The perks of a private massage practice are plenty—and for those of you who have entered entrepreneurship and are now proud business owners, you know there is a lot more work happening behind the scenes for a successful massage business to thrive.
For those of you thinking about going into business for yourself, and for those who have and it didn’t go well, learn from our massage business experts who tell you how to implement advanced business education.
These top tips from our business experts will get you started on your road to business ownership or help you get back on track—and can prevent you from making big mistakes in your finances.
Learn the Language of Business
Becoming a business owner requires learning the language of business, which is accounting. The word accounting may sound daunting. but according to financial accountant Lozelle Mathai, MBA, CFEI, “it’s like learning any new language. It just takes patience and practice.
“Like you have clients who schedule an appointment every month as part of their wellness, you have to schedule your bookkeeping and make your finance part of your routine. Even if you outsource it,” said Mathai, who owns Healthy Bodies of Finance, a division of Closing Your Books LLC.
Learning accounting for massage therapists doesn’t necessarily mean going back to college and studying it as a track. It means enrolling in community or online classes that cover the basics, so you learn the terminology, how to track expenses, and how to do your own bookkeeping.
The foundation of accounting is having an understanding of what a financial statement is, what money comes in and what money goes out, and where they are located on your financial statement. It is understanding your business’ income statement, balance sheet and cash flow. Mathai said these are critical for a business owner because when you don’t know what you have you may be leaving money on the table.
“There is an ‘Aha’ moment when you get it. It can help you make better choices on where you are spending money,” Mathai said. For example, buying lubricant in bulk, selling products, or discovering what services are bringing in the most money and which are not. Consequently, this shows you where you can focus your marketing efforts.
Learning the fundamentals of accounting will help you make better business decisions, and it will help you be better prepared to interview, hire and review the work of your bookkeeper if you decide to outsource. It will also make tax season easier because you will have done the monthly bookkeeping. “So, when December rolls around it’s just another month and you’re not scrambling,” said Mathai.
Accounting gives you an understanding of your financial position at any period in time within a fiscal year, said Mathai. Aspects of your financials will include operating costs, which are the resources needed to maintain a business up and running, and profits the resources left after operating costs are paid. Rent, utilities, supplies, payroll and overhead expenses make up the operating costs. This is the amount you must make each month in order to keep the lights on. Having some basic knowledge of this will help you navigate the world of business.
The gains from advanced business education are not only a sense of confidence about the financial state of your business, but also more control over changes you can make to grow your income and business.
Tracking Monthly Income and Expenses
On the topic of numbers, tracking income and expenses should be a priority. Why? Because when you have those numbers you will be able to categorize your income by services, products and even clients, which can be a game changer for your marketing budget and efforts.
These numbers will give you a good idea of where your expenses are going, and help you set your rates, set your goals and increase your business, said Gael Wood, LMT, marketing coach and owner of Massage and Spa Success. With this information, you will also be able to plan your marketing budget more appropriately.
“You’ll be able to see what marketing is working, what marketing isn’t, and then you can take what works and build on that,” said Wood. Tracking expenses gives you valuable information about your services and ticket price, or the average amount a client spends on a visit, she added.
“One of the most eye-opening concepts I ever learned about in my business was the concept of the average ticket price,” said Wood. “How much does your average client spend over six months or a year, and how can you get those averages to increase. That may be encouraging your clients to rebook more frequently or upgrade when you have extra time. And be aware these smaller things are what adds up throughout the year to increase your income.”
By the Numbers: 6 Things You Need to Know About Business
1. First, Secure Your Permits. “You can be a fabulous, skilled therapist that’s providing top-notch results, but if you don’t know how to run your business, it’s not going to be successful,” said Melinda Hastings, BCTMB, MTI, a continuing education provider who owns Inspired Therapist Seminars.
Hastings suggests massage therapists first research the legalities of opening their business in their municipality before they invest in it—because it could be a heavy loss to find out afterward the city will not permit your office for a violation or other reason that is out of your control. Having this business know-how will help you navigate through the stages of business ownership, from permitting to licensing to profit and loss.
Once you’re permitted and ready to open, you’re ready to embark on the journey of advanced business education. That education might look like an accounting class at the local community college; a webinar series from an accountant; a bookkeeping course or other material related to finances.
2. Take a bookkeeping and accounting class. This way, you will learn the fundamentals of accounting. This will help you acquaint yourself with the terminology of business so you can have more fluent conversations and ask more detailed questions when you meet with your accountant and bookkeeper.
3. Outsource. Consider outsourcing once you have a foundational understanding of your business’ financials and your time could be better spent generating more income.
4. Keep track of your income and expenses. There are different software tools that will generate reports for you once the data has been entered. Research and find a tool that works for you and stick to a weekly, monthly and quarterly routine. One suggestion is to block out 30 minutes at the end of each week to enter your income and expenses. Then review it at the end of every month and quarter. If computers are not for you, get a notebook and use pencil and paper.
5. Talk to your accountant about paying yourself. Many business owners don’t pay themselves and this can cause mental stress and feelings of insecurity. Talk with your accountant about how to set yourself up on payroll and determine what is the appropriate amount. Paying yourself is an incentive for the hard work you are doing to build your business, even if the paychecks are small at first.
6. Charge what your time and services are worth. Massage therapists should stop trying to market themselves as the cheapest in town and instead build their authority as an expert in their unique style of massage and market their premium services to their ideal client.
Where Do You Stand Financially?
Knowing your numbers not only helps you manage your business better—it also helps you feel more secure about yourself and your business.
“Massage therapists are famous for not wanting to do numbers. We are ‘artists’ and we don’t want to deal with math—but the numbers really make a difference in how successful you feel,” said Amy Bradley Radford, a business coach, instructor and owner of PPS Seminars & Massage Business Methods.
Physical burnout is not the only kind massage therapists experience. Burnout from feeling unsuccessful is also a contributor to the turnover in the massage field, she explained.
To decide whether or not your business is successful, you need to know where you stand financially. You need to pay yourself, because if you don’t, you won’t know when to give yourself a raise when you reach your goal, said Radford.
When Wood opened her therapeutic massage center, she sat down with her accountant, who helped her figure out a way to pay herself a weekly salary. “That was so much nicer than, week-to-week, not knowing if I could pay myself and if so how much,” Wood said.
Not charging enough “is a huge problem in our industry that I see every single day,” said Hastings, who has put in practice her own business advice from her 10-week business mastery course and is booked a year in advance.
The mental and emotional shift that comes with taking ownership of your business’ finances is huge. “You feel more successful,” said Radford, “and therefore you feel more successful at the table and your clients feel more success in your hands.”
About the Author:
Aiyana Fraley, LMT, is a freelance writer and health care professional with more than 18 years of experience in the massage field. She teaches yoga and offers sessions in massage, Reiki, sound healing and essential oils. Her articles for massagemag.com include “This is How Mobile Massage Therapists Stay Safe, Secure and Sanitary” and “Will Massage in Nursing Homes be Changed Forever by COVID-19?”