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Blogs >> Dos and Donts in Tough Economic Times

Dos and Donts in Tough Economic Times
By: George Obst | Published 01/08/2009

We are in scary economic times and there is no doubt that there are fewer patients having expensive oral restorations. While patients have to take care of their oral health they are choosing less expensive "fixes".  Cosmetic dentistry is down and people are opting for fewer implants.  In these times removable oral restorations are less expensive patient alternatives and "drill and fill" is a substitute for crowns.

How a lab responds to tough economic times determines not only survival but future lab success.

You must look at three areas:

1. Freeze or reduce expenses including payroll.
2. Improve your cash flow.
3. Increase your sales efforts.


Take an in-depth evaluation of your expenses. Reduce expenses as long as they will not impact your level of quality or service.  It is essential that you maintain your quality and service culture during tough times.  Do not lay off employees who contribute to your quality and service. 

However, you can reduce hours over a fairly short duration (no more than one month) and communicate with employees to get their “buy-in”.  Further,  you can ask if any employees want unpaid leave.  Finally, you can lay off employees who do not contribute directly to quality and service.


Improve your on-time collections. Doctors are having tougher times and may want to extend their payables.  With flat or lower sales your cash flow is vital.  Insist that Docs pay their invoices to you within 30 days.

Delay purchases of expensive equipment to conserve cash flow.   Replace only the broken equipment that you need to manufacture oral restorations.   Live with what you have until economic times improve.


You need to significantly increase your sales efforts during tough times.  Ask each customer to refer you to two dentist friends.  Meet with these dentists and present your best case as to why these Docs should try your lab.

Analyze your existing accounts and try to get more of their lab business.  The average dentist does business with three or four labs.

Have your delivery drivers stop at nearby dentist offices, drop off literature, and meet the office manager if possible.  Introduce your laboratory to several potential new accounts a week.

Another idea for sales and profit generation is to offer products that you can provide your customers and out-source the manufacturing to other labs.  Thus, with no additional capital investment you can increase your sales and profits. Brainstorm with you key associates on ideas to reduce expenses and increase sales.  Communicate often with all your associates about the current economics and what you are doing about it.  Be realistic but not overly negative or threatening.  You don’t need unwanted turnover and you should be a steady voice that provides confidence to all your employees that the future will improve.

Above all, remember, during tough economic times you need to:

Reduce expenses that don’t impact quality or service;

Conserve/improve cash flow;

Initiate multiple actions to gain more accounts and increase business with existing accounts.

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Comment # 1 (Posted by Joseph )
Very good blog, keep it up.

Comment # 2 (Posted by Lindsay )
I agree. Increasing sales efforts is key during these tough economic times.

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