Use this tool to help on-premises laundry (OPL) owners determine how much it truly costs to own and operate an OPL by filling in the fields as instructed and ensuring the data is accurate. Prepare to present the results to the OPL decision maker with a sales proposal. The better the data collected, the more accurate the actual cost determination will be.
If you wish to leave a copy of the worksheet with the OPL owner, delete the TRSA logo that appears in the upper right corner of the calculator (sheet 2) and replace it with your company logo.
When helping an OPL determine its true costs, some factors to consider are:
Equipment: OPLs must account for initial capital investment, installation, maintenance, and eventually, replacement. Outsourced laundries consistently upgrade their equipment and expect more efficiency from their production personnel to stay competitive.
Space: Space in the hotel occupied by its OPL can be used for other revenue-generating operations. In new hotel construction, building costs for the OPL space are a factor as well.
Utilities: OPLs may allocate utility costs based on square footage. This often doesn’t produce an accurate representation of what utilities are used and costs are often underestimated.
Labor: Finding an adequately sized, well-trained labor supply is a challenge. Running an OPL means hiring, training, and managing personnel with a variety of skills specific to the laundry business.
Supplies: Outsourced laundries buy in greater quantities, giving them greater buying power and leading to cost and operating efficiencies.
Economies of scale: OPLs often find that when they attempt to meet their low ‘cost per pound processed’ objective, they can’t produce the linen cleanliness and appearance needed, because the goal is based on the economies of washing attained by a larger, perhaps industrial-scale, laundry.
Compliance: From environmental regulations (Clean Air Act, Clean Water Act, effluent guidelines) to worker safety issues (OSHA regulations, ergonomics, bloodborne pathogen standards, workers’ comp, recordkeeping requirements), an OPL must address many compliance issues. Staying in compliance can be costly, especially if an OPL’s core business is not laundry.
Additional services: In addition to offering a broad product mix processed with the newest technology, textile service companies may offer tracking systems and other value added services that would be cost-prohibitive to an OPL.
Inventory: Linen rental service relieves a hotel of paying inventory expenses directly and can reduce them. They include the initial capital outlay and costs for carrying, controlling and maintaining inventory. Access to a greater variety of linens is also possible, as a textile services company has the buying power to procure a wide selection of garments and other reusable textiles for customers, introducing new products to them as these appear on the market.