New Lab Looking For Advice

[eeopti]

I've recently opened up a wholesale lab in an area where there were not any pre-existing labs. Business is going slower than expected as I try to woo ODs and Opticians away from their current lab and be given the opportunity to show them the benefit of using a local lab.

Meanwhile, I'm trying to think creatively on how to stay a float as we build out account base. I was wondering if anyone had any tips on where to find government contracts, or know of any labs that currently have a contract and are looking for support. I'm also wondering how to become a supplier for insurance companies. I've already reached out to VSP and they are not taking any new contracts on. Are there any other insurance companies I should reach out to?

Also, any advice on how to grow our account base is greatly appreciated. We do not have AR (I thought it was way too expensive starting out, but now I wish I would had thought that through a little more) and are a conventional surfacing lab.

Thanks in advance!

[MikeAurelius]

My best advice is don't. Don't look for insurance accounts and don't look for government contracts. They mostly buy from the lowest priced competitor and then dump hundreds, if not thousands of jobs on you. Look at Davis Vision as an example of what happens to a lab when they go insurance/contract base.

Honestly, find yourself a niche and be the best lab that you can for that particular niche. Look at high index, outliers such as high plus/minus, etc as a way to set yourselves apart.

[ml43]

agree, no money in insurance.

government contracts are a whole different animal. Especially if you don't have any experience with them. Most are around 50-100 pages long.

I don't know too many doctors who like to use independent labs. most will just send all work to which ever lab they use the most, be it an E lab, Eyemed or vspone. less paper work for them.

[rbaker]

Starting a lab in this day and age?

I wish ye the best-o-luck. If the insurance companies don't screw ya the banks will screw ya and after the banks finish screwing you the tax man will finish you off.

"Though I've belted you and flayed you / By the living God that made you / You're a better man than I am, Gunga Din."

[eeopti]

Starting a lab in this day and age?
"

I know it seems crazy. But we are not looking to "get big." We just want to make decent salaries. Our goal has always just been to service local accounts. When I did my market research, the ODs were very positive and several even said they would use us. They were excited at the prospect of a local lab. Now that we are open of course it's a different story. :/

It's very unfortunate and extremely stressful.

[ml43]

IMO, your best bet would be to offer same day service on surface non-ar stuff. I.e. high cyl, polarized, ft28/35, maybe basic pal.

if you're resourceful, you might be able to partner with a larger local lab or coating lab to offer same day service with ar.

as almost all decent labs are now offering digital designs for not much more than conventional, sometimes less. it'll be a hard year until you can get established and offer more services in house.

IMO, even the smallest lab with one person needs to run at least 20 jobs per day to stay viable, other wise you'll make more money just working for someone else as a lab tech or a dispensing optician.

[Lab Insight]

I know it seems crazy. But we are not looking to "get big." We just want to make decent salaries. Our goal has always just been to service local accounts. When I did my market research, the ODs were very positive and several even said they would use us. They were excited at the prospect of a local lab. Now that we are open of course it's a different story. :/

It's very unfortunate and extremely stressful.

Don't let an old timer discourage you. There's many small labs popping up here in Canada - secret is service, service and service. The big boys will never be able to compete on that level.

Remain persistent and positive.

[LENNY]

NY people are the worst! We are so spoiled!

[Jubilee]

You can differentiate your self by turnaround, pricing, and service.

Are you digital, or conventional?

Same day service on non ar is good, but requires a significant stock to keep it going. Not too bad if you aren't processing pals...

Partnering with another lab for AR is good. However, their jobs will ALWAYS come first. Also be careful of their reps picking up your clients.

Frame and lens packages might be a way to go. You can either cater to the Medicaid/ACA/Value to compete with Warby style packages, or perhaps partner up with some frame lines looking for more exposure and have a higher end package to offer your clients, something that perhaps with your pricing would still allow them to make a profit selling at insurance copay pricing, but not submitting it to the insurance company, because they make more money dealing with you....

