the core: moves into adjacent markets where core capabilities can be leveraged and entirely new lines of business unrelated to the core. The exhibit “Building Growth from Five Revenue Sources” traces one company’s 20% revenue rise back to these origins.

The SRSW, then, is an income statement that breaks out revenue by provenance. By tracking the amount of revenue coming from each source, the SRS helps managers take control of their revenue streams, diagnose problems, and spot opportunities for growth. Yes, it is helpful to know that sales in Germany are falling short, but it is illuminating to identify a problem in base retention.