eye on equipment

Getting Your Return

Susan P. Tarrant

There are plenty of reasons to invest in finishing equipment and bring the final step of the lens process under your roof: better customer service, quicker turnaround time, increased quality control, and reduced lab bills. Though each practice and product is unique, common estimates point to a potential $10 to $15 savings (gross) per lens job.

How can you be sure that inoffice finishing is right for you, is affordable, and that you'll get the full return of your investment? By researching the right equipment, planning your investment wisely, and plotting your existing lab jobs and lab bills against potential finishing costs and savings.

THE BENEFITS

In addition to reducing lab bills, in-office edging can also provide tangential benefits to your practice that will positively affect your reputation and revenue.

■ COMPETITIVE EDGE. Set your practice apart from the competition by offering same-day service on many lens jobs.

■ CASH FLOW. Same-day service means same-day payment.

■ QUALITY CONTROL. Should a job be rejected, it can be re-done immediately (if done with stock uncuts). This translates into better customer service as the customer will not have to return at a later date to pick up his or her eyewear.

■ REDUCED OFFICE TIME. Administrative time spent tracking a job's progress through the lab and re-scheduling customer pick-up times can be reduced.

■ FUTURE USE. Establishing an edging lab sets your practice up for a future expansion into in-office casting or surfacing.

THE VOLUME

A common misconception is that you need to be a high-volume practice in order to make it all worthwhile. That's not true. According to equipment manufacturers, a good return on investment can be realized with a volume of as low as 15 to 20 lens jobs per week, depending on the type of jobs they are.

When contemplating the in-house decision, don't limit your thinking to the current numbers only. And while you don't want to figure “might-be” numbers into the equation, understand that offering in-house edging and, in turn, a quicker turn-around, will likely bring in more business, adding even more to that bottomline savings.

THE CALCULATIONS

The calculation for determining whether in-office finishing will make financial sense is fairly straightforward, but depends entirely on a practice's individual situation.

The basic idea is this: Take your lab bills for services like edging, grooving, drilling, mounting, and assembly, and plot them against the monthly payment cost of the equipment and supplies. This will also allow you to determine your monthly savings and the point at which the equipment will pay for itself.

Common estimates point to a $10 savings for each job edged, mounted, and assembled in house (add another $15 for each job that entails drilling, grooving, or edge polish). Using those figures, if you edge 12 pairs per day (a mix of beveled and rimless mounts) you will see almost $3,000 per month in savings on your lab bills. Figure in the cost of the monthly payment of equipment (let's say around $850), and you're looking at a monthly savings of more than $2,000 and an annual savings of more than $25,000. You could be looking at a complete return on investment (ROI) in about two years.

These numbers are only examples, and will change according to your volume and the types of lenses sold. An equipment manufacturer rep will be able to help you plot your numbers and your practice's specific selling patterns and volume to come up with individualized savings.

Also, you'll have to determine whether existing staff will be able to take over the finishing work or if you'll have to hire an additional worker. This answer is volume-dependent only. Keep in mind that today's edging equipment is designed to be user friendly, and equipment manufacturers consistently claim that training is easy.

Sound confusing? Don't worry, every equipment manufacturer will be able to do the math for you and show you whether or not your practice can benefit from an edging lab.

THE CONSIDERATIONS

There are many elements of your practice that you must consider when determining cost versus savings.

The best way to paint an accurate picture is to get an average based on at least a quarter's worth of numbers, preferably a year's worth. Be sure to note the jobs you sell as well—simple plastic and metal frame bevel jobs versus the more demanding drill mounts, and material (as the price of uncuts, and therefore your savings, will vary accordingly).

Determine the amount and type of equipment you'll need. An in-house edging lab can cost from $20,000 to $50,000 and will include an edger and tracer, blocker, software, and lensometer. An optional tint tank could run between $500 to $1,000.

Make sure you choose an edger than can handle the types of jobs you sell or want to sell, such as premium lenses or drill mounts.

After running the numbers, you just may find that not only can you afford to add finishing to your business, you can't afford not to. EB

Sample Analysis: Profit Potential of In-House Edgings^*

Based on 10 jobs per day x 23 work days per month
Practice job volume: 230 jobs per month

^* Prices vary by area. Your actual costs may differ from these averages.