Massage Therapy: Principles and Practice, 3 rd ed.

Susan G. Salvo, BEd, LMT, NTS, CI, NCTMB

Co-owner, Co-director, and Instructor,Louisiana Institute of Massage Therapy

Lake Charles, Louisiana

Massage Therapy:Principles and Practice, 3rd ed.

Copyright © 2008 by Saunders, an imprint of Elsevier Inc.All rights reserved.

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Chapter 29The Business of Massage

__________________________________________________________________________________________

Susan G. Salvo


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Introduction

• What does a career in massage therapy mean to you?– Financial reward, flexible hours, being own

boss– Personal recognition and travel opportunities– Personal fulfillment of helping others– Retirement career, more free time


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Introduction

• Massage therapy continues to be effective treatment for:– Fibromyalgia– Back pain– Headaches

• But giving great massage is rarely the cause of failed massage therapy business


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Lesson 29.1 Objectives

• Identify your primary values

• Write a vision and a mission statement

• Choose a business entity that is appropriate for your future business vision

• Outline all pertinent licenses and permits required by law to operate a massage business


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• List all types of insurance required by law to operate a massage business

• Determine initial costs for beginning your massage career


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Business Planningand Development

• Will you work for someone or be self-employed?

• Majority of massage therapists eventually become self-employed

• Having a vision statement, mission statement, and business plan will keep you focused


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What Do You Value?

• Massage practice will reflect your character and personality

• Values sometimes difficult to identify

• Activities you enjoy can help identify your values


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Vision Statement

• Must consciously design vision for your business, including:– Profit/loss, décor, services offered– Clientele and referral base– Your own level of satisfaction


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Mission Statement

• States purpose, defines your type of business, and expresses objective

• Keep it short: should be able to recite by memory

• Focus should be on meeting needs of others while not conflicting with your own

• Must be totally compatible with your most important values


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Business Evaluationand Planning

• No single “right way” to construct successful business

• Your plan should fit who you are

• Should represent your business parameters

• Should help you understand what areas need attention


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Choice of Business Entity:Proprietorship

• Also called sole proprietorship

• Single owner; simplest and least expensive to open

• No distinction between business and owner


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Choice of Business Entity:Proprietorship

• Advantages:– Easy to start; you own, control business– Profit and loss reported on Schedule C

• Disadvantages:– You are personally liable– Loans or credit depend on your personal

credit history and net worth


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Choice of Business Entity:Limited Liability Company (LLC)• Business treated as corporation for tax

purposes

• Can be owned by individual or partners

• Liability generally limited to company’s equity

• But banks, landlords may still require personal guarantee for obligations


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Choice of Business Entity:Limited Liability Company (LLC)• Advantages:

– Easy to start– LLC can be either proprietorship or

partnership

• Disadvantages– Possible requirement for personal guarantee

to creditors– Each member must file separate tax return


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Choice of Business Entity:Limited Liability Company (LLC)• What you will need to do:

– Contact an attorney to help set up LLC– Obtain occupational license from city and/or

county– If LLC has more than one member, acquire

federal and state employee identification numbers

– Acquire liability insurance


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Choice of Business Entity:Partnerships

• Similar to domestic partnerships: both parties share responsibilities and rewards

• Each partner files 1040; also profit / loss on Form 1065

• Investment expense usually shared


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Choice of Business Entity:Partnerships

• Advantages:– Easy to start– Startup costs divided between two or more

people– Provides broader base of skills / interests

• Disadvantages:– Decision-making must be shared with

partners


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Choice of Business Entity:Corporations

• Two types:– “S” income or loss goes to shareholders– “C” pays federal tax on its taxable income


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• Advantages:– You are not liable to third parties– Assets cannot be used in lawsuits– Practice can continue after owner leaves or

dies– Corporate structure is attractive to a variety of

financial resources


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• Disadvantages:– Corporations are most legally complicated

entity and require assistance of attorneys– “C” corporations pay taxes separately from its

shareholders


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• What you will need to do:– Hire an attorney to help with articles of

incorporation– Obtain occupational license– Acquire federal and state employee tax

identification numbers– Acquire liability insurance


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Licenses, Permits, Registrations

• State’s attorney or secretary of state may have massage licensing board

• Be sure you read licensing requirements– Do you have proper education?– Do you need to complete an internship?

