A lab is like any business—the difference between turning a profit or winding up with a net loss is razor-thin. No stone should be left uncovered in trying to save money, so we’ve put together a handy guide on how to stretch your budget and keep your lab cost-effective without sacrificing the quality of service.
Keep a Detailed Record of Expenses
The first step to stretching a budget and keeping a lab cost-effective is to make a detailed accounting of the revenue and expenses of the lab. Every lab has a budget, but to find the areas where it’s possible to save resources, an even more thorough accounting of all expenses is needed, from necessary supplies to equipment maintenance.
Which procedures and tests are the most profitable for the lab? Which are the most time-consuming and expensive? What are the most and least common tests and services the lab performs? It becomes much easier to find the areas where the budget can be trimmed and stretched with this information.
Use Free Software
One of the best ways to take a thorough accounting of a lab’s expenses and revenue is lab management software. Some high-end software services require substantial upfront investment or a costly monthly fee, but plenty of free software options are available to labs.
Examples of free lab management systems include Senaite, Baobab LIMS, Open LIMS, Ovation LIMS, and LabCollector LIMS.
The free software services may not be as thorough as the more expensive options, but plenty are perfectly capable for most labs. Plus, the savings of the free software can go towards a more comprehensive and effective software program later if needed.
Emphasize Quicker, More Profitable Services
Once it’s clear which procedures or tests are the most and least profitable, consider emphasizing the former and scaling back the latter. Like any other business, a lab wants to perform the services that offer the quickest turnaround time and are the most profitable while limiting the tasks that are less efficient and lucrative.
That doesn’t mean a lab should eliminate all procedures that take longer or cost more money, but they should be less prevalent. No matter what kind it is, a cost-effective lab performs its fastest and most valuable services the most.
Outsource Time-Consuming and Expensive Tasks
A strategy that many labs choose when faced with a time-consuming and expensive service is to outsource it to another lab or company. This tactic is also helpful for services or tests that aren’t time-sensitive.
With the slower tasks out of the lab, staff and resources can focus on the more profitable options. Just ensure that the outsourced lab can perform the functions at the same quality that clients expect from the lab.
Sell Used Lab Equipment
Practically every lab accrues some rarely used equipment that doesn’t provide meaningful value and takes up space. Instead of stepping around the equipment every day in the lab, consider selling it to add a few more bucks to the budget.
You can sell used lab equipment to us here at GenTech Scientific, as we are always looking for gently-used instruments and equipment. Selling the equipment clears space in the lab for other better equipment and allows for the opportunity to invest in other lab areas.
Upgrade to More Efficient Equipment
Even the most well-maintained lab equipment eventually slows and wears down over time, leading to lengthy procedures and wasted time. After selling old lab equipment, consider using that influx of cash to upgrade other equipment in the lab.
Many labs are hampered by the sluggish work of old lab equipment on its last legs, or instruments that constantly malfunction and require repairs. An upgraded machine could be the difference between a healthy profit or a net loss on a service.
Buy Refurbished Equipment
Brand-new, state-of-the-art lab equipment is expensive and can significantly burden the budget. Instead of opting for new models, it’s more cost-effective to choose gently used and refurbished lab equipment that works just as well in many cases.
It’s common that a lab does not need specific equipment and sells it after only briefly using it. Refurbished equipment is an excellent opportunity for labs to purchase high-quality equipment at a much lower price, freeing up resources for other areas of the budget.
Share Lab Space
The overhead costs of owning, operating, and maintaining a test center are a huge swath of many lab budgets. One solution is to share the space with another company and split the costs to ease the burden of overhead expenses.
Many labs can make do with only half the space they have. It’s not feasible in every instance, but for many labs struggling to make ends meet, it’s ideal for cutting down on expenses without sacrificing service quality.
Train Staff in Efficiency
The efficiency of a lab is paramount to being profitable, including the procedures and methods used by the staff. Consider the fine details of every process, especially those that take the most time for personnel to complete.
Can time be saved in certain areas with a different method or better training? Discuss with the staff and solicit ideas and feedback on areas where they can save time and enhance efficiency throughout the workplace. If any changes are made, make sure all personnel are trained on the new procedure.
Browse Other Supply Vendors
It’s easy for labs to become complacent and comfortable regarding what vendors and suppliers they purchase from. While a vendor may have the best deal when the relationship begins, that doesn’t mean they always will.
A lab should always be on the lookout for other and new vendors that may be able to offer a better deal for certain supplies. It’s nothing personal, but getting the best deal possible for the lab is more important than loyalty to a supplier.
Purchase Supplies in Bulk
One of the best ways labs can get more value is by purchasing their needed supplies in bulk. Most vendors will offer better deals to customers that purchase more upfront. It may cost more as an initial investment, but it’ll stretch the budget further and save money in the long run. Just make sure the supplies are non-perishable and won’t expire before they’re used.
Making ends meet for labs can be challenging, but you can find enough on the edges of your budget to turn a needed profit if you follow our tips and advice. Whether you’re buying or selling refurbished lab equipment, GenTech Scientific will help you get the absolute best value.