Industry information for those interested in offering general, legal or medical transcription services from home.

Transcription is the act of listening to the spoken word and typing what is heard directly into a word processing document for later use. While the process of producing a transcript sounds simple, there are skills and equipment required before starting a home-based transcription business.

Types of Transcription and Skills Required

General transcription entails transcribing focus groups, financial earnings calls, telephone conferences, educational seminars, speeches, religious sermons, insurance, and meeting minutes. The skills needed to produce general transcripts are the ability to type, excellent spelling and grammar skills, and familiarity with word processing software.

Legal transcription is a specialized type of transcription which involves transcribing depositions, court hearings, law enforcement investigations and interrogations. In addition to good typing, spelling, and grammar skills, a legal transcriptionist is also familiar with legal terminology and the formatting of various legal documents.

Medical transcription entails transcribing doctor office notes, emergency room reports, X-ray reports, operative reports, psychiatric evaluations, clinic notes, pathology reports, and lab reports. Medical transcription is a highly-specialized field and does require advanced training.

The most important quality for a general, legal or medical transcriptionist to have is above-average listening skills and the ability to listen and type simultaneously.

Terms of the Trade

There are a few terms that one should familiarize themselves with when working in the transcription industry:

Client: A client is a company that contracts directly with a transcriptionist to complete transcription projects.

Contractor: A contractor is either a company or a sole transcriptionist that deals with clients directly. A contractor is responsible for all aspects of producing transcripts from obtaining and completing projects to proofreading, submitting invoices and collecting payment.

Subcontractor: A subcontractor is a transcriptionist that receives transcription work from a contractor and does not deal directly with clients.

Equipment and Software Required

The equipment needed to start a transcription business is a computer with speakers, a printer, good-quality headphones, Internet access for downloading and uploading audio files, and a foot pedal to control audio playback. Software needed is a word processing program, usually Corel WordPerfect or Microsoft Office, and a program to playback audio files.

There are free audio software programs online, and also pedal manufacturers often offer audio playback software with their pedal. While a digital transcription is the most popular method of sending and receiving audio files, there are certain instances in which standard or micro cassettes are used. So it's a good idea to have a transcribing machine available.

Business Structure

Subcontracting Versus Contracting

Both subcontractors and contractors typically set up their transcription business as a sole proprietorship, operating under their own name or a business name.

Many transcriptionists start out as a subcontractor to gain knowledge and experience before striking out on their own as a contractor. Subcontractors are responsible for their own taxes and normally receive a Form 1099 from contractors in order to complete their tax returns, and are entitled to deduct certain business expenses.

Contractors are responsible for marketing, obtaining clients, and completing projects from start to finish, including proofreading, billing, and payment collection. Contractors do not usually receive 1099s from their clients but are still responsible for paying their own taxes, and are also entitled to deduct certain business expenses. While being a contractor carries more responsibility than that of a subcontractor, the benefit is there is no "middle man" and higher rates can be charged.

It's a good idea to check with local tax and revenue departments to determine the local rules for starting a small business, how a business should be structured, and applicable tax information. The IRS also provides free resources for those seeking to start a home-based business.