• Obtain a copy of state’s massage therapy laws (may be available on Internet)


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Licenses, Permits, Registrations

• Do not practice massage therapy until all licenses and permits are in place:– Provisional License may be granted before

permanent license is issued– State License after passing state examination– Occupational License, required by many

cities, even if home-based• Also called a business license


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Insurance Needs

• Insurance needs vary from person to person; learn which types are required:– Professional liability or malpractice– General or premise liability– Business personal property– Automobile, health, disability, and life

insurance for medical and survivor expenses


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Determining Startup Costs

• Costs will vary depending on region and individuals

• Costs may include– Opening business checking account– Buying equipment and furnishings– Office rent, telephone deposit– Massage supplies (linens, massage

lubricants)– Advertising, promotion, and printing


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• Design a business logo, letterhead, business card, brochure, and web site

• Write three sample business advertisements

• Use proper telephone etiquette for business-related calls


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• Describe various promotional activities such as advertising

• Create a curriculum vitae

• Compare and contrast contracts and proposals

• List ways of using business resources


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Marketing

• Involves promoting your business with image, purpose, and direction

• Competition should be considered when developing marketing plan


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Advertising

• Advertising can bring attention to your business through these media outlets:– Yellow pages, newspaper ads, newsletters– Radio or TV commercials, direct mailings– Internet Web sites


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Choosing the Right Advertising

• Considerations:– How much will the advertising cost?– Who is the target audience?– What is the circulation?– When will it be released?


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Business Cards

• Should provide favorable image and your company’s logo

• Include basic contact information

• Should be clear and easy to read

• Can use as appointment reminder cards


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Brochures and Web Sites

• Brochures– Purpose is to explain your business to

prospective clients– Can include prices and menu of services,

even brief biography of you

• Internet web sites– Can be inexpensive way to reach many

clients


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Telephone Etiquette

• Important to manage incoming calls and telephone communication– General telephone standards– Placing a call– Answering a call– Putting a caller on hold– Taking messages– Massage inquiries by telephone


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Curriculum Vitae (CV)or Resume

• An autobiographical sketch documenting occupational, educational, and personal achievements

• Even if self-employed, can help in developing business relationships

• Demonstrates what you can offer employers, clients, or patients

• Most popular format is reverse chronological


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Curriculum Vitae (CV)or Resume

• Name, address, telephone number, and email address

• Education

• Work experience

• Personal data


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Contracts and Proposals

• A contract:– States an agreement between two or more

parties– Is enforceable by law– Outlines and details ideas– Helps avoid communication problems


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Contracts and Proposals

• A proposal:– Suggests an idea for consideration – Might be used to offer massage therapy

services to a business or group– Should include cover letter, objective,

logistics, qualifications, funding, and summary


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Elements of Proposals

• Cover letter

• Objective

• Logistics

• Qualifications

• Funding

• Summary


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Publicity

• Defined as free media exposure

• Many ways to get publicity– Write columns for local paper or magazine– Give talks, speeches, or lectures– Participate in community service or volunteer


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Press Releases

• Submitted to newspapers as good way to keep public informed about you

• Can announce workshops you attend, lectures given, offices you hold

• Place important information first

• Use simple language and proper formatting


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Building a Support Network

• Preceptor: someone who guides you during your postraduate clinical practice; similar to a mentor

• Preceptor could be established massage therapist willing to help and advise you

