Picture the scene. It’s Monday morning and
you arrive for your dental appointment.
The dental nurse gets you settled into
the chair and explains that your normal
dentist is off sick today so you’ll be seen
by their colleague. The new dentist walks
in and introduces herself. You cover some
pleasantries and ask, since you don’t
recognise her, if she’s new to the practice.
“Oh no, I’ve been here for years” she
replies chirpily.
“Sorry I assumed you were new” you say. “I
haven’t seen your picture on the staff board.”
“I’m more of what you’d call a back-office
bod really. I’m the accountant. We’ve got a
dentist off today and I thought, well, how hard
can this be? Can’t keep the patients waiting.
Now…” as she reclines your chair and the drill
whirs into life, “Open up and let’s have a crack
at this dentistry lark!”
Of course, this would never happen – or
would it? The reality is that all of us have
a go at things that we’re not trained to do.
I’d happily re-wire a socket or service my
ancient oil-fired AGA, but I wouldn’t replace
my car’s clutch or the circuit breakers on
my mains electricity. But why not? – after
all I’d save some money in doing it. The
reason is simple – there’s a far greater
chance of things going wrong if I do and the
consequences could be dire.
What is outsourcing?
All of us recognise the value of getting
somebody else in to do the things that
we don’t have the skills, or the time,
to do ourselves. As qualified aesthetic
practitioners you have years of training
in arguably the most important career
and life skill there is – maintaining human
health. You can perform CPR, map out
facial vasculature, know where to place
the right amount of toxin or filler for the
correct aesthetic outcome and make
the lives of many people better in doing
so. But your specialist training didn’t
include employment law, recruitment, IT,
accountancy, digital marketing, how to
put together a business plan or negotiate
a contract, how to read a profit and loss
account, the importance of free cash flow
or the impact that culture has on business
performance and staff retention. Nobody
could master all of these skills to the
extent that they were able to perform all
of them optimally – that’s why 70% of all
UK companies contract out some of their
business tasks to third parties.1
Typically, outsourcing is used as a strategy
to save costs or improve efficiency. IT is
the number one outsourced function by
British companies because it requires
specialist skills, but the need for these can
ebb and flow and so to have those services
on tap, paid for on an as-you-use-it basis
makes perfect sense.1
Business guru Peter Drucker said, ‘Do what
you do best and outsource the rest.’ Doesn’t
it make sense for the medical aesthetics
sector to do the same? Therefore, it makes
sense to focus on what you can do best,
the medicine bit, and ask others who are
specialists on their areas, to help you. There
are many around – just take a look at some
of the names in the pages of this journal or
go to any of the major trade events such as
the Aesthetics Conference and Exhibition
in March (see Table 1 for the list of possible
companies to see at ACE this year) and CCR
in October, and you will find people who
are perfectly suited to helping you and who
understand this industry. The purpose of this
article is not to highlight any individual area
but simply to give you some insight into the
perspectives of those who offer the services.
Everyone loves choice
Choice is good. Sometimes it can be
agonising and take time, (and you have
precious little of that), but consumer choice
improves competition which drives quality
up and keeps prices affordable.
To help you to choose your best business
partners, (and it will almost certainly be
several rather than just one or two), the
checklist below can help:
- Experience: can they do the job you want
them to do and how long have they been
doing it?
• Reputation: do they have
recommendations or ratings from people
you respect?
- Sector knowledge: do they have
experience in the aesthetics industry?
Does this matter? Not so much in IT
or payroll, but it’s important in digital
marketing or business planning
- Compliance: do they have the relevant
professional qualifications, registrations
and insurance?
- Availability: can they do the work you
need in your timescale?
- Conflict of interest: are they working for a
competitor of yours and would this affect
your decision, (maybe your competitor has
made it conditional not to work with anyone
in their area for a certain time period)?
- Price: are they good value for money?
Service or servility?
Just like you, the outsourced professionals
are proud of what they do and work hard
on their reputation. If you approach them as
a partner or peer you will always get more
bang for your buck. Nobody likes to feel just
like the hired help! One of the key things
to do is to take the time to brief them on
your business, your brand and your values.
Because you’re hiring an expert it’s often
easy to assume they know everything – but
they don’t! The more time you invest in the
early stages of a working relationship, the
better and more fruitful it will be for you.
It’s no different than onboarding a new
member of staff. What’s more, by making this
investment you will engender more loyalty
from your service partner. An old boss of
mine taught me that the goal was to achieve
such a strong relationship that if you needed
them at 5pm on a Friday and called them,
they would pick-up!
Cost vs price vs value
These terms often get confused, but they
have important and subtle differences that
will help you understand the perspectives of
outsource partners.
Cost
It sounds obvious but this is what something
costs the person who is providing it to you.
In the instance of a product that is simple to
appreciate. If you are buying a product that
costs £5 to make and ship to the retailer,
when you buy it for £10 the retailer makes
50% profit. We understand that tangible
products have an acquisition cost to the
retailer, and we are typically accepting of the
price. When it comes to services however,
(and that is what you are predominantly
buying when you outsource), the actual cost
of the service is less tangible or transparent,
and this can make us more inclined to try
to negotiate the price down. But the cost
of a service is every bit as real as that of a
product.
Consider your own clinic where you
offer both service and product. You charge
for the product element (toxin or filler etc) that
includes a profit margin, and you add that to
the charge for your time. You may think that
there is no actual cost for that time but if you
operate from a clinic your business will have
overheads (utilities, insurance, staff costs,
business rates etc) that must be covered to
simply stand still. To grow you will also need
to recover a profit. You are also covering
the time that you have invested historically
in training and education to get your skill
level to a place where you can offer great
aesthetic outcomes. When you are learning
you are not earning and so your service
charge covers historical costs, possibly from
years ago. This is exactly the same for an
outsourced specialist.
Price
This is typically a monetary measure that
covers costs and profit. Price and cost are
both quantitative measures and the former
typically includes the latter. So, when a client
asks, ‘how much does it cost?’ what they are
really asking is ‘how much will it cost me?’
The difference is subtle and we have blurred
the lines by how we use the word cost – we
should really be using price.
Value
This is the most conceptual and intangible
measure of worth. It is also constantly in flux
and subject to many influences. If a product
or service fulfils an unmet need it has a
high value. Supply and demand also have
a significant effect. At the beginning of the
pandemic the shortage of PPE made it
enormously valuable and increased demand
saw prices soar. As product became more
widely available the price dropped to
reflect the reduction in value. The same
is true of services. If somebody offers a
unique service that truly fulfils a need then
people will pay a higher price because the
perceived value is higher.
This comes to the heart of the matter in how
much you pay for specialist services – and
also how much you may want to negotiate.
When you are outsourcing to external
partners just remember – like you they want
to provide a great service and they work hard
on their reputation. That reputation comes
at a cost to them but the medical aesthetics
sector can benefit hugely from their specialist
advice. When you look for an outsourced
partner perhaps do so through a lens which
considers value rather than just price.
Don’t do it alone
Remember Peter Drucker’s wise words and
focus on the things that only you can do well.
Get people who are as good as you in their
specialist fields to do the rest. That way ALL
elements of your business offering will be the
very best. And if, at any moment, you consider
doing some of your non-core services
yourself, take some time to think. Would I want
an accountant to do my root canal?
