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A Monthly Update for Optical Laboratory Owners and Managers August 2009


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Make What You Say, Pay!

What Is The Right Question?
By Anne Miller

When writer Gertrude Stein was dying, the story goes that a friend leaned over and asked, “Gertrude, Gertrude, what is the answer?” and, from her death bed, Gertrude supposedly responded, “What is the question?”

If you don’t ask the right question, it’s hard to get the right answer, which leads me to this month’s “Make What You Say, Pay!” theme. In a recent B2B magazine article, a contributor wrote that to think that training is the solution to poor business is to look at the problem very narrowly. His point was that if the comp-ensation for reps is not right and if the systemic supports for success are not in place, then sales training alone is never going to be the answer to the question: how do we increase our business?

As much as I am a proponent of sales training, I have to agree with him. If people are not rewarded for performance, they will not perform well. If the staff doesn’t understand its own product, how it works, what problems it solves and its advantages vs. the competition, they will not perform well. If marketing support in terms of collateral materials and a flow of new ideas are absent, a sales team will not perform well. All these things work together to protect and grow business.

Make What You Say, Pay!

Knowledge Is Power
Admittedly we are in a tough economy and most businesses are challenged (except for bankruptcy and restructuring experts), but there are opportunities out there, no matter what your industry. Money is being spent where value is perceived. As you look at your team’s situation, a good exercise is to ruthlessly examine every aspect of your business and see what you can do to strengthen any soft spots, like compensation, systems, etc. One area that often pops up is the fact that many reps are not clued in to what supporting departments in their own firms do. This ignorance can result in superficial probing and off-base presentations which results in lost business or less business than was available.

I recently worked on an assignment with an online company that understood this. They realized that the opportunity to win new business was not necessarily more sales training, but more internal education about the company’s resources, processes, and technologies, so that their reps could be smarter on their sales calls and more likely to capture all the opportunities they came across.

Working collaboratively with all departments and spearheaded by sales and operations, we created a meeting that brought technology, research, marketing, and sales together for a lively, interactive learning experience that achieved that goal. The keys to success here were:
1.Recognizing the need to make the reps savvier about their company’s operations.
2.Transforming all the (often very dry) information the various groups had to present into a lively, engaging learning experience that would be fun and would stick.
3. Having everyone in agreement on the objectives of the project.

Management and sales hailed the two days as a great success. Follow-up is to come and all agree positive results are sure to be seen in future sales.

Next Step
If you run a sales force, consider this very close examination of every department that impacts a sale. Is your sales force knowledgeable about each one? Is your sales force facile enough to use that knowledge as a competitive edge in positioning your offerings?

If you are an individual sales person on a staff, do a similar examination of every department that impacts your sale and make it your business to learn from each how what they do can add value to your selling efforts.

Knowledge is power.

Keep that sales energy and creativity going! See you next month.

©2009, Anne Miller, author, "Metaphorically Selling," www.annemiller.com.

 
HR Corner

Verifying Applicant Information
By Hedley Lawson

Verifying Applicant Information

Recruiting and employing new talent remains one of the most important management priorities in today’s eyecare practice. Before extending an offer to a new employee, however, make sure to follow the following essential points:

Obtain signed authorization from the individual to check references and verify all information provided on the job application.

Require signed job applications from all job candidates, which include a statement that any misrepresentations or omissions will be grounds for termination.

Have applicants provide contact information for prior employers as well as personal references.

Verify degrees and training by contacting schools and colleges.

Verify licenses with licensing agencies.

Contact former employers to verify job performance, dates of employment, positions held, salary and responsibilities. Ask the former employer whether they would rehire the candidate.

Keep a record of all reference activities as well as responses received, even if the response is a refusal to provide information. If the individual is hired, be sure reference materials are maintained in a record separate from the employee file.

Make sure consumer and investigative reports obtained are consistent with state and federal requirements.

Hedley Lawson brings over 25 years of optical industry experience to JMI. For over 10 years, he has been a contributing editor to VM, most recently as writer of the monthly column “Business Essentials.” He is the Contributing Editor of VM's E-Newsletter Business Essentials.

 

 

Decision Making: How Much Debt Is Too Much?

Debt Can Increase Returns?