• Business coach might be non–massage business person sharing expertise

• Network by joining local chamber of commerce or other civic or social group


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Building a Support Network

• Use established business resources– Public or college library– Small Business Administration (SBA)– Service Corps of Retired Executives (SCORE)– Professional massage therapy organizations


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• Describe a typical day for a massage therapist

• Discuss insurance reimbursement for massage therapy

• Identify taxes you are responsible for paying and tax deductions


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• Compare and contrast an employee versus an independent contractor

• Create a plan for avoiding burnout

• Devise a plan for building a cash reserve and investing toward retirement using securities and retirement accounts


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Massage Therapist’s Day

• Five sections of the day– Before the client arrives– When the client arrives– Before the massage session– During the massage session– After the massage session


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Before the Client Arrives

• Take care of phone calls

• Review day’s schedule

• Pull and review client intake forms for that day

• Get literature and intake forms ready for new clients

• Check equipment for safety and security

• Dress treatment table and ready room


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When the Client Arrives

• Greet client• Escort client to area for massage

consultation• Have client fill out or update intake form• Perform any treatment related

assessments• Allow client to choose music and lubricant• Instruct client on disrobing and positioning

on table before exiting the room


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Personal Item Storage


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Before the Massage Session

• Wash and dry hands and forearms

• Rub hands together to warm them

• Ground and center yourself

• Move and stretch your body while deep breathing


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Stretching Prior to Massage


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During the Massage Session

• Enter the room and address the client’s care and comfort needs

• Use bolsters and pillows as needed

• Remind client to offer feedback

• Make physical contact with the client

• Proceed with massage

• Remain aware of client’s comfort and adjust massage accordingly


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Physical Contact


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Awareness of Discomfort


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After the Massage Session

• Exit the room and allow client to dress

• Wash hands and write case notes

• Breathe deeply; greet client with smile

• Provide appropriate information sheets

• Assist client with jewelry and shoes as needed

• Encourage hydration

• Collect fees and reschedule client


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How to Stay in Business

• What are long-term strategies for staying in business?

• How can I diversify my income?

• What should I know about taxes and other financial matters?


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Diversifying Your Income

• Diversification helps minimize effects of natural fluctuations of business markets

• Ideas to diversify income:– Retail sales of massage-related products– Expanded services to offer variety of options– Specialized training– Working in more than one location


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Insurance Billing and Reimbursement

• One way to expand practice• Doctors now refer patients to massage

therapists• HMOs and PPOs only cover services

provided by therapists on approved lists• Medicare and Medicaid do not cover

massage in most states• Medical codes needed to file claims• Use references to find codes


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Insurance Billing and Reimbursement

• CPT codes for massage therapy are classified as physical medicine

• HCFA 1500 form is standardized form for submitting claims

• Most states require daily charting and evaluation of treatment plans

• Do not release charts unless patient gives permission


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Prioritizing Insurance Claims

• Never compromise your cash flow– Cash-paying clients should be priority

• Avoid cases that involve attorneys– Process of getting paid may be slow– “Lost” cases may result in no payment – Request 50% of payment up front– Consider hiring medical billing company


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Accounting

• Interpreting, measuring and describing economic activity

• Good way to begin is to open business checking account

• Pay expenses with checks; they serve as receipt

• Establish a petty cash account for small incidental expenses


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Accounting

• Accountants and bookkeepers:– Can help with record keeping– Can help save money and evaluate taxes– Might recommend software package to help

with accounting needs


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Accounting:Cash Flow

• Record all money received from clients and other sources

• Two methods– Cash-based – Accrual-based


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Accounting:Inventory and Purchases

• Document purchase of all supplies

• Record purchases intended for retail sales

• Record sales of retail items

• Inventory is unsold retail items on hand


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Accounting:Payroll and Assets

• Payroll– Keep track of federal wages, taxes, and

Social Security taxes

• Assets– Record purchases of equipment, machines,

furniture, computers, and business-related property

– These will be depreciated at tax time– Depreciation is spreading out the cost of a

deduction over a period of time


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Accounting:Financial Reports

