Dental South Hits Growth Spurt During Recession
Posted Apr 28, 2011 in Labs & Profiles
When you have nine record sales months in a row in an economy like this one, you know you're doing something right.
That's the case at Dental South, an eight-year-old laboratory in Gainesville, Georgia that experienced 27% growth in 2009--a year in which almost two-thirds of laboratories say business was down.
So how did this 10-person laboratory navigate the recession well enough to record double-digit growth? First, it entered the downturn with a solid foundation of fabricating high-end cosmetic work for a core group of dentist-clients. In fact, the laboratory now focuses on zirconia and pressable ceramics almost exclusively. "We really built up our all-ceramic business by earning our clients' trust," says Shannon Davidson, owner of the laboratory. "Early on, I would tell my clients, 'here's what you're paying me for a PFM with a porcelain margin; how would you like to save $20 to $25 a unit? Trust me. Let me be the judge of whether or not each case should be a PFM or a milled zirconia crown.' They did, and they converted to the all-ceramic--which carries a higher profit margin for us--because they love the way it looks in the mouth."
The economic conditions and a drop in discretionary spending hasn't affected that all-ceramic caseload, either: the lab reports that its stream of cosmetic and anterior cases has remained steady. "Despite all the the bad financial news last year, we must have done close to 300 full mouth reconstructions. From what we've seen, people are more self-conscious about their smiles than ever before and they're finding a way to make it happen," says Davidson.
But what has really fueled the laboratory's growth during the recessionary period is its in-house milling center. Though Davidson "paced himself" with zirconia--doing ample research before jumping into any equipment purchases--business took off quickly once he purchased a Dental Mill system and opened the milling center in 2008. Dental South now mills approximately 100 units a day for other--mostly local--laboratories, which represents 50% of its total sales.
In fact, the milling center is where the laboratory will focus its growth efforts in the coming months. "The outsourcing business is easier to control; it's the only production-oriented part of our laboratory. We probably could double that business without hiring another employee," says Davidson. "We'll grow our dentist business too, but we'll do that more slowly because that aspect of our business is more time-intensive."
Dental South's latest project is being well-received by both dentist- and laboratory-clients: full-contour zirconia restorations based on the laboratory's own technique using Crystal Diamond zirconia and modifying it in its green state using Zirkonzahn's Prettau pre-sintering stains to build color from the inside. Currently, the laboratory has 200 full-contour zirconia restorations in the mouth. "Our clients really like the strength of the full-contour zirconia coupled with the esthetics we can achieve using the stains; laboratories are especially interested in the concept of a one-piece crown because it eliminates fabrication steps and produces a larger profit," says Davidson.
Although this new restoration--and much of the technology introduced into the laboratory--reduces labor, Davidson stresses that his plans are not designed to eliminate staff; rather, it's a matter of changing job descriptions and moving technicians into other positions. For example, since many of the lab's clients are now sending Cadent iTero models, the model technician has been trained to scan and design zirconia copings.
The key, he says, is combining the benefits of new technology with the experience of his technicians. "The technology is automated, but machines only do what they're told. For example, for a truly esthetic full-contour zirconia restoration, we need an experienced technician in the design stage to perfect the anatomy and an experienced ceramist to finish and glaze to our clients' standards," says Davidson. "I have people here with 15, 20, 25 years of experience; there's no substitute for that."
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