Lab owners are frequently confronted with the decision about financing large purchases of equipment and technology. Using debt to fund the purchase is often the best choice when making the investment because it is readily available and inexpensive when compared to equity. Equity financing is often not reasonable because it reduces control and dilutes the ownership of the company. But debt can also be a trap that can slowly wring the life (or cash flow) out of a firm.

The rule of thumb in the optical lab industry is that most well operated firms should only maintain up to 10 percent of annual net sales in total scheduled debt. Scheduled debt includes the total principal amount of bank notes, capital leases, long-term (non-real estate) equipment leases, and any other long term commitments that have fixed payment terms. Although the rule of thumb is a good indicator of reasonability, it should not be the only measure used to determine the level of debt that a lab can effectively manage. Firms in the industry can typically manage a maximum debt service (principal + interest) when there is net positive cash flow, or EBITDA (Earnings before interest, income taxes, depreciation, and amortization) less taxes is 1.4 times or greater than the debt service. This means that for every dollar of debt service the company should have $1.40 available to pay it.

For example, two firms are presented below. Both firms debt is assumed amortized over a five-year period and paid in monthly installments at an interest rate of 6 percent per annum:


Firm A % of Sales Firm B % of Sales
Net Sales $7,800,000
$13,000,000
Net Income $260,000
$1,300,000
EBITDA $850,000 10.90% $1,700,000 13.08%
Total Debt $2,000,000 25.64% $1,100,000 8.46%
Debt Service (Annual) $463,987
$255,193
Free Cash Flow (Before Tax) $386,013
$1,444,807
Estimated Taxes @ 40% of Net Income $104,000
$520,000
Free Cash Flow (after tax) $282,013 3.62% $924,807 7.11%
(EBITDA-Tax)/Debt Service $1.61
$4.62

While both Firm A and Firm B seem to be managing debt well and are able to service debt payments effectively, Firm A has only 3.26 percent of net sales available to fund working capital requirements while Firm B is far more comfortable with 7.11 percent of Net Sales available. The major risk for Firm A is should economic conditions negatively change Free Cash Flow after tax could decline and squeeze its ability to fund working capital and potentially limit its ability to properly service debt. Firm B is in a better position to seize upon new opportunities because its available cash to do so.

This article is the sixth in a series on “Decision Making.”

Read Part 1, Part 2, Part 3, Part 4 and Part 5.

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Jason Meyer—Jason A. Meyer is senior vice president, HPC Puckett & Company. Based in San Diego, Calif., HPC Puckett & Company specializes in mergers and acquisitions of wholesale optical laboratories. You can send comments or questions about this article or any other Dollars & Sense articles to Jason Meyer at jam@hpcpuckett.com.

Valley Forge Classifieds

Leslie Clifton of Professional Ophthalmic Laboratories (POL)

Leslie Clifton of POL

  Leslie Clifton

Leslie Clifton, the pinnacle of Professional Ophthalmic Laboratories' (POL) customer service team, started at the lab in March 2000. POL has been operating as an independent lab and partnering with customers who seek personalized customer service since 1956. POL has two locations, Roanoke, Virginia and Arden, N.C.

As the Roanoke lab’s customer service manager, a typical workday for Clifton begins at approximately 7:30 a.m. Clifton is responsible for managing the customer service department, controlling the computer billing and pricing division, developing the laboratory staff and catering to POL’s customers. “I am responsible for preparing myself and the staff to adhere to our customers and their needs. Our customers are our most important responsibility,” said Clifton.

Before her employment with POL, Clifton worked for a local grocery store. At age 17, she arrived at POL and was immediately hired as a surfacing technician. Throughout her training, Clifton gathered insight into the optical industry, which enabled her to advance in her career. “I entered the business as a young girl with no real direction. POL has helped me to become a professional who aims for personal growth and betterment,” said Clifton.

With both POL labs being in different cities, teamwork is an essential part of the laboratory’s mission. Clifton schedules weekly conferences, as well as meetings that include both the Roanoke and Arden customer service departments. Clifton emphasizes that the strong commitment to quality and consistency are vital elements in this cohesive POL equation.

