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February 13, 2009
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The Good Ole Days

The new mantra is working more hours to stay slightly ahead or even.

By Pam Johnson

Remember when large implant cases were flying into your laboratory? When high-end cosmetic smile makeover cases were commonplace? Less than 12 months ago business was strong and less than four years ago more than 10% of lab owners responding to a 2005 State of the Industry Survey said they planned on retiring between 2006 and 2008.

All that has been turned upsidedown in the past 6 months and plans to retire in the next year or two have been put on hold for the majority,according to data compiled from DLP’s 2008 State of the Industry survey, even for those clearly over or near retirement age. The current state of the economy has most business owners rethinking exit strategies and revamping business models going forward to just to survive this economic sunami. The economic turmoil has us looking back over our shoulders to only a few short months ago and sighing at the memory of the good ole days when business was on more solid footing.

In spite of all this uncertainty, a majority of lab owners who participated in the November 2008 SOTHI survey said they always enjoy the profession, even though most admitted they were concerned about the deepening economic situation and the impact the economy would have on their businesses in 2009. More than a third said they predicted their laboratory’s gross income for 2008 to be less than it was for 2007 and nearly another third believed their businesses flat-lined for the year, showing neither an increase nor decrease.  Only 34.2% replied that they expected their business gross income to increase in 2008.

Cross-tabbing the questions regarding laboratory size with that on 2008 gross income, it is clear the small one and two-technician labs as well as those with 6 to 10 employess are those who feel most vulnerable with 38.5% and 45.2% respectively saying they expect 2008 business gross income to decrease over 2007.

The expected decrease in business revenue for 2008 comes with personal sacrifice in terms of hours per day and weeks per year spent in the business trying to bump the bottom line upward. Between to 2005 and 2008, the compiled data reveals an industry that is putting more time in the business and reaping less of the rewards. In 2008, 70.4% of those responding to the survey admitted they are spending 50 to 52 weeks a year at the bench with more than 25% saying they work the full 52-week year. And more than a third of respondents said they spend six to seven days a week in the lab and work 10 to 14 or more hours a day. According to 2005 statistics only 63.1% of respondents worked 50 weeks or more and only 27.7% spent more than five days working in the lab.

On a brighter note, gross laboratory income over the course of the three years between 2004 and 2007 increased significantly for most laboratories. Fewer laboratory owners in 2008 reported gross laboratory income for 2007 in the bottom income levels compared to 2005. See below for a complete comparison chart of gross laboratory income between 2005 and 2008 and other comparison data.