Welcome to the first article of 2025 in the Localization 101 series. As the new year begins, there is no better time to start planning your growth. In this piece, we'll discuss tips for allocating a localization budget and guide you through making the right financial decisions in your expansion journey.
Expanding to a new market (especially to a foreign one) is often as exciting as it is scary. But we’re here to help make this stage exciting. No matter the growth stage you're in, we have something for you. Read on to learn about proper budgeting, common concerns about localization spending, and more, including practical examples. 📝
⏳ Localization is an investment, not an expense 🔗
One of the most common misconceptions about localization is that it is an optional expense. But the truth is that localization is a long-term game, quite similar to starting a new business. At first, you’ll mainly notice the price tag needed for growth, but looking ahead, you see that, eventually, there will be profit. And just like getting a new business off the ground, localization is an investment you make to increase profit.
A good localization strategy sets you up for success in a foreign market. It lowers the risk of your expansion investment because it attracts more customers and keeps them for longer. It’s the shorter road to the hearts of your customers in the target local market. You’ll start with a stronger impact right from the start.
One of the most common misconceptions about localization is that it is an optional expense. But the truth is that localization is a long-term game that eventually generates profit. It's actually the shorter road to the hearts of your customers in your target market
Is localization for every company? 🔗
Localization has many benefits, but just as you wouldn’t change tires on a car that has perfectly functioning ones, not every company needs to spend money on localization. This applies if:
- 🚪 Your business isn’t entering a new market,
- 🎈 has no plans to expand into another country,
- 👥 or isn’t aiming to target new demographics within your current market.
However, when taking a business abroad and increasing sales and customer loyalty, localization always wins. It helps you connect with customers and makes you a trusted business among locals.
At this point, though, you might probably be asking yourself if localization is really worth the investment. Localization has to be worth it to you, and if you’re going global, it always is. However, the best answer to this question is another question: How do you measure its worthiness?
How to measure your localization ROI 🔗
It might be hard to believe, but localizing your marketing content, website, or app can cost less than skipping it. Failing to localize when it’s needed will affect your ROI negatively and often end up costing more in the long run. Most of the time, the localization road will make you more money over a long period. With advanced and useful localization tools in place, you don’t have to hire as many localization experts and translators, developers, and marketing experts. Which saves you money yet gets you good results.
However, measuring your localization ROI is more than setting aside a budget for an automation tool, localization software, or hiring experts. It requires you to look beyond these.
Measuring your localization ROI starts with these two steps:
- ⚔️ Compare your localization costs to the potential loss of customers from skipping it. For example, if localizing helps you gain 2,000 new customers in just five months by reaching your target audience in a new market, and each makes a purchase, the revenue will likely far exceed the cost.
- 🤑 See the revenue potential of a single, effective localization solution with key features + a small team of skilled specialists. Once you start analyzing the benefits of localization by using a tool that automates most of the process and even provides a small team of specialists to assist throughout it, the revenue potential becomes clear.
To simplify it, here is a simple formula to measure your localization ROI:
You want the sum from your calculation to be as high as possible. The higher the percentage you see, the better ROI you can expect. And if you’re unhappy with the number, you can use it as a base for your strategy to increase it. Preparation leads to positive results.
The positive impact of l10n on your TCO 🔗
One important factor is TCO or Total Cost of Ownership. Businesses overlook this when planning a localization budget. Reaching a global audience and keeping up with changes in consumer behavior often means making many small adjustments along the way. Imagine asking your developers to roll out an update every time you need to change the marketing messaging on your website or update the translations of some UX copy inside your product.
Well, this is the old way. The new way is to use effective tools like a Content Delivery Network (CDN) to automate translation delivery. This will empower your company's creatives to handle these changes independently and save developers precious time so they can focus on delivering valuable features. It will also push your localization strategy to positively impact your TCO.
📉 Reducing your TCO is a challenge, but we have some suggestions on how you can do this by using a reliable CDN. Read them here
🪜 Analyzing localization costs step by step 🔗
As you can see, there is a lot to consider and include in your budgeting, but remember that you can reduce the costs by simplifying the entire process.
Here are the main costs you'll face and tips on how to effectively stay within your budget:
Localization QA 🔗
Being one of the essential, if not the most essential, components of your localization strategy, the cost of quality assurance is a necessary one. QA includes many aspects: from prepping your software for i18n and having proper checks in place to making sure that people with reading difficulties can use your app. While it might sound like a lot, much of it can be automated and reviewed by a professional before launch.
