What's the cost to open a C/B lab?

Jason D

Jason D

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Jason,I am not not sure how did you arrive to that number ? The subject line was “What is the cost to open C/B lab” .
What you can buy with $50k ? That budget not even enough to buy full supplies and tools to operate C/B lab and I don’t want to even mention about equipment .
My bego induction casting machine alone cost $30k and I don’t want to list the rest of my equipment.

Installing a sink alone in commercial and professional building cost 6k .

This is all inclusve sale with accounts. I have books that worth $500
From your previous posts I see your calculations based on $100 per crown. I charge $220-250 average .
Try to find accounts like that and see how much you spent on marketing untill you got one account willing to pay you that fee.

And what does the cutthroat region really means , I don’t get it ? Or region in general ?

C/B lab is type of business that can provide service in any region. Who can stop me to work with the dentist in Washington DC ?

What is wrong with my region ? All my accounts are based on LA.

I have about 8 dental offices in the same bulding that I never even attempt to contract.

I’m not trying to offend you, it’s simply the way business acquisition is valued.

The region is incredibly dense with low cost, heavy marketing labs.

A small lab cannot sell the “book of accounts” with much success because they are usually tied to a relationship with the owner or a key employee - if that person goes the customers go too. Therefore an acquirer will not count on that revenue continuing if they are smart.

Labs generally sell for 3x-4x ebidta but that number gets skewed dramatically if you go to either end of the curve in size. A smaller lab gets a smaller multiplier because the value is all tied to one or two employees. Bigger discount labs also get smaller multipliers because of narrower margins.
Best way to get bigger multipliers is with systems (training, managerial, financial) that can be turnkey for a buyer. Or to have intellectual property to boost the value, like a patented process or material.

Another multiplier opportunity is branding, be it print, digital or word of mouth...if your lab is the primary lab at a series of study clubs or has exclusivity with a dental society for example as a presenter, educator or even sponsor that might raise your value. As will being “known” in your area....if a dentist asks on Facebook “hey anyone know a good lab for x product?” And 3 or 4 people name your lab at the top of the list then the reputation has a branded value.

Your question about working with a dentist in DC is a little backwards- why would a dentist who never met you from 3,000 miles away want to send you work as opposed to the 5,000 labs that are closer or the 3000 that are cheaper, or the 1000 that are higher end, or the ones he sees in the magazines or at his study club etc etc there needs to be a differentiator there, something you can demonstrate that sets you apart to raise the value...you might have those things, I don’t know because all I know about Your lab is the photos.

The 50k number I threw out was a rough guess at what it would cost to get the equipment in your pictures TODAY - it doesn’t matter what you paid for it New, used lab equipment goes for 15-25 cents on the dollar if it is functional and current, but You might have a hard time convincing a buyer that centurions and lava equipment is current. The benches certainly add to the equipment value.

Again, I am not criticizing, I’m just trying to help you see the situation from another angle so you can look for those things that will help set your lab apart as a good value for a buyer.

The challenge you face in selling your organization is difficult, I sympathize. I know a lot of technicians in the same position… It’s not big enough to sell for the money they deserve after having built and maintained it.
 
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DentMania

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Jason,

I see you have enough knowlgade and experience in business acquisition however I think thats not all you need to apply in dental technology.

To me dense area means lot of opportunities which gives technicians lots of options to choose from, stability and lower cost of services we use.

For instance there is no way you can ship the case to doctor or back to the lab within the same county for under $7 or you can even combine two boxes in one shipping which brings the cost of shipping down to $3.5 per case if you are not in dense area like Los Angeles.

And this was just one example of benefit.

Yes, I agree If I could of sell books of accounts I would of ask $1.5M and definitely not 200k


I have no relationship to my accounts and I think no one needs to have any.

We just need to know what we are doing .

I know what I am doing and I am willing to sell my lab to someone who knows what he/she is doing.


I do not believe in “Key persons“ but I do believe in quality of final product the lab should meet.

I also believe any technician can get in to it within a couple of months if he/she willing to do so.


I am willing to stay and train my system for those who are interested.