Outside of work, Clifton enjoys attending industry tradeshows and seminars. “I have worked hard to sustain the management position I currently hold by supplementing myself with the right knowledge and networks of people in the optical industry,” she said. Clifton plans to remain with Professional Ophthalmic Laboratories until her retirement. “POL continually keeps all members of the team working together to form an everlasting bond. POL is my home away from home,” she said.
Samantha Toth

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Carl Zeiss Vision

Labapalooza, Jobson’s Top Labs Party, to Move to Vision Expo West—Festivities honoring Vision Monday’s Top Labs and LabTalk Magazine’s Web Site of the Year will be held for the first time at Vision Expo West in Las Vegas. This year’s Labapalooza party will take place on Thursday, Oct. 1 from 6:15 to 8 p.m. at the Venetian Hotel, according to Jobson Optical Group, which publishes both Vision Monday and LabTalk.

This year’s festivities will include the release of the rankings from VM’s 2009 Top Labs Report, as well as the presentation of LabTalk Magazine’s 10th annual Optical Laboratories Web Site of the Year Award. Eycare professionals who wish to nominate their favorite site can do so by clicking here.

For the past nine years, lab Web sites have been judged on the look and feel of the site; value of the content; and whether or not the site meets the needs of the eyecare professional. Once again, ECPs will decide which lab Web sites provide them the information they want and need. ECPs can nominate a Web site by clicking on the survey link. Eyecare professionals who nominate an optical laboratory Web site will be entered into a drawing to win a $100 gift certificate.

Winners of the second annual Trash to Treasure art contest, also sponsored by LabTalk, will be announced as well.

In addition to these award presentations, Labapalooza will feature cocktails and entertainment. The complete Top Labs Report for 2009 will be published in the Oct. 26 print edition of Vision Monday.

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Trash To Treasure

An entry in last year’s Trash to Treasure contest.

Enter the Trash to Treasure Finishing Pad Art Contest—Don’t throw those finishing pads away. Turn them into a work of art and win. Package up your artwork and mail to: Jobson Publishing, Attention: Finishing Pad Art, 100 Avenue of the Americas, 9th Floor, New York, New York, 10013. ARTWORK WILL NOT BE RETURNED.

All artwork will be photographed in the Jobson studio for judging. Photos of the winning entries will also be published in the January/February issue of LabTalk. The deadline to enter is Sept. 1, 2009. Winners will be announced at the Labapalooza event being held at Vision Expo West in Las Vegas. First place will receive a $500 American Express Gift Card, second place, $200, third place, $100.

There are two ways to enter this year’s Web Site of the Year Contest. Labs can submit their Web site for consideration by sending an e-mail to LabTalk editor Christie Walker at cwalker@jobson.com. In the e-mail include the name of the lab, the lab Web site address, contact person name and phone number. ECPs can also nominate labs by using the Vision Monday survey tool located on the VM Web site.

The Web site of the Year Award winner will also be announced at Labapalooza (see above) and be featured in the November/December issue of LabTalk.

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US Optical

Jesse Arndt, left, with Brian Stene.

Epic Labs Names Jesse Arndt CEO—Epic Labs, a wholesale specials lab located in Waite Park, Minn., has announced Jesse Arndt as its new CEO. He will team with Epic’s president, Brian Stene, as a co-owner of the company.

Arndt replaces Epic co-founder Ron Stene who retired July 1.

“We are all grateful for what Ron has helped establish here at Epic,” Arndt said. “This is a great company with great people and I’m excited about carrying on what Ron and Jim Josephs started in 1992. I’m looking forward to some new and exciting challenges.”

Arndt previously served as Epic’s vice president and sales and marketing manager.

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Carl Zeiss Vision Announces Personalized Lens Partnership With US Optical— Carl Zeiss Vision has announced that US Optical of East Syracuse, N.Y., has signed a partnership agreement to manufacture Zeiss Individual and other CZV custom lenses on-site using the proprietary Zeiss PreciseForm process.

“US Optical is one of the most innovative labs in the country, and has been a leader in free-form manufacturing since its inception,” said Fred Howard, Carl Zeiss Vision’s president, Americas-Pacific. “They are already a great partner for premium Zeiss traditional progressives and AR. The lab is the natural choice to become our latest partner for personalized lenses, and we are very pleased to extend our relationship with them.”

