Massage therapists, by nature, tend to be more concerned with feelings and ideas than with numbers and business plans. However, once you take on the role of business owner, you will end up wearing both hats: hard-nosed massage business owner and compassionate massage therapist.
Writing a business plan helps you, as a business owner, make the best decisions about how to expend your resources. It also gives you an opportunity to make sure that your personal and business goals are in sync.
If you are requesting financing from a bank or investor, a written business plan will let them know more about what your business does that is different from the others in the area. It is a tool to convince them that you will be able to repay any loans and/or help your investors realize a profit.
If you are not planning to borrow to start or expand your business, a business plan is still a great tool for you to set goals, analyze the market, and plan for each new step in your growth. A business plan is not necessarily a stagnant document to be used only at the startup of your business, but can and should be revisited regularly to check your progress and update your goals.
Key Considerations When Developing a Business Plan for Your Massage Business
There are six major areas that you should consider when writing a plan. For a small single person massage business, the entire plan may be one page or less. For a larger massage business or school, the overall plan will necessarily be longer and more complex.
Decide who will be your target clients
Decide who it is in your area that you want to serve. Look for a need in the area, or determine for yourself what type of client you want to spend your days with. If you are a massage practitioner, do you want to target children, pregnant women, cancer patients, or athletes? Or would you be happier having an upscale spa that targets tourists that are looking for relaxation and pampering?
If you are starting a massage school, do you want to attract students just out of high school, or would you prefer your students to be older adults working on a second career? Do you want to target students that lean toward more medical massage, spa massage, or Eastern methods such as Shiatsu and Thai Massage?
Develop a Mission Statement
A mission statement is a short, concise, and positive explanation of why you are in business, who you serve, and what image you want to convey. Rather than “We want to make all of our clients happy.” or “We want to train great massage therapists.”, your mission statement should be very specific.
You may want to help cancer patients reduce their use of pain medication so they can live more active lives. You may want to train highly professional therapists who can incorporate a variety of modalities in their work.
As a school owner, are you training students to work for a corporation, a medical facility or for themselves? In the case of a school owner, your target is twofold: you have to recruit students and you have to produce graduates that can be recruited by employers.
Set Objectives, Strategies and Scenarios
List several goals or objectives that will help your company reach its target audience and help accomplish your mission. Then develop strategies, steps you can take to reach those goals. Finally, do some worst-case scenario planning. Determine how you would react and cope if there was a problem that impacted your business.
For instance, if you are starting a school and want to attract graduating high school students (goal), you may decide to contact the local school and ask about a career fair (strategy). If there is no such event, what would your next step be (scenario)?
Limit your list to a reasonable number of objectives and strategies. You don’t need this to be all-encompassing. Use it as a planning tool to give yourself some steps to take to move your business in the right direction.
Do Your Financial Projections
The financial projections are generally some sort of income/expense or profit/loss statement. In this, you need to list every type of income you expect to generate, as well as every type of expenditure you expect to pay out. If you have been in business for a while, include your data from the previous few years and then project out a few years. If you have not been in business yet, provide some information about your personal income-generating activities before starting this business to show your ability to make accomplish goals.
Some income-generating categories for a massage therapist would be income from massage clients, retail sales, and perhaps leasing out extra space in your facility. For schools, income could be generated from tuition, fees, student clinicals, continuing education programs, retail sales, and leasing out unused space.
Common expenses include marketing, rent, utilities, insurance, accountants, taxes, employees salaries and benefits, furniture, equipment, and supplies. The IRS has published a list of allowable business expenses which might aid in making sure that you are including everything. If you are not comfortable with doing these projections, an accountant or bookkeeper might be needed to help you get a complete accounting.
Come Up With a Funding Plan
Decide how much money you need to obtain from outside sources and how much you are going to contribute from your own funds. Are you going to borrow from a bank or an individual, find people to invest in your company for a percentage of the profits in return, or do you have another fund raising plan?
Develop a Marketing Plan for Your Massage Business
With your mission statement in hand, analyze the market and determine whether there are an adequate number of people who meet your target market criteria. Who is your competition? You need to show that your business has a good chance at success with the parameters you have set. After that, you can determine what methods you will use to reach your target market.
That can include social media, brochures, television or radio advertising, networking, etc. Choose the methods that are most likely to reach your target audience. If you are wanting to do geriatric massage, social media may not be the best use of your advertising dollars.
On the other hand, if you are targeting pregnant women, networking with gynecologists or maternity clothes stores may be fruitful.
Structuring Your Massage Business
In the United States, there are six types of business structures you can use. There are three or four that are commonly used in the massage industry.
A sole proprietorship, which many massage therapists use, is essentially where you and the business are one and the same. It is the simplest form of business structure, but puts your personal assets at risk.
A partnership can be used when two or more people share the ownership. If you and one or more other person share the risks and responsibilities of the business, you can form a partnership. This generally requires a written agreement, as well as getting an IRS tax ID number for the business.
A limited liability company, or LLC, limits the liability of the partners in the firm. There are also S Corporations and C Corporations which are independent legal entities owned by shareholders. In a corporation, the business, not the shareholders, has the legal liability for the company’s actions. A corporation also has a more complex legal structure, and more rules and regulations governing it. You most likely do not need to be incorporated unless you have a large business with multiple employees.
In general, if you are a sole practitioner with no employees, you can establish a massage business as a sole proprietor and just use your social security number as your business identification. However, if you have significant assets to protect, want to share ownership with another person, or have a number of employees, you are more likely to want to establish an LLC to limit your financial exposure.
If you are opening a massage school as a business, you are likely to want to have an LLC if you are a small single-owner school. Multi-campus schools and schools with a large number of students and employees may want to incorporate.
The Small Business Association has information on choosing the right business structure. You may also want to discuss your options with an attorney.
If you are opening a massage-related business, your business plan is a tool to help the you determine your target market and mission, project future profits, plan your marketing, as well as obtain financing from a bank or investors. The time invested in developing a business plan will help you point your business in the direction you want to go.
You can find a great deal of information on making a business plan online and in books. The two largest massage-related associations, ABMP and AMTA, both have publications on their website to help massage therapists write business plans. In addition, the Small Business Association has free help for new business owner.