Project management costs 🔗
Planning a venture in a new market means someone will need to be in charge of the new project. If not planned carefully, the pre-planning and execution can take too long, creating unnecessary costs. Make sure to use the right project management tools that everyone involved can access, which makes every step clear and more cost-effective.
Translation costs 🔗
Most managers either hire a translator or a localization expert to handle language work. Want to save money? Hire professionals who can do both. And if you also give them tools like Translation Memory, Glossaries, options for simple file uploads, and clear briefings, your linguists will be able to work faster and deliver higher-quality results.
🤔 Translators, proofreaders, validators... Understand what they offer each in our ultimate guide for translation ordering
Technical costs 🔗
Whether you’re a new company or a growing business, it’s essential to adjust and plan your tech stack budget wisely. Your tech stack forms the foundation for developing your app or service. To save money, start with the essentials and add more tools as needed rather than investing a large amount right away. If the platform you choose is scalable, this will be much easier.
The best part about patching up a great tech stack is that it can help you automate most of the translation process and have someone check it before you launch it to the public, so don't underestimate the power of automation tools when picking yours.
🕵️♀️ What influences localization costs? 🔗
As the next part of your budgeting plan, let’s zoom in on the main components that a successful localization project should include. How can you budget appropriately for each one while keeping costs down?
Content & market complexity 🔗
How big do you want to go, and how complex does your approach need to be for customers to trust and understand your brand? It depends. Are you targeting a small market in a medium-sized city where online shopping isn’t common? Or are you preparing to reach a large, national market?
Clearly, these two scenarios require different strategies and vary in time, complexity, and cost. Therefore, you must budget with these factors in mind.
Visual elements 🔗
When we spot something we like, we know it. And when we see something we love, we definitely know it. Visuals are crucial in content development and localization. A well-functioning UX and UI are important elements and come with costs to consider. Without them, you won’t make the impression you want on your customers.
Make it cost-effective by making sure that your software features allow for easy internationalization and are pre-set to be changed quickly if needed, with a quick check from the project manager.
Content volume 🔗
How much content do you need, and how quickly do you need it published? Is your audience large or small? Do they require extensive content or just brief, basic information? Will you be using blogs or not? As you plan your project, distribute your budget equally for technical software needs.
Language uniqueness 🔗
A localization project goes beyond a country and a culture. Each language has its own “style” beyond the spoken and written word. Within one country, there are also different dialects and language customs.
🇪🇸 E.g., a person in the north of Spain will use a more direct language than someone in the south of the country where the language is more relaxed and easy-going. Go to Madrid and you’ll probably talk more about education and career than you would in sunny Marbella. This is the way in every country and good localization, or even translation, adapts to that when targeting specific parts of the country.
Your tech stack 🔗
As mentioned, the tech stack is like a foundation for product development, but that’s not all it does. It determines the road ahead and what you’ll be able to do as your website expands and your application needs more features. The tech stack you choose will determine which solutions and features you can add later on — or which ones you won't.
Having one solution with multiple features and integrations that help you get there, along with a team at your disposal if you need one, is one of Localazy’s specialties. You’ll get globalization off the ground quicker, can put a plan in place faster, and can allocate your localization budget with greater clarity and accuracy.
👉 The Localization guide for managers is a good place to start
👟Tips for 4 budgeting scenarios 🔗
Now that we’ve covered some important financial factors, let’s get down to the nitty-gritty and see what your exact business needs are. We've picked four scenarios in which your company might fit.
1. Startup with a limited budget and no translators 🔗
If this is you, start with pre-translating your content with machine translations, preferably into a language someone from your team is familiar with, so you can proofread it internally later.
Take advantage of free localization features, get familiar with the process, and build your context bank along the way (define glossary terms, add translation notes, and upload screenshots). Watch out for things that the machine engine often mistranslates. You can also leverage the Localazy ShareTM to get community-proven translations for the most common strings in the software field.
Also, besides your product, consider localizing only the most important content at first, like marketing materials and content that customers see first for a good impression.
Choose a plan to help you get off the ground with a small budget. Then, you can hire external translators for the additional languages, invite your user base to help, or order translation services directly on the platform.
💪 If you're a startup, we also recommend joining our ambassador program for extra perks!
