Spring into Strategic Saving

5 Questions for Financial Improvement

By Allissa Haines
[Blueprint for Success]

Ahh, spring. Here, in New England, it arrives with daffodils popping up cautiously and then getting punched back down by an early April snowstorm. For years, I felt like spring was a metaphor for my massage business. I would get through the steady winter months feeling hearty and strong, then April and May would bury me with the previous year’s taxes, first quarter taxes, three license renewals (thanks, May birthday!), and professional membership renewal. Oh, and then second quarter taxes due in June.
It took me too many years to notice the pattern. When I did, it took me a few more years to make a real change in my habits from June through February to prepare for the inevitable (and entirely predictable) avalanche of expenses each spring.
What helped me finally get it together? Ultimately, some selfishness mixed with a little business fatigue. I wanted to make the next spring easier. I wanted to do a favor for my future self.
So, I conducted a completely unscientific examination of my savings and planning routine. It wasn’t particularly structured, but I nailed down the worst parts of the problem and came up with a few small fixes to move forward. The next year was slightly less difficult, so I made a few more improvements to my routine.
This continues every year, and I start by asking myself a few questions. I’ve found the following to be helpful to other business owners too.

1. Did I Save Enough to Cover My Taxes?

For many business owners, the worst part about tax time is that we haven’t saved enough cash to cover the tax bill and we’re scrambling to get that money together. (Anyone ever raid their gift certificate savings account to pay taxes? Me too.) We may end up paying late or setting up a payment plan with the IRS. That’s just stressful.
The solution seems clear: transfer a percentage of your income into a separate savings account, so it’s there when you need to make quarterly and year-end payments. But that’s tough to do when you’re a small business with a very tight budget, and especially tough if you’re still paying off previous years’ tax debt.
Remember that something is better than nothing. Get started, even if it’s just a little. Set a weekly reminder to transfer a certain percentage—whatever you can manage—to a connected savings account. If you are easily tempted to spend versus save, online banking makes it easy to transfer funds, so you could even do this daily, whenever you make a deposit or when credit card sales are deposited into your account. Getting that cash out of your checking account and into a harder-to-reach savings account is key.

2. How Was the Whole Tax Prep Process This Year?

If you were a mess of receipts and confusing reports, make a few adjustments to improve that. Take half a day to set up a system of filing paper receipts, or go paperless with an online tool like Google Drive or Evernote and get caught up on the first part of 2018.
Once you’re set up, it only takes a few minutes a week to get all your receipts in order and log your expenses. Make it part of a regular routine to pay bills and file receipts. If you struggle with routine, be sure to schedule the task in your calendar, and reward yourself with something fun when it’s done. (I usually choose a fancy coffee and a few minutes to sip it at a park near my office.)
If you need accountability, make a mid-year appointment with your tax preparer so you’ve got a nudge to stay ahead of things. Knowing that I need to report back to someone usually keeps me on track.

3. What Were My Biggest Expenses?

I like to look at where my money went and see if I can make any changes to lower expenses. It pays to get creative here. Think about your internal expenses and also the external services that support your massage business. Maybe you can make a small schedule change and lower child-care expenses. If you’ve become busier and are using more linens, maybe you can negotiate a better volume discount with your laundry service.
Sometimes lowering expenses is as easy as adjusting a phone contract. Sometimes it’s a more intricate plan for sharing your massage room. Either way, it’s a good idea to reexamine these numbers and consider your options at least once a year.

4. What Were My Biggest Income Generators?

Look at your schedule and determine which treatments or retail products are the most popular. Are you making enough money with them, or are you due for a rate increase?
Conversely, look at the treatments or retail products that are not selling. It could simplify your business to remove them altogether, giving you more time and energy to focus on the bigger income generators.

5. Am I Happy?

This seems obvious, but often we are so wrapped up in the day-to-day tasks of running a business that we don’t take time to reflect. That’s how burnout creeps up. If you are not making enough money, not making enough time for your personal life, or just plain tired all the time, it’s time to regroup.
Think about what changes you want to make, and ask yourself the previous questions again with that in mind.

No Matter What, Start Where You Are

We are here in this moment. Your business is what it is. And only the decisions in front of you are going to move you forward.
Look back for just long enough to identify the issues and create a plan for change. No need to wallow or beat yourself up. Make whatever improvements you can manage, and when you’ve got them into your routine, maybe make a few more.  

Allissa Haines runs a massage practice and collaborative wellness center in Massachusetts. She partners with Michael Reynolds to create business and marketing resources for massage therapists like you at www.massagebusinessblueprint.com.