Company Directors: Either Pay for an Expert or Pay More in the Long Run
If you’re the director of an Australian company (no matter how large or how small), then it’s tempting to do everything yourself internally. You have employees to do the job, so there’s no point paying an expensive third-party professional to do it for you.
Whether it’s management consulting, accounting, legal, compliance or marketing, there are many reasons why company directors across Australia don’t hire experts to do a particular job their business requires.
But, at the end of the day, the alternative to expert work is mediocre work – and you’ll be sure to pay more for it in the long run.
Why directors are hesitant to engage an expert
Here are five reasons why company directors here in Australia are reluctant to pay to outsource their work to a third-party professional.
- You have employees to do the same job
You have an in-house bookkeeper, marketer, accountant and IT professional. You’ve hired them to do a specific job. You’ve read their CVs. They’re professionals in their own right.
Your marketer spent 10 years’ in the game. Your bookkeeper spent the past 30 years mastering everything there is to know about balancing the accounts.
Why pay an external expert when you’ve hired your very own?
- Experts charge too much
Hiring a professional expert outside of your company costs an arm and a leg. They charge way too much and the value you receive doesn’t match their prices even remotely.
The last time you received a bill from a third party, you nearly fell off your chair. Your cash flow took a steep hit, and that’s something you really didn’t need especially when trying to recover from a global pandemic.
- Experts are too busy
Experts don’t only work for you. They have hundreds of other clients. They take on too much work because they’re afraid of losing business.
The result is they become swamped, they take ages to deliver results and you keep on having to chase them up.
Why are you paying all that money to someone who priorities other clients over you?
- Experts don’t have your internal company knowledge to do the job properly
If an expert is going to provide value to your business, they have to know your business. Outsourcing critical work to a stranger who doesn’t know anything about your company (even though they say they do) is a big gamble.
They’ll operate on flawed assumptions, fail to ask questions where it matters and not take proper instructions. And you just don’t have the time to explain everything to them.
Here’s why not hiring an expert will cost you more
Everything we’ve outlined above are valid objections to hiring an expert – no matter what profession we’re talking about.
But it still rings true that failing to hiring an expert when you need one will do much more damage than you think. Here’s why.
- You’ll pay more money long-term
When you outsource work to experts, they already know everything about the specific task that has to be done. They’ve done it thousands of times before. They’re quite literally masters at it. They might not know everything about your business – but they won’t need to if you take the time to instruct them on what is relevant to the job at hand.
Experts save you money. You won’t have to pay for their training (in 2020-21, companies in America spent over $92 billion on training). You don’t have to pay them a salary or superannuation. You don’t have to pay them when they want to take leave. You don’t have to pay payroll taxes. You don’t need to pay for their equipment or office supplies. And better yet, you’re more likely than not can claim their costs as a tax deduction at the end of the financial year.
- Your employees can’t focus
When you outsource critical business processes – whether it’s bookkeeping, accounting, regulatory compliance or marketing – you and your employees can actually focus on your core business.
You don’t have to worry about your cash flow when your expert can tell you. You don’t have to worry about generating leads in the digital sphere because a marketer will do it for you. You don’t have to worry about complying with corporate regulations or doing your taxes because a third-party expert is already onto it.
- You won’t get the best talent
Hiring an employed team member, no matter their prior experience, will almost always require expensive training. You have to teach them how you work, and there are the so-called ‘sunk costs’ that come with it. And at the end of the day, many of them will be amateur professionals.
By outsourcing to an expert, you will access specialist knowledge. They’ll have the skills and tools that you and your staff don’t have. Whether it’s expertise on corporate compliance, Facebook advertising or the intricacies of quantum physics, an expert with specialist knowledge will always be in a position to deliver the best possible value.
If you rely on amateurs and mid-level professionals, you will experience painful costs in the long-term. Somebody will sue you because you’ve made a critical error. A regulator will prosecute you because you missed a deadline. Your company won’t get that many leads, and your business will dry up.
Amateurs won’t do the best work and your business will suffer as a result.
- You can control your cash flow
If you know how much your professional will charge you at the outset (and every good expert should provide that transparency), you can convert a fixed cost (namely, a salary) into a variable cost (namely, a pay-as-you need service provided by an outsourced expert).
You won’t have to fall off your chair the next time you receive a bill – because you’ll know exactly what to expect.
How to hire the right expert
Earlier in this article, we outlined why company directors try to avoid hiring experts whenever they are able. Below, we’ve outlined some quick tips on how to properly hire an expert so you can avoid the pain points that we’ve outlined.
- Do your research
The market is saturated with so-called ‘experts’. Make sure you properly research the experts you engage to ensure they can provide value for money. Seek referrals, read online reviews and check out the content they’re regularly publishing. If what you see looks good, the chances are they could be right for you.
- Dig deep when speaking to them
Ask the expert a lot of questions to find out exactly what you’re getting yourself into. Don’t just ask them ‘how much they charge’. Find out:
- The exact services they’ll provide you
- What value your company will obtain if you go with them
- Why they are different from the other experts out there
- What the expected turnaround time for work will be (and make clear to them what your required turnaround is)
Generally speaking, the more you find out about them, the better position you’ll be in to make an informed decision.
- Listen to the questions they ask you
If your expert does not ask you any questions, or only asks a couple of fairly silly or basic questions, then do not hire them.
An expert committed to providing value for money will want to know as much information about your business, your goals and your expectations as they can.
The more they know, the better they can serve you.
- Give them an opportunity to alleviate your objections
When speaking to an expert, tell them your honest concerns. Don’t hold anything back. Be upfront about worries such as price uncertainty, delay, and operating on incorrect assumptions.
If your expert is properly able to satisfy these pain points immediately in an initial interview or discovery call, then you can feel secure that you’re in safe hands.
- Deliver them clear instructions
Once you’ve decided to hire your expert, provide them clear instructions on what you expect and what result you want to achieve.
Providing unclear or vague directions and assuming your expert knows everything about your company and what needs to be done will always result in an outcome that doesn’t satisfy you.
That being said – the expert should be in a position to know what they need to know (and will ask you detailed questions to get that information out of you).
Hire the right expert – and it’ll pay off every time
Once you’ve found an expert worth their weight in gold, then you can sit back and watch your company enjoy unprecedented results.
You and your employees will be able to focus on your core business. Your team will get on-demand access to specialist knowledge when they need it.
The right expert will make your life easier, save you money in the long-term and help your company grow to achieve its goals quicker than you initially thought.
We’ve accumulated decades of experience and know-how on financial accounting and corporate compliance and are prepared to deliver you the expert value you need.