• Three key reports will help you track business and financial trends– Cash flow statements provide overview– Profit and loss statements state income and

revenue over a fixed time period– Balance sheets summarize all assets and

liabilities

• Equity (net worth) is difference between total assets and liabilities


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Accounting:Financial Reports

• Assets: Things that offer value to the company; two types– Current assets: cash on hand and in

accounts, accounts receivable (money owed to you or your business), inventory

– Fixed assets: machines, equipment, furniture

• Liabilities: What the company owes; two types– Current liabilities: accounts payable, unpaid

taxes, salaries, wages, commissions– Long-term liabilities: business loan payments


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Taxes

• Gross income is amount of money earned before deductions

• Net income is what is left after taxes

• Taxes might include– Sales tax– Income tax– Self-employment tax


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More on Taxes

• Keep all business receipts, income tax returns, other tax documents for 7 years

• Consult with your accountant to help with decisions relating to taxes


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Tax Deductions

• Examples of tax deductions you may qualify for:– Accounting and bookkeeping fees– Advertising and promotion– Continuing ed / professional development– Office supplies (including lubricants)– Printing and duplication– Rent, utilities, and phone


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Employees and Independent Contractors

• Might consider hiring other massage therapists if you have too much business

• Both hiring employee and using independent contractors have legal and tax consequences


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Employees and Independent Contractors

• If you hire an employee:– You set hours of employee– You provide employees with tools and

equipment– Employment may be for indefinite time

• Independent contractors are not employees– They work for a fee based on completion of a

task– May provide their own tools and equipment


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Insufficient Funds Checks

• If you receive an insufficient funds check:– Call client and politely explain situation– Ask for certified check or cash– Collect insufficient funds fees– Be pleasant, patient, and understanding


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Burnout

• Definition of burnout: the condition of being tired or unhappy with one’s work

• Affects people in all professions

• Some therapists may have problems setting limits

• Some therapists may become overworked


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Managing Burnout

• Nurture yourself by eating right, getting enough rest, exercising

• Schedule some time away from work on a daily and weekly basis

• Book time off for yourself every day for lunch or other break

• Stimulate your own interests with classes and workshops

• Relax; get massages yourself


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Building a Cash Reserve

• Your cash flow will fluctuate day to day

• Important to build cash reserve

• Once per month, pay yourself 10% of your gross– Put this money into an interest-bearing

account– Save enough to pay 1–6 months of living

expenses


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Investing in Your Future

• When cash reserve is in place, continue investing 10% of gross for your future

• Invest for the long term to weather ups and downs in economy

• Invest systematically– Over time, average cost of investments will be

lower than average cost of stock or fund– This is called dollar cost averaging


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Securities• Securities: vehicles to invest money in to

optimize return– Types include stocks, bonds, and funds– Stocks pay dividends (part of company’s

earnings that are periodically distributed)– Bonds are like loans; most generate interest – Mutual funds pool money from its

shareholders and invest in various securities– Financial portfolio: various investments held

by an individual investor


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Retirement Accounts

• Contributions to retirement accounts are treated like tax deduction on tax returns

• Individual Retirement Account (IRA)

• Simplified Employee Pension Plan (SEPP)

• Savings Incentive Match Plan for Employees (SIMPLE)

• Annuities


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Business Plan

• Introduction

• Personal information

• General description of business

• Operating procedures

• Management and personnel


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Business Plan

• Insurance needs

• Marketing and competition

• Advertising, promotion, and location

• Financial projections

• Supporting documents


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Summary

• Basic business consists of three phases:– Preparatory work– Business operation– Long-term strategies

• Business growth depends on relations with the public, both individually and collectively

• True business success is long-term

Massage Therapy: Principles and Practice, 3 rd ed.

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Transcript of Massage Therapy: Principles and Practice, 3 rd ed.