Business consultant Stuart Rose shares advice on the importance of outsourcing non-core skills to specialists
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.
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.
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:
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!
These terms often get confused, but they have important and subtle differences that will help you understand the perspectives of outsource partners.
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.
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.
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.
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?
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