Just like a car, no single component stands alone. All financial components work together to give you a clear financial picture of your massage business. Therefore, you need to document all financial transactions and have a massage financial management plan.

Like most of you, I try and get my car to the mechanic periodically for servicing.

Every 3,000 miles, I go in for my oil change.

Every couple of days, depending on how far I have been driving, I make a stop for fuel.

I have things that I use to remind myself, like the gas gauge for fuel and the oil sticker in the corner of the window.

Like many people, we tend to take these things for granted.

We often do not stop to think about how we would be able to drive without them. We could try and estimate how far we have driven and take the chance that we know how much fuel we have used.

I do not know about you, but I do not like living my life with that much excitement. I am sure that you do not either.

Your business finances allow you to see how far you have come and what you need to do to achieve your financial goals. They are your guides to arriving at a successful practice.

Having a watchful eye on your business finances allows you to always be in the driver’s seat. If you understand how to organize your financial records, and read and interpret your numbers, you can quickly switch lanes if you feel you are going off course.

You can make a sudden stop when there is a roadblock or speed up to beat the competition.

Why Finance is So Important

Finance is a vast topic, and many of my massage clients have different reasons why they state it is important to them.

In a nutshell, finance—both personal and business—is all about money, something that often carries emotional significance but that affects us all differently.

My massage clients each want a clear picture of the flow of their money through their businesses.

They want to know if they can afford to make renovations, buy equipment, launch a new marketing strategy, pay themselves a reasonable salary and move their business forward.

In massage enterprises—or any business, for that matter—finance consists of dealing with taxation, revenue, massage business expenses and settling debts from time to time.

These components can make the financial side of your business a bit much to understand.

Let’s look at some areas that must be understood.

Financial Statements

Just like a car, no single component stands alone. All financial components work together to give you a clear financial picture of your massage business.

Therefore, you need to document all financial transactions.

You do this through your financial statements. These statements are the sum recordings of your business transactions.

There are four types of financial statements:

  • Balance Sheet (Statement of Financial Position). This type of financial statement reports the financial health of your massage business.

This statement has three parts to it: assets (what is owned); liability (who/what is owed); and equity (the worth of your business).

This statement helps answer such questions as, “Does your business have enough money to pay the debt owed to creditors?”

  • Income Statement (Profit and Loss Statement). This type of financial statement reports the profitability of your massage business.

This statement has two parts: income—what has been earned over a set period; and massage business expense—what costs the business has incurred over the same set period.

This statement helps answer such questions as, “Is my business profitable and are the revenues earned for the period enough to pay for my massage business expenses incurred for the same period?”

  • Cash Flow Statement. This type of financial statement reports where money is coming from and how it is being spent during a specific period.

Cash flow activities are categorized into three groups: operation activities, which represent the cash from the primary activity of the business; investing activities, which represent cash from the sale or purchase of assets that are not part of your inventory; and financing activities, which represent cash spent on raising or repaying debt.

  • Statement of Changes in Equity. This type of financial statement reports change in the owner’s equity (value of shares in the company) over a set period.

Using the analogy in the beginning, once you know how much fuel you have in your car you can determine how far you can travel before the need to refuel.

Understanding your financial statements allows you to do the same with your business.

Decisions involving money will no longer be something subjective, and oftentimes emotional, but will become objective using the data from the financial statements.

The thought, “I feel I have enough money to pay the rent or buy supplies” is replaced by “I know I have, or don’t have, the money.” Knowledge is based on numbers, as the numbers tell the story. You either have enough gas to drive, or you do not.

I am not saying to take emotions out of the equation. I do want you to remain passionate about your business—but when you have the correct numbers to back your money decisions you are less likely to run into problems within your business.


I encourage all clients to open a savings account and start a habit of depositing money. In the beginning, the habit becomes more important than the amount.

Saving a portion of every dollar collected allows for peace of mind for unplanned situations. Your business savings work as an insurance policy in the event you fall short of cash. You have it—when and if you need it.

Many massage therapists whom I work with run into a shortage of cash when there is a huge influx of gift certificate redemptions.

When a client purchases a gift card, they pay upfront for future services. However, gift cards can be redeemed at any time, which can cause a conflict with your business cash flow. Time used to perform the gift-card services tend to intrude on the time needed for non-gift card clients.

Bills still need to be paid, and supplies still need to be purchased, which is why it is essential to put away money. When saving a set amount becomes a habit, the interruption of paying bills is unlikely to happen.

Some Massage Business Expenses Need Constant Attention

You should always keep your financial eyes on the road. Clients’ needs change, trends change, your business goals change, and your personal goals may change.

Change is all around us, and you must be ready for it when it happens.

Review your financial statements monthly. Ask questions:

What is happening in the massage industry, and why?

Does the industry or my location call for change in the prices of my services?

What segment of my business is losing money and what segment is making money?

Are my massage business expenses too high? Why?

Learn More About Massage Financial Management

Learning more about financial management starts with financial literacy and your commitment to stop avoiding and ignoring the financial side of your business.

My motto is, “The learning is in the doing, and the more hands-on you are with your numbers, the easier it becomes to comprehend the how and why behind each financial transaction.”

Start by reading accounting and finance books for beginners. After a while, you will have some books that you keep coming back to for reference. (Visit your local library and check out books on finance. There is no need to buy a library of accounting books.)

Get free help from SCORE, a national organization that has a partnership with the U.S Small Business Administration.

SCORE assists entrepreneurs with all stages of their business, through one on one mentoring and workshops.

SCORE mentors consist of highly skilled and experienced professionals from all industries. These mentors volunteer their time, as they are strong supporters of the success for small businesses.

Invest in getting personalized help with understanding the financial trends and accounting cycle of your business.

No two massage businesses are the same. What works for the massage business in the next town may not work for you.

As I tell each of my clients, every industry has its language.

Finance is not any different.

Becoming familiar with basic accounting principles and bookkeeping procedures will allow you to make fundamental business decisions on the information provided in your financial statements.

The need to understand your finances is vital to the survival of your business.

Just like the fuel gauge, odometer and other devices in your vehicle that allow you to get safely from one destination to another, so are your business finances key to moving forward in life.

Understanding business finances—and using financial tools—will enable you to start up your massage practice and stay on the road to success.

About the Author

Lozelle Mathai, MBA, CFEI, is the owner of Closing Your Books, LLC in Newberg, Oregon. She educates small business owners on how to understand their money flow and how to implement a system that works for them. Mathai wrote “’Can I Afford to Buy That?’ [Yes, You Can]: Here’s How to Finance a CE Class, New Table or Equipment” for MASSAGE Magazine’s May 2018 issue.

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