When considering an edging equipment purchase, some common questions arise. They include: Can we justify the purchase? What’s the hurdle rate for this investment? Exactly how many jobs per day will be needed to ensure profits from the purchase? Believe it or not, a finishing lab only requires a few job orders per day to pay for its cost.
PROFIT ANALYSIS Most labs charge two prices, an uncut price per pair of lenses and a finished cost for those lenses. The markup difference is usually between $10 and $15 (most common) to have work cut, inserted, and finished for you. At an average finishing cost of $15 with five
jobs per day (multiplied by 21 days per month), you will save $1,575 in finishing fees if you cut and complete these jobs in-house on your own edging equipment.
Briot USA and Santinelli International, Inc. both have great reference tools on their Web sites. Both allow users to plug in their own financial data to analyze exact lab costs and create a spread sheet showing expenses and profitability. For an example of a profit analysis of a leased machine, see “Profit Analysis for Edging System,” below (this is also located on the Santinelli site).
LEASE VS. BUY There are advantages to both options. Leasing allows you to upgrade equipment periodically without the issues of dealing with a trade in, the worries of maintenance, or
the hassle of attain-ing financing. Buy-ing is typically an option for those planning to own their machine for five-plus years. With the buying option, you can receive tax deductions on the interest and depreciation, along with qualifying for a lower interest rate and longer term financing—which will decrease your monthly payment even further. For a purchase example, see “Breakeven Points for Finishing Equipment,” above.
To make the right decision, consult your tax advisor and run a few financial scenarios. After you’re through, instead of asking yourself if your practice can afford an in-house lab, you’ll most likely be ask-ing how you can do without it.
Francis Gimbel, Jr. is an optician, private consultant, and manager of the PENN Optical Department at the University of Pennsylvania.
WHERE TO FIND IT Briot USA 800-292-7468 • briot-usa.com
Santinelli International, Inc. 800-644-3343 • santinelli.com