I do not agree with your following statement “ if key person goes the customers goes too. Therefore an acquirer will not count on that revenue continuing if they are smart.”


If acquirer is smart and knows what he is doing , open to learn few things during the transition then there is no reason for customer to go or bother himself in finding place to go. Doctors hate to change labs , they do it when they do not have any other options. Unless there are noticeable changes in quality and seller of the lab will be involved in another lab and offering same services for the same price . This is not my intention . I am entirely changing the field of business and ready to sign a document under penalty of perjury that I will never ever contact any accounts I did business with after I sell.


Yes, There is a patent pending under my name within dental technology but it has nothing to do with the lab process I have in place and there is no way the intellectual property be included in the aforementioned asking price .


Re: equipment or lab setup:

Let me not agree with your statement of 15 or 25 cents per dollar for used equipment. I can get you a list of equipment I will be interested to buy unlimited for 50 cent per dollar and I bet won’t be able to get me any.

How about setting it up for a smooth operation ? Does it have a value or not ?

I am sorry but from your post I have a feeling you do not have technical background or even if you had any it was not deep enough to know important details in dental technology.

It appears you believe more in branding then the actual product and true value which comes with it.

For instance Lava equipment you have mentioned in your post :

Do you know that Lava mill is nothing else then Primacon CNC machine ? I am sure need to go through lot of research on that to get it but just to save your time, Primacon is German company who build CNC mills for companies specializing in space engineering or Swiss watch makers . http://primacon.de

This mill built to last with the highest quality of standards , try to compare it with today’s branded mills from china that brake apart in few months.

Or

Did you know that Lava scanner is nothing else then fine German piece of fine optical equipment made by Stainbichler ( Zeiss Optotechnik ) , with 5 micron scanning accuracy , blue strip light technology ?

http://optotechnik.zeiss.com/produkte/3d-digitalisierung


The cost of scanners they make and sell starts from over $100k .

Try to compare it with plastic crap you buy as a result of branded advertisement.

Or

Did you know that Lava sintering oven is nothing else then German made Dekema Austromat uSIC ?

http://jensendental.com/products/dekema-austromat-isic/


Try to call Jensen and ask quotes today then redo your entire math.


In most cases success comes just by thinking outside of the box.


Anyways , I think initially my post were not addressed to Jason but for those who are interested to know “ How much does it cost to set up a new C/B lab “ and I am definitely offering great alternative despite Jason’s arguments.

Interested technicians should call or text me direct T. ( 818) 406- 5006
 
Jason D

Jason D

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/quote "DentMania, post: 278305, member: 20300"]

I have no relationship to my accounts and I think no one needs to have any.

I do not believe in “Key persons“

I also believe any technician can get in to it within a couple of months if he/she willing to do so”


Whasaaaat??
I’m sorry those statements themselves indicate that you know nothing of the value of a small lab.

And you are incorrect about my background but thanks for your assumptions. I have over 35 years on the technical side and can do every operation in a dental lab, analog or digital. (Except bending ortho wire <shudder>)

But I also have the business experience, working in and with many labs who went through consolidations and reorganizations.

I also have done extensive work as a consultant with individuals and companies large and small who buy dental labs. So I’m just trying to help you understand the reality of the marketplace but good luck, you may luck out in finding a buyer who is ignorant of the problems I outlined.
 
vurban210

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This place sure has become a lot more confrontational. Wonder why that is? Hmmmm2
 
Jason D

Jason D

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Lol only because people don’t like hearing different perspectives
 
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Inna-Hurry

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tumblr_nq0yyyT5A81sy3b1jo1_500.gif
 
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Inna-Hurry

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Ya both have very valid points.... but missed the money shot.... The most important one is this: WHO IS FINANCING THE TAKEOVER? Seller or lending institution? Always try very hard to have the seller carry the note-- at least until the business is stable. This keeps focus where it needs to be and lots of skin in the game. It will be easier (and cheaper) to refinance and pay off the seller if you have current p/l statements with new ownership.
 
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Inna-Hurry

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I am very appreciative of this post. Always something to learn!
 