[idispense]

I've recently opened up a wholesale lab in an area where there were not any pre-existing labs. Business is going slower than expected as I try to woo ODs and Opticians away from their current lab and be given the opportunity to show them the benefit of using a local lab.

Meanwhile, I'm trying to think creatively on how to stay a float as we build out account base. I was wondering if anyone had any tips on where to find government contracts, or know of any labs that currently have a contract and are looking for support. I'm also wondering how to become a supplier for insurance companies. I've already reached out to VSP and they are not taking any new contracts on. Are there any other insurance companies I should reach out to?

Also, any advice on how to grow our account base is greatly appreciated. We do not have AR (I thought it was way too expensive starting out, but now I wish I would had thought that through a little more) and are a conventional surfacing lab.

Thanks in advance!

Which equipment are you running with for generators and edgers ?

[eeopti]

Which equipment are you running with for generators and edgers ?

We are running a Coburn XRT and are currently looking into a Santinneli edger. Most doctored have their own edgers around me, but a few don't.

[mervinek]

My best advice is don't. Don't look for insurance accounts and don't look for government contracts. They mostly buy from the lowest priced competitor and then dump hundreds, if not thousands of jobs on you. Look at Davis Vision as an example of what happens to a lab when they go insurance/contract base.

Honestly, find yourself a niche and be the best lab that you can for that particular niche. Look at high index, outliers such as high plus/minus, etc as a way to set yourselves apart.

+1

[eeopti]

Don't let an old timer discourage you. There's many small labs popping up here in Canada - secret is service, service and service. The big boys will never be able to compete on that level.

Remain persistent and positive.

Thanks Lab Insight! Do you happen to know the names of any new labs in Canada? I would love to reach out to them to see what they are doing and build a peer network.

[SailorEd]

I know it seems crazy. But we are not looking to "get big." We just want to make decent salaries. Our goal has always just been to service local accounts. When I did my market research, the ODs were very positive and several even said they would use us. They were excited at the prospect of a local lab. Now that we are open of course it's a different story. :/

It's very unfortunate and extremely stressful.

The doctor that I used to be with was a part owner of a "local Lab". They did reasonably well but not well enough to really make it worthwhile to stay in business. The doctors sold out to the senior lab tech and then he proceeded to run it into the ground.

If you want to be a "local" lab, then you have to find out what the major labs that are doing business in your area are charging their customers. You have to either match that or go a little below that pricing. Then, you need to go to each optical store and personally ask them for their business, just to try you out. Give them really special pricing during the first two weeks of doing business with you. Then, tell them that your lab will personally deliver jobs to them. If they like you, they will continue to order from you. Not accepting insurance (which will pay you virtually nothing) is the way to go. Get enough accounts within, say, a 25 or 50 mile radius and you can make a decent profit at wholesale.

But, if you can't compete with the pricing of the large wholesale labs, then, call it quits before you even try because you will find that PRICE is a very large motivator in every business dealing. You can have excellent, local, personal customer service, but, if you are more expensive than they can get elsewhere, you're dead.

[LENNY]

The doctor that I used to be with was a part owner of a "local Lab". They did reasonably well but not well enough to really make it worthwhile to stay in business. The doctors sold out to the senior lab tech and then he proceeded to run it into the ground.

If you want to be a "local" lab, then you have to find out what the major labs that are doing business in your area are charging their customers. You have to either match that or go a little below that pricing. Then, you need to go to each optical store and personally ask them for their business, just to try you out. Give them really special pricing during the first two weeks of doing business with you. Then, tell them that your lab will personally deliver jobs to them. If they like you, they will continue to order from you. Not accepting insurance (which will pay you virtually nothing) is the way to go. Get enough accounts within, say, a 25 or 50 mile radius and you can make a decent profit at wholesale.

But, if you can't compete with the pricing of the large wholesale labs, then, call it quits before you even try because you will find that PRICE is a very large motivator in every business dealing. You can have excellent, local, personal customer service, but, if you are more expensive than they can get elsewhere, you're dead.