US Optical now begins the extensive PreciseForm certification process. “PreciseForm combines our proprietary customization engine with a patented back-surface application process and rigorous process control to achieve the most accurate, highest-quality result for the wearer,” said Claude Labeeuw, Carl Zeiss Vision’s vice president, marketing and business development. Final certification is expected in the fall. When certification is complete, US Optical will manufacture the full line of customized, free-form progressives from Carl Zeiss Vision, including Zeiss Individual, Zeiss GT2 3D and Zeiss GT2 3D Short, SOLA HDV, SOLAOne HD, Compact Ultra HD and AO Easy HD.

“We are extremely happy to have partnered again with Carl Zeiss to now manufacture, market and distribute their customized backside lenses,” said Ralph Cotran, US Optical’s co-founder and vice president. “This is a natural transition for US Optical, which was specifically created in March 2008 to spearhead the revolution from traditional progressives to customized and digital freeform progressives.”

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Walman Optical

Walman Optical Enters Digital ArenaWalman Optical, the Minneapolis, Minnesota-based wholesale laboratory company, recently implemented a digital initiative that involves the expansion of its lens offerings and in-house surfacing capabilities. Walman is now capable of producing digital progressive lens designs such as Shamir Autograph II and Shamir Element in-house. The company has also installed Essilor’s Crizal coating technology, which complements its new digital lens offerings.

“By offering a digital product that can be produced within 1/100 of a diopter in accuracy, you eliminate many of the issues you see with traditional equipment, you have more control over your breakage, more control over your quality, and ultimately more control over the service provided by your lab,” said lens marketing manager, Tracy Adams. “We are able to provide cutting edge technology, lenses, and our knowledge to our customers to help them be more profitable in what you could call trying times.”

Walman is offering customers a competitively priced lens package called the Prolens HD that combines the Autograph II and the Element with Transitions and anti-reflective coating.

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Younger Optics

Quattro

Quattro

Manufacturer: DAC Vision
Description: Advanced lens polish chemistry specifically designed for resin lens materials.
Features/Functions: According to DAC, Quattro can improve throughput by up to 33 percent while offering “unrivaled surface quality.” It improves clarity with less haze outperforming other leading polishes, and is recommended for both conventional and free-form processing systems.
(800) 800.1550
www.dacvision.com

 
PAL Identifier

PAL Identifier

Manufacturer: Hilco
Description: Progressive lens identifier.
Features/Functions: Allows for quick and easy identification of lens reference points. Eliminates errors in the fitting of progressive lenses. Provides clear, lighted view of etchings in a compact footprint of less than six inches.
(800) 955-6544
www.hilco.com

 
Hoyalux Tact 1.60

Hoyalux Tact 1.60

Manufacturer: Hoya Vision Care, North America
Description: Indoor extended focus PAL designed for computer users and people who perform visually intensive work or hobbies requiring near and intermediate vision.
Features/Functions: Delivers exceptionally wide intermediate and near viewing zones with optimized periphery. Flexible progressive design with a minimum-distance field of view available. Made of thin and optically pure lens material that Hoya recommends for rimless frames.
Availability: Eye Point 40 (EP40), for intermediate vision emphasis, is recommended for patients who wear glasses primarily while at the desktop computer. Eye Point 60 (EP 60), for near vision emphasis, is recommended for patients who wear glasses when reading and working on a laptop computer. The lens is compatible with HiVision, HiVision with ViewProtect and Super HiVision anti-reflective coatings.
(866) 812-8893
www.hoyavision.com

 
SunRx Coated and Uncoated Plastic Polarized Lenses

SunRx Coated and Uncoated Plastic Polarized Lenses

Manufacturer: Vision-Ease Lens
Description: SunRx polarized product line extension.
Features/Functions: SunRx plastic polarized lenses eliminate 98 percent of reflected glare allowing better vision outdoors and while driving, and help protect eye health by blocking 100 percent of harmful UV rays. Available with a scratch-resistant coating ensuring lenses last longer, SunRx lenses provide improved visual acuity and depth perception.
Availability: 77mm semi-finished single vision (SFSV) and 77mm D28 bifocals, both offered in base curves of 2.25, 4.25, 6.25 and 8.25. Bifocal options offer an add range of +1.00 to +3.00. 76mm finished single vision (FSV) planos in a 6.25 base curve also also available. All lenses offered in gray and brown.
(800) 328-3449
www.vision-ease.com

