My Own Experience
When I graduated from massage school and opened my own practice, I had
very little knowledge of running a successful business: I simply hired an accountant and
opened my doors. One of the first things my accountant told
me was to set aside 30 percent of my income in a separate account so I
could pay taxes, which took me aback but wasn't enough to undermine my determination.
Soon, I purchased medical insurance for myself, and set up a savings account
and retirement plan. I began to take care of expenses such as rent,
supplies, laundry, liability and disability insurance, as well as continuing education
costs. My savings account became an expense account, and I began
to realize my expectations of earning $70 per hour were a tad unrealistic. My
gross income looked wonderful, but my take-home pay was significantly
less. When my business started to grow, I made the decision to hire an employee
rather than cut back on the number of new clients I could see. Adding someone
else to the mix further complicated my finances.
I didn't fully understand how renting a larger space, increasing my liability insurance and paying payroll
taxes would financially affect my business. I quickly found myself with
extended lines of credit just to keep up with the bills.
Because I want to take care of my employees, I pay 100 percent of their
medical insurance costs and open a retirement account for each, matching
up to 3 percent of their contributions. Both of these benefits
are in addition to a base wage, pushing my payroll to 65 percent of my expenses—
a figure well beyond the 33 percent my accountant advises me to target.
There are other intangible benefits my employees enjoy. My clinic specializes in injury treatment,
so I spent countless hours building relationships with medical doctors in my area and
creating a strong referral program. Therapists working for me step into a busy schedule
and instant credibility, two things many people just starting out have to work hard to develop.
Although these things don't translate into cash in the massage therapist's pocket,
they do go a long way in helping them build a successful— and secure—future.
Often, business owners are envied their success and thought to have a lot of money in
the bank, when, in reality, they may be tightening their own purse strings and staring
at an empty bank account.
I often think how lovely it would be to just walk into the office, do my job and then go home, but,
as a business owner, I have to worry about taxes, billing, bookkeeping, payroll, as well as anything
else that needs my attention. Over the years, my clinic has evolved, and I know what my limits
are and what I can and cannot do for my employees. My practice is successful, and every once in
awhile I feel guilty about my success, until I remember all the risk I took, the trials and tribulation
I faced and overcame—and that $30,000 line of credit I finally paid off.
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American Massage Therapy Association®