Jason D

Jason D

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Ya both have very valid points.... but missed the money shot.... The most important one is this: WHO IS FINANCING THE TAKEOVER? Seller or lending institution? Always try very hard to have the seller carry the note-- at least until the business is stable. This keeps focus where it needs to be and lots of skin in the game. It will be easier (and cheaper) to refinance and pay off the seller if you have current p/l statements with new ownership.
That’s a great idea! In my interactions the buyers are either venture capitalists or have the money already in place and want expertise evaluating the merits of the business, so it’s something I’ve never thought of before! Thanks for that.
 
CoolHandLuke

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I do not believe in “Key persons“ but I do believe in quality of final product the lab should meet.

I also believe any technician can get in to it within a couple of months if he/she willing to do so.
so, you DO believe in Key Persons.

i mean you must, if you believe you can train anyone. who will do the training? some monkey who you trained and is just passing on info "this is the way he likes it" rather than "this is textbook"

or do you make them read textbooks? i mean at that point, who wrote the textbooks and how much baloney are the throwing at your techs about whats good and bad ? how does a textbook even prepare you to dive into a material like Li Si, when the books were not written for that.

i'm nitpicking here but everyone, bar none, employs a key person or two. even if that person is just a plaster tech, they make models so well that the next person just doesnt have the same apparent quality. or a gold tech, so consistently good at casting, even if they manage to rough up a margin or three theres never a bubble. no porosity.
 
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Mike Fulton

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Just a couple of things:
1- Go on line and google "Break Even Point" learn how to work that formula.
2- If you are in a large city there should be a college with a business dept with some sort of help. It is usually free!
3-Think about an SBA loan, by the time you do all their paper work you'll know what is going on. You'll hate it but it is worth doing.
4- In the end it is not your talent that will make you successful it is your business skills and your sphere of influence. Talent is assumed by your prospective clients.
Good Luck, if you succeed it will be worth it.
 
GG - J

GG - J

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Let's make an example: I have 10 accounts and each account is sending me 20 cases per month. Total of 200 cases x (average $115per case)=$23,000 gross income per month

Overheads:
Rent $2000-3000
Utilities $400
Bookkeeping $250
200 Milling blocks $5000
Supplies $500
Equipment loans $500
Software and miscellaneous $400
Total $10,000

$23,000-$10,000

Does that make sense? Please correct me if there's anything needs to be added.


lets revisit this topic - in what seems to be a ever changing industry

seems to make sense - other than

salary for employee's assuming your not a one man outfit

deliveries - local driver - fed ex - ups

advertising

anyone think of anything im missing to open the doors
 
Contraluz

Contraluz

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lets revisit this topic - in what seems to be a ever changing industry

seems to make sense - other than

salary for employee's assuming your not a one man outfit

deliveries - local driver - fed ex - ups

advertising

anyone think of anything im missing to open the doors
So many things to take into consideration.

But, considering the digital age, I actually think it has become less complicated to start a Lab. Especially if you do not offer PFMs.
You can outsource so many things, nowadays, without giving up quality. Even gold crowns. I still would sinter the restorations myself, though, since it allows me to do modifications in the green stage.

However, if you want to start with employees (if you can find good ones) you better have some accounts ready to go. Otherwise your bank account will be drained quickly...
 
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boblab

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No PFM. I will start out with zirconia and emax from start to finish.
My “areas” means construction, purchasing machines, inventory, rent, etc.
3d equipment scanners, milling machine , printers, sintering furnaces doing it right . 100,000$ doing cheap used equipment maybe 45,000$ get your eggs lined up make a biz plan present it to a bank take out a loan and do it right or it will cost u more In the Long run. U might be a good tech but labs fail because technicians aren’t always good business people. I’ve owned my business 50 years and at beginning I had no clue how to run a business at 22 years old! Good luck!
 
Andrew Priddy

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roughly 45k got us to the point where we can outsource milling and complete restorations.. this includes a ton of DIY. if you can't set up benches, suction, air, you can probably almost double that number. if you don't have a manufacturing space, add that.

actually completed our first cases for delivery last night. Independence Day. nothing could be better.
 

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