 
1.67 Flat-Top 28

1.67 Flat-Top 28

Manufacturer: Younger Optics
Description: Flat-top bifocal in high-index plastic.
Features/Functions: Positioned by Younger as an upgrade for flat-top wearers with high prescriptions, the lenses are manufactured with high-performance MR-10 resin, allowing them to be ultra-thin. The lenses work especially well in drilled rimless eyewear, according to Younger.
Availability: Adds from 1.00D to 3.50D.
New to the market is Shamir’s single-vision PolyPlus Transitions (gray/brown) offering.
(800) 877-5367
www.youngeroptics.com

 

In This Edition...
DOLLARS & SENSE
Decision Making:
How Much Debt Is Too Much?
FOCUS ON…
Leslie Clifton of POL
LAB NOTES

Labapalooza, Jobson’s Top Labs Party, to Move to Vision Expo West

Enter the Trash to Treasure Finishing Pad Art Contest

Epic Labs Names Jesse Arndt CEO

Carl Zeiss Vision Announces Personalized Lens Partnership With US Optical

Walman Optical Enters Digital Arena

MAKE WHAT YOU
SAY, PAY!
What Is The Right Question?
TECH TALK
Calibration:
Fining
check HR CORNER
Verifying Applicant Information
 

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Transitions
 
Tech Talk

Calibration:
Fining

The most overlooked item in the surfacing area are laps/tools, which ultimately control the final power of the lens. Very often these are not taken care of properly and end up with dents and dings from tossing into buckets or just careless handling. Your lens surface quality will never exceed your lap surface quality. Don’t forget to check the bottom references as well to insure that the tool seats properly on the lap table.

Aluminum is still the preferred material, as it will help remove heat from the fining and polishing process. The trend over the last several years is to have a set cut in tenth increments, 1.600 index with zero pad compensation. If you are looking at this investment in the near future, speak with your supply company for the best recommendations for your application.

Are you using the right fining consumables for the increasing variety of lens materials and indices? There have been major advancements in abrasive and backing technology over the last several years that will give you more consistent stock removals and surface quality finish. Speak with your supply company for the best products and process recommendations.

Do you recirculate, chill and filter your fining water? This is the preferred way to go for laboratories of all sizes. By doing so, you can control your temperatures, thus controlling your process. Your lenses will come out better plus the cost savings of your water and sewage bill would pay for this relatively inexpensive investment. As in wet generating, you should control your temperature between 55 and 60 degrees for alloy blocking and 60 to 65 degrees for wax style blocking. This virtually eliminates the possibility of thermal shock.

Each day after conducting the generator curve check, a short fining test should be run to validate the correct fining evolution. Below is an illustration for the patterns in resin lens materials. Fine your test 10.00 diopter curve on a known good tool for five to seven seconds and inspect.

Tech Talk
Tech Talk
Tech Talk

 
LabTalk Spotlight
August 2009

LabTalk




The Personal Touch Is the Midas Touch
There is an “optical legend” (something like an urban myth) that says November is a slow month, and in a presidential election year, you can go ahead and start shoveling the dirt over November because it’s a dead month. The legend goes on to say that no one spends money until after the election, and then not until their flex-spending dollars are close to running out. But of course, people don’t spend money on glasses too close to Christmas because they’re buying presents to put under the tree instead. Then again, January is a bust because everyone is paying off their holiday debt from December. Using the trickle-down theory of economics, the lack of spending in the retail optical sector translates into vats of red ink for the wholesale labs.

While there may be a few grains of truth to the legend, no one needs to rely on a fairy tale to explain the doom-and-gloom atmosphere that began in late 2008. One look at the headlines has encouraged everyone to frantically search for ways to cut expenses and stay afloat until the global financial crisis passes.

But while some labs rely on the optical legend as an excuse for a lack of profitability, those that are interested in learning how to not just tread water but actually increase business in a slumping economy would do well to follow the example of three New York optical companies: 1-800-OptiSource, Santinelli International, and Universal Photonics.

In LabTalk's feature article, The Personal Touch Is the Midas Touch, find out how the three companies featured in the article are increasing their businesses in this economy. To read the entire article, log onto www.labtalkonline.com. Here you will find the article listed under the Features section.