You have all it takes to put up a massage business – the passion, experience, and a concrete marketing plan. But there are other things that you have to be prepared for. It may not be as complicated as other kinds of business, but putting up a massage business is not a walk in the park either. Especially when you’re dealing with finances.
By now, you are most likely aware of the cost needed to start a massage business. Whether you are offering in-home therapy or putting up your own clinic in an upscale commercial area, calculating the costs to get your massage business up and running is probably one of the first few things you did.
But apart from the startup costs, you also have to consider the unexpected costs of operating your new business. By becoming aware of these unexpected expenses, you can plan ahead and find ways to overcome potential financial challenges and understand exactly what it takes to be successful in this endeavor.
Hope the following suggestions will help you navigate the challenging side of running your massage business.
Learn about the Most Commonly Overlooked Expenses
75% of massage therapy clinics are operated by practicing therapists. This means that practitioners have to perform two roles at the same time: become a therapist and a business owner. This is why it can be too easy to overlook certain business expenses especially once you start operating your massage therapy clinic. What are these expenses?
- Membership dues with networking organizations – participation in these groups keep you up to date with the latest news and trends about your practice which is necessary to grow your business. Most of these associations/organizations would require annual membership fees and it is important to include it in your operational budget.
- Permits and licenses – take note that payments you make to operate your massage business in your community are not one-time expenses. In most cases, permits and licenses have to be renewed annually.
- Marketing expenses – you may have a concrete marketing plan in place before you launched your therapy business. But what if it fails? Or what if circumstances changed and you have to change your marketing plan? It is important to set aside funds for your marketing. You never know when you will need to double your marketing efforts.
- Space upgrades and utilities – if you opt to have a massage clinic, a big portion of your operating expense is going to be allocated to the space rental fees. Depending on where you wish to put up your business, commercial space can cause you a few hundreds of dollars to over a thousand per month. However, the expenses do not stop there. Over time, you may need to improve your space. To make your therapy service more effective, your clinic should have a cozy and calming ambiance. You also have to keep it in top condition, which could mean replacing furniture and equipment once in a while.
- Insurance – insurance costs are often overlooked, especially by new businesses. Sometimes, practitioners even forget to purchase insurance to protect their business. Insurances may seem unimportant until you find yourself confronted with problems like property damage, equipment loss, disaster, etc.
- Staffing fees – as your business grows, you may need to hire one or two persons to cope with the growing demand of your clients. When creating a business plan and strategy, don’t forget to include staffing expenses.
Have an Emergency Fund
Much like a personal emergency fund, every business should have an emergency fund too. According to the U.S. Bureau of Labor Statistics, one-third of all businesses fail within the first two years while half will, within five years. And you what the reason? It’s because of cash flow issues.
There are so many reasons why your massage business requires an emergency fund. First (and most importantly), it helps you deal with critical times. While you may be insured against property damage, disaster, equipment repairs, and the like – it could take some time to process a claim from your insurance company. An emergency fund helps you to continue operating amidst disruptions.
It’s very likely that at one point or another, you will benefit from small business funding. And that’s okay. However, having an emergency fund keeps your business afloat while you wait for payments to be made. This prevents you from incurring unnecessary debts.
Lastly, having extra fund helps you capitalize on business opportunities as they arrive. You’ll never know when a big opportunity will come knocking on your door. For example, you might find an opportunity to purchase new equipment at rock bottom prices, branch out to a new location, or undergo more training to amp your massage therapy skills.
When creating a budget for your business, it is important to allocate funds for unexpected costs. For instance, you should anticipate having to restock your supplies. There will be months when you will have more clients than expected. This means you might need to increase your supplies. Your budget should be flexible to accommodate unforeseen expenses.
When creating a budget, don’t forget to include business taxes. If you’re not careful, business taxes can cost you a lot of stress and money. It is always best to pay in full amount when it’s due to avoid penalties and other legal consequences.
Keep Track of Your Expenses
When you are the therapist and at the same time, the business owner, tracking your monthly expenses can really be a daunting task. But no matter how tedious it may seem; it is actually one of the most important. From the very beginning, you should track all your business expenses and compare them to your monthly budget. This way, you will have a pretty accurate idea of how much cash buffer you need each month, and make necessary adjustments along the way.
Luckily, there are ways to simplify this process. One is the use of expense-tracking apps or software. You will find a lot of free platforms online which allow you to create a budget, track your expenses, and analyze your finances. Even an Excel data sheet can be very helpful. You just have to set it up so everything is computed automatically.
Watch out for Payment Delays
Payment delays happen all the time, especially in the health and wellness industry. Such delays could include clients forgetting to make a payment, payments posting at a later date than you expected, your bank holding a transaction for several days or weeks, etc. Payment delays can seriously hurt your finances by hindering your cash flow. For instance, you could miss a utility payment and incur penalties because of delayed payments. You also end up with an overdraft or late fees which could badly hurt your business credit rating.
Sometimes, the unexpected happens. To avoid payment delays, there are some things you can do. First, you can shorten payment terms with clients, be clear about your therapy cancellation policies, and start saving money as your slush fund to cover urgent, unexpected expenses.
Know Low-Cost Options
It is important to stay informed about ways to cut down on your business expenses. For example, for marketing your therapy business, instead of going for traditional approaches that are often too expensive, opt for less-costly alternatives that are nevertheless effective such as social media marketing.
Try to keep yourself updated with the latest tools and technology that can make your life easier as a therapist and business owner (and at the same time save you money). For instance, you might consider using a booking platform to streamline appointment requests and skipping the commercial space and providing in-home services instead to cut down the costs.
Okay. Owning a massage business is not easy. It takes so much more than pursuing your passion. It takes so much more than keeping your clients happy and satisfied. There are just so many things that you have to deal with, including your finances. It is important to set proper expectations about the time, money and energy you need to allocate in order to grow your business. Setting realistic goals, especially in terms of finances, should keep you focused on your goal without losing your sanity.
Every business deal with unexpected costs. No matter how smoothly things are going on at the moment, it is important to be prepared. At one point or another, you would have to deal with unanticipated expenses. Fortunately, there are things you can do to keep your business from being shaken. And it all starts in identifying the commonly overlooked expenses. Next, it is important to establish an emergency fund to stay financially fluid amidst challenges like delayed payments, disaster, or property loss or damage.
Furthermore, it is critical to plan ahead. Consider any possible scenario and create a plan to get through it. You should also aim to stay realistic with your budget and revenue goals, especially now that you are just starting your business.
By keeping all these tips and suggestions in mind, you will most likely overcome the challenges your business might face concerning unexpected costs.