2. Small growing business with an international team 🔗
If you’re in the growing stage and are slowly starting to get global (perhaps with the help of some investors or VC funds), that is an exciting place to be! It’s also a crucial stage where you'll need to think about localization more seriously. Data shows that investing in localization helps you successfully grow your brand overseas. This is the phase where the window is wide open for your global customers to start talking about you and for new ones to find and remember you.
Start by choosing the market with the most potential and aligning your team with your new goal. Pick the one that excites you the most and has a good future outlook, and start localizing your brand image. If you're in this phase, don't forget to educate your team on the importance of localization with data, training, and advocacy actions (this will make things easier in the long run). And keep in mind that, as your team grows, features such as clear Language Permissions will become more important, so make sure to pick software that's scalable.
3. Medium-sized company with an in-house translation team 🔗
If your workload is already considerable and your business has a bright outlook in several countries, you’ll now need effective tools such as translation memories, automated workflows, and QA as part of your translation project. Training your translators on these tools is the best way to unload some of the workload and focus on providing accurate briefs while keeping the team in the loop about the expansion. Automation, education, and providing as much context as possible are key here.
4. Established company relying on outsourcing 🔗
Understandably, you’ve outsourced your work to a translation agency or a freelance translator in the past. This has probably helped you get to where you are, but you feel like there must be a more efficient way. Sending files back and forth and managing changes down the road is taking its toll.
What if there was a way to keep saving that time and be more in control of the entire localization and translation process while also saving you money?
Handling continuous localization without an in-house department or trusted partner who can cover all needs can be tricky. Luckily, there are solutions for this that integrate services into your translation management system, like our Continuous Localization Team. This also helps you keep costs in check, which is a win-win.
🔎 FAQs 🔗
How expensive is localization? 🔗
Localization costs depend on which stage you are in your expansion and how far you’re looking to expand. For smaller businesses and startups, it can start as low as $33 per month, such as with our Professional plan, combined with help from your community and machine translations.
This can be, however, highly variable depending on the approach you adopt: you can also add the cost of hiring a proofreader or translator for a few hundred dollars monthly, or you can pay thousands of dollars each month if you choose more manual work and bring in several people to help. The point is to keep a good balance between quality and cost.
How can I reduce localization costs? 🔗
Reduce your translation and localization costs by prioritizing what needs to be done now. This will benefit you now and in months and years to come. While some upfront investment may be necessary for long-term returns, you don’t always need to spend heavily from the start. You can also allocate a bigger budget as your revenue and needs grow.
💡Using features like Automated Workflows will help you keep your costs down
How can I translate my software for free? 🔗
There are tools out there that let you translate your app or software for free. For example, our Free Tier plan and ShareTM feature allow you to get started at no cost. While free options are great for starting out, if you want to localize properly, save time, and get top-quality translations, you’ll need more advanced paid tools. But if your budget is tight, free translation can still be a solid first step.
Do I need to hire a localization team? 🔗
Not necessarily. What you really need in localization is someone who knows your target market and language. If you’re working on a big project, it’s a good idea to bring in someone who can handle multiple tasks and has a mix of skills or get help from external providers for certain jobs. The fewer people you bring in first, the more resources you will have left to invest in other directions. And if you add automation to the mix, scaling your content becomes much more manageable.
✔️ Conclusion 🔗
Creating a localization budget can be overwhelming. Business owners and managers feel they need to expand while keeping costs down, and find it hard to juggle all the tools in the market.
The good news is that you don’t need to hire a big team or spend a fortune to get started with localization. You can expand, build trust with new customers, and increase profits by:
- 🔄 Automating processes
- 🪑 Choosing a platform with unlimited seats
- 📩 Inviting your team and preferred freelancers to help
- 🦾 Getting help from MT, AI, and community translations
- 📝 Ordering translation and proofreading services when needed
The strength of Localazy is our tools will step in exactly where you need them, keeping you in more control of your projects and letting you add more features as you grow. Let our TMS be your right hand, integrations be your minions and features like Language CDN and CLI be the essentials in your toolbox.
And if you want to go at it alone for now, reach out anyway and ask us for help to get you started, or read our guides and localization blog posts where you’ll find lots of useful information.
So, are you ready to kick off this first quarter and a year of cost-effective expansion? We’re cheering you on, whether from the sidelines or right there with you in the ring.
