Financial planning can be difficult at the best of times. During the global Covid-19 pandemic and the recession that will almost certainly follow, creating and implementing financial strategies can seem almost impossible. However, digitizing your business and pursuing international expansion through a process known as localization can not only ensure financial stability during a global recession, but put some businesses in a position of enjoying financial growth.
This article includes excerpts from an interview with Ofer Tirosh, an entrepreneur and CEO of Tomedes on the social and economic impact of COVID-19 and the continuing global recession brought about by the pandemic. We also asked why online businesses are in a better position to capitalize on recessionary times than offline businesses through the implementation of localization strategies.
Why is the coronavirus recession different and how does this impact financial planning?
It seems almost certain that we will enter into a global recession as a direct result of the Covid-19 pandemic. Unfortunately, there seems to be some confusion about what a recession is. Many headlines talk about a “global recession” lasting for weeks. But by definition, a recession is a period of negative economic growth for at least two quarters or lasting for two three-month periods. While the National Bureau of Economic Research has changed that definition somewhat, it still defines a recession as lasting for “many months,” even if not for two successive quarters.
What makes the impending recession so challenging is that this is the first time a recession has started from within the service industries. Larger corporations have the financial planning and economic means in place to survive the adverse economic impact of an extended recession, but the people and smaller businesses on the frontlines of those industries do not.
With this service-based recession, it is the smaller, locally owned stores, restaurants and other retail outlets that will suffer the most. According to the World Fact Book, the services industry makes up approximately 63% of the global economy. The loss of this sector due to the Covid-19 pandemic has the potential to create a global economic crisis such as has never been seen before.
Do businesses and remote service providers have a financial advantage working online during a recession?
Some people within the services industry are in a better position than others. Delivery drivers, for example, are seeing an increase in demand, especially as restaurants close to sit-in customers. Waiters and waitresses, meanwhile, are relegated to unemployment and seeking alternative roles.
In the languages industry, there has been a profound difference in how the global coronavirus outbreak has affected individual companies. A translation company that provides live interpretation services may well be suffering due to social distancing, isolation and quarantines combining to disrupt its service provision.
A certified translation agency working online to provide live video interpretation services, online document translation and even localization services, meanwhile, is likely to have seen a continual increase in business. This same trend of online businesses doing better than offline ones extends into other markets as well.
If someone were to learn how to make a business online now, it would certainly increase their chances of getting through the recession in better financial shape. However, online businesses that have already established their global presence will likely be in a better position financially, especially if they have implemented localization strategies.
According to Statista, online sales in Italy, perhaps hardest hit by the global economic crisis resulting from the Coronavirus pandemic saw an average of ninety percent increases in online sales between February and March of 2020, with one day peaking to a one hundred and thirteen percent increase in online sales.
Why are localization services important during this recession?
What are translation services? Translation service providers do not just exchange one word for its counterpart in another language, like changing parts on a machine. Translation, at its heart, is all about the exchange of context and underlying meaning, in conjunction with the proper lexical meaning.
What are localization services? They are more involved than translation alone, as localization requires an intimate understanding of the mother language and its localized linguistic variations. Consider the example of translating English to English. Think about this; the same language that works in a marketing campaign in New York City will be different to the language that is effective in the UK, which is again different to the language requirements for marketing products or services in Australia. All three locations speak English as their primary language, but the marketing campaign must be localized for maximum effect.
Whether there is a need to translate something from Portuguese to English, from English to Spanish, or for any other language pairing, localization services allow the business owner to speak to local people at a local level. This creates a better emotional response from the audience, making it more likely that the audience will react favorably.
This principle is just as true when generating leads as it is in convincing the target audience to click an advertisement and go to a website. Localization involves much more than translation. Localization involves a comprehensive understanding of more localized cultural matters from pride to social taboos, integrating these into the translation process and establishing a more solid, emotional connection with the target market.
By providing people with a sense of familiarity, localization helps them to relax and encourages them to respond more favorably to the marketing materials in question. Localization is all about creating a personal relationship with the consumer. As long as the products or services provide a reliable solution, localization services can help to ensure a successful marketing campaign, online or off.
Ultimately, a larger target market with a greater return through localization strategies, adds up to higher profits.
What do you hope people will take away from this interview?
I hope that, despite how tragic the coronavirus pandemic and impending recession are, they can also provide opportunities for those who may be suffering financially. Life is challenging; it first tests you, then teaches you the lesson.
There is no school of financial planning that can prepare for every economic crisis, but it’s nonetheless possible to maintain financial solvency and even expand your business during a recession. Professional translation and localization services are the key to ensuring financial success no matter what the current economic outlook may be.
With the ongoing Covid-19 pandemic and the unfolding recession, these are troubling financial times. However, there are also many financial opportunities, even in the current crisis, when you know where to look!