As a self-employed massage therapist, you have the flexibility to decide who you will work with. This includes the choice of relationships with individuals who partner with you in your massage business.
This could be starting the massage practice together or buying into an already existing business.
Chances are that if you choose to do this, you will likely be doing so with an individual you know. However, you should not assume that everything will be smooth sailing because you know your potential business partner. Partnerships, like marriages, can run into trouble, especially if you pick the wrong partner.
Start a Massage Business: First Steps
There are several ways you can ensure you are on track to success as far as business partnerships go. I find that starting with the rules of thumb below can assist with finding the right partner/s for your massage business.
Shared values: You and your partner need to share the same core values and goals if you hope to make a success out of your joint business endeavors. Nothing will derail your massage business faster than two owners pulling the business in different directions because they have opposing goals and visions.
Skills that are complementary and not antagonistic: One can really harness what makes a partnership/team great (Together Everyone Achieves More) when skill sets are matched and complementary. Once a partnership is formed, you become a team. When you and your partner have different strengths, you can multiply the results of your efforts.
Having a track record: Regarding skill sets, it helps if the parties involved have a track record that they can fall back on when challenges are invariably encountered. A track record of working together in the past would be of additional benefit, mostly if those work experiences involved working successfully through challenges.
Roles and responsibilities: Once you have identified potential partner/s, you will want to define the roles and responsibilities of each of the individuals involved in as much detail as possible. These roles can always change and evolve as the massage business grows, but having these defined at the outset will minimize stress and strain. It is essential to understand each partner’s roles and responsibilities so no one is stepping on each other’s toes. This helps balance the partnership. It also allows employees (if any) to have clarity on who handles a particular aspect of the business. If you are joining an already established massage practice, it is still essential that you understand all the other owners’ roles and where your roles and responsibilities fit inside the massage practice.
Be honest with your potential partners: This is not the time to soft-pedal your real feelings hoping that you do not hurt your potential partners’ feelings. If a partnership is to have a chance of working, all the parties involved should be comfortable airing their opinions. Good communication is essential. This will be a crucial step in ironing out any differences or disagreements should they arise. This is where having had a working relationship in the past with your potential partner may be of benefit.
Start a Massage Business: Next Steps
Putting your agreement in writing: Whether you have known the person since you were in kindergarten or this is a family member, you will want to have the partnership’s particulars in writing. You will need to detail the business structure (partnership vs. limited liability partnership, etc.), the contribution of capital, and, most notably, the process of resolving conflicts and disagreements. Thinking of all the worst-case scenarios of the partnership, having a plan to deal with them and putting it on paper will make dealing with any difficulties that arise much more manageable.
The agreement can also be used as an initial proposal, especially if you join an already established massage practice. Whether you are writing out the contract or are the recipient of the request, you will want to evaluate anything or all things that may go right or wrong.
Identify your stake or equity in the partnership: You need to ask the following questions:
• What are the voting rights and controls accorded to you and the other partners?
• What is each partner’s capital contribution (if this is a new venture) or buy-in if you join an existing massage practice?
• Can your buy-in payment be spread out over a sufficient time? Spreading out payments will help cover overhead and expenses, which will likely be expected as part of your business partnership.
Before accepting any offers or entering a formal partnership, you will want to conduct your due diligence, as you are not only investing your money but also your time and expertise. You do not want to enter this venture without following your gut and your own investigation.
During this process, you will want to consider using the expertise of the following individuals:
Business Attorney: You need legal advice to understand your partnership rights and to develop the business structure, in addition to assisting with creating the partnership agreement. The paperwork should also include the equity and partnership percentage and the closure of the massage business. If one partner wants to leave the massage business, does the business close, or can the remaining partner/s buy out the partner who wants to end the partnership? The partnership agreement should include the process of dissolving the partnership.
Accountant: If you are joining an already existing massage business, using an accountant will help you better understand the business finances. You should review all the financial statements and tax returns of the potential massage business you are about to join. You want to understand the assets, liabilities, equity and past economic trends of the business. It is prevalent to ask for the last two to four years of financial statements. Your accountant will be looking for unusual balances and financial trends. (New ventures will not have some of these documents; however, it is still wise to sit with an accountant to review your financial plans.)
About the Author:
Lozelle Mathai, MBA, CFEI is a financial accountant with over 18 years of experience in the field of financial management and accounting. She is the owner of The Body of Accounting, a division of Closing Your Books LLC. The Body of Accounting is an accounting consultancy firm that educates massage and bodywork business owners on how to manage, maintain and understand their business finances. Her articles for this publication include “Can I Afford to Buy That? Here’s How to Finance a CE Class, New Table or Equipment.”