Should you finish in house or send your jobs to a lab?
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What decision are we evaluating: finish eyewear in-house or outsource to a lab?
Welcome back to another episode of the Optometry Success Podcast. As always, joined by Dr. Chad Fleming. Chad, always good to see you, my friend. Thanks for being here. Good to see you too, Adam. Thank you. This topic has been on my list or our list, I should say, in our... on our board for a while. And I'm glad that we're going to talk about it here today because I've done an episode on it on 2020 Money, the Business of Optometry, which has, I mean, I've had that show since 2019. And admittedly, I think I've only hit on that on the topic of finishing in-house or sending to a lab I had an episode with Dr. Sam Hornberger and Dr. Jennifer Stewart that were essentially pro-finishing in-house, pro-lab, or pro-in-house as opposed to sending it out to the lab.
I really enjoyed that discussion, but from my perspective in the involvement that I have on the business side, it has always been something that has... been curious to me. How do practice owners think about this? When do they make the decision to, or how do you think about this decision matrix? Do I keep it in house? Do I send it to a lab? Is it based off size of the practice, number of locations, different buying group affiliations? I guess I'll hang up and listen. So when you think of this question, finishing in-house or sending to a lab, what decision matrix starts populating in your mind?
Well, they just came out with a new medication where they combined acetaminophen and ibuprofen into one. And I saw that at Walgreens the other day. And I said, that is the perfect solution. combo for pain, for those types of things. So the first thing that comes to mind is what is my pain relief when it comes to in-house or sending to a lab? And I maybe would have answered differently prior to that medication being combined because I always had to think about taking two different medications. But right now, I'm pretty good on 500 milligrams of acetaminophen and 400 milligrams of ibuprofen. And so I can run an in-house lab. That's no problem. I've been in practice long enough that I used to work in a lab and we used to that used to be the like you had to have an in-house lab through 23 years of ownership, 24 years of ownership.
I've ebbed and flow and now I'm sitting on, we do have an in-house lab. We're very limited of what we run in an in-house lab because of efficiencies, because of staffing, what's changed in the last five to six years in regards to staffing, the knowledge of the staff individuals and the having multiple locations and getting those jobs out once they're cut out when you're a single location and you are filtering jobs at that location with an in-house there is a built-in efficiency with that yes it's not a big deal to put it with a carrier and send it to somebody overnight but every decision adds or subtracts from efficiency And so what I've run into is we're sitting in a space right now that with cost of goods at 20 percent, with our efficiencies running and growing from within with the five locations and seeing what we've grown, I've leaned away from an in-house lab.
Now, I could bring three other colleagues and all respect to those who did it on 2020 money, they could have some pretty good reasons for doing an in-house lab. But I think a lot of those can be heavily dependent on, oh, well, we've got a great lab manager. fantastic. Now that lab manager moves on, are we still doing in-house or do we need to pivot? So my opinion is, is that you've got to watch those numbers relatively closely. And the reason is, is because I think they can go from a large margin of profits to a very small margin of profits very quickly because we don't calculate the soft costs of employment, attendance, waste, taking care of the square footage, what we pay for the square footage to have the lab, what we pay for additional HVAC to have the lab, what we pay for additional water to have the lab, blah, blah, blah, blah, blah.
And I think when I sit and have a friendly debate with somebody who doesn't do a lab or does a lab and I'm doing a lab.
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Chapters
3 chapters
1
What decision are we evaluating: finish eyewear in-house or outsource to a lab?
0:06–5:52
2
What initial factors do practice owners consider when weighing in‑house finishing vs outsourcing?
5:52–21:28
3
Which soft costs (square footage, utilities, training) are often overlooked when running an in‑house lab?
21:28–21:56