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Top Ten Costs of an OPL

Top Ten Costs of an OPL

Some or all of these costs may be saved by outsourcing laundry services:

Laundry Production Payroll


Payroll costs for wages paid to hourly employees who handle linen, including laundry production, soiled sort, washroom, flatwork, ironing, tumble dry operation, etc.

Management Payroll

Employees who handle linen inspection; linen control; janitorial services; machinery repairs and maintenance; and internal linen distribution.

Employee Benefits

Includes payment of social security, workers compensation, holidays, one-or-two week vacations, state unemployment (varies), health insurance (varies), union contributions, etc.

Laundry Chemicals

All detergents, alkalis, bleach, sour, fabric softener, bacteriostatic agents, starch, etc.

Maintenance, Repair, and Parts Costs

Includes all machine repair parts, lubricants, drive belts, iron pads and covers, tools, boiler treatment and water softener salt.

Utilities

Gas, electricity, fuel oil and water account for a large part of expenses.

Taxes, Licenses & Permits

Taxes, licenses and operating permits paid by the facility and allocated to laundry operations.

Equipment Costs

Equipment experiences wear every time it is operated. Replacement costs must be considered.

Insurance / Other Business Expenses

Insurance, lease charges, safety expenses, uniforms, training, and other expenses allocated to the OPL.

Lost Opportunity Costs

The space occupied by the laundering equipment could be used to house a revenue-producing facility such as a physical therapy or day care center (adult or child). An existing program or department within the facility also could expand into the available space, such as a new MRI Center, resulting in an increase in revenues from that department. The space could even be leased out to groups of physicians as office space.


Sources: Managerial Financial Management, Phillips & Associates,©1996; Textile Rental Services Association