Also keep in mind that the price list price is not always the price that account is paying! Especially in our woods!

[PRECISIONLAB]

Your singing my song brother..

Backstory.. I'm a third generation optician (started in surface @ the age of 12) having worked for family for over 20 years...then like you felt a wholesale lab would be a slam dunk...doctors I knew all said they would support a local lab.

When I first opened my doors 15 years ago I thought I would be inundated with orders...far from it. I took almost 3 weeks before the first orders started to trickle in. As I marketed the lab the same questions arose..VSP? Varilux? Crizal? At the time there were 2 ELOA labs and one other independant in town. Within a year the ELOA labs had merged and the independant had closed. Because the other two labs had closed it opened the doors to VSP. I believe we may have been the last VSP contract lab number issued.

Years later we awarded the first Molina Medicaid contract for New Mexico, Utah and California...great revenue...little profit.

As our volume grew so did the opportunities...first Crizal, then Varilux distributorships.

The key to our success is the personalized service and quality of eyewear we process. I believe ..in order...ECP's care most about quality, consistant and timely service...then price. We also gained thier trust by processing orders the big labs couldn't seem to get right.

Suggestions... Have an in lab open house with some awesome door prizes( to generate attendance) and have the OD's and Opticians see your operation and are ready to service all thier lens needs.

Make the transition to send work to your lab as easy as possible...habits are hard to break but if you offer ease of ordering...the ECP will be using your job envelopes in no time. Make sure you are set up with Visionweb or similar portals to lab orders.

Become visible and supportive...attend any local optical organizations in your area..local trade shows etc. Offer in office trainings and provide up to date POP materials...this gets you in the door and starts the conversation about your lab. Let's them know you are a player in the market.

Don't worry about what the "Big Boys" are doing..in house AR..DIGITAL..etc. Provide oustanding customer service...exceptional quality...and be patient.

[LENNY]

Your singing my song brother..

Backstory.. I'm a third generation optician (started in surface @ the age of 12) having worked for family for over 20 years...then like you felt a wholesale lab would be a slam dunk...doctors I knew all said they would support a local lab.

When I first opened my doors 15 years ago I thought I would be inundated with orders...far from it. I took almost 3 weeks before the first orders started to trickle in. As I marketed the lab the same questions arose..VSP? Varilux? Crizal? At the time there were 2 ELOA labs and one other independant in town. Within a year the ELOA labs had merged and the independant had closed. Because the other two labs had closed it opened the doors to VSP. I believe we may have been the last VSP contract lab number issued.

Years later we awarded the first Molina Medicaid contract for New Mexico, Utah and California...great revenue...little profit.

As our volume grew so did the opportunities...first Crizal, then Varilux distributorships.

The key to our success is the personalized service and quality of eyewear we process. I believe ..in order...ECP's care most about quality, consistant and timely service...then price. We also gained thier trust by processing orders the big labs couldn't seem to get right.

Suggestions... Have an in lab open house with some awesome door prizes( to generate attendance) and have the OD's and Opticians see your operation and are ready to service all thier lens needs.

Make the transition to send work to your lab as easy as possible...habits are hard to break but if you offer ease of ordering...the ECP will be using your job envelopes in no time. Make sure you are set up with Visionweb or similar portals to lab orders.

Become visible and supportive...attend any local optical organizations in your area..local trade shows etc. Offer in office trainings and provide up to date POP materials...this gets you in the door and starts the conversation about your lab. Let's them know you are a player in the market.

Don't worry about what the "Big Boys" are doing..in house AR..DIGITAL..etc. Provide oustanding customer service...exceptional quality...and be patient.

I cant believe that you are only 15 years old! Nice job!

[Lab Insight]

Thanks Lab Insight! Do you happen to know the names of any new labs in Canada? I would love to reach out to them to see what they are doing and build a peer network.

Most are in Ontario, do a google search. Here's a suggestion, make your lab a cooperative where all of its customers are vested members/shareholders. Cooperatives in Canada are legal, although not sure its the same in the U.S.