What an exhilarating time to be practicing complementary healthcare. More than ever, clients are exploring complementary and alternative medicine (CAM) to help them achieve a state of balanced health and a life of greater well-being. Physicians are referring patients to CAM practitioners and trend reports tell us that one of the best businesses to start is an alternative health center or day spa.

Massage therapy is a hot career these days. Consumers receive approximately 230 million massage sessions annually, making massage therapy an $11 billion to $15 billion industry.¹ But before you go counting your newfound wealth, know that not all this dough is trickling down to massage therapists, many of whom are still hustling for clients one by one in their little office and not making much of a salary for being therapists, clerks, and advertisers rolled into one. There are approximately three times the number of massage therapists than there were 10 years ago. That’s good, in terms of visibility, but it adds a lot of competition. How many of the people who went to massage school with you are making a living with massage today?

Even though it looks attractive (you keep the entire fee), the sole practitioner model of business is just about the least efficient way to generate, to which a savvy observer might inquire, why? For some, healing is truly a mission. Are there easier ways to make a buck? Well, if you want to make a federal case out of it, yeah.

Clearly, many bodyworkers are making progress. And kudos to them. But, this rising tide isn’t lifting all boats. So, how to float your own boat? Not yet obvious? Open a clinic with more therapists and services, thank you very much, and profit from your investment, not your labor.

Putting Your Therapists in One Basket

Wellness centers offer one-stop shopping for holistic healing services. Until very recently, when some business entrepreneurs have stepped in, they were almost always owned and operated by credentialed health practitioners. Having an assortment of practitioners operating together in the same clinic offers better coverage of the schedule, convenient referrals to colleagues under the same roof, the chance for a team approach to the case using the combined brain trust, and a healing atmosphere for the patient.

This cadre of highly trained specialists will practice at a common office site, probably rubbing elbows all day long. The credibility of the group practice depends on the reputation of each of its practitioners, so the competencies of every practitioner involved must be ready to stand the test of time.

Increasingly, such clinics are being established as a commercial enterprise by people with a business background. This sign of the times has its advantages and disadvantages. You may be a skilled entrepreneur, but your trade skill in this healing field allows your customers to sense authenticity, consistency, and hands-on knowledge. A “manager from a distance” may not resonate with this clientele.

You Dream It, They Will Come

Anyone who tells you that starting a clinic is easy is either lying or lying. We’re all too familiar with the concept of health and business as a double-edged sword. Many small business people work long, hard, albeit flexible, hours. The buck stops with you. A pipe bursts in the middle of the night. Who gets out of bed? You guessed it.

For the record, this is not everyone’s game. Some are better suited to working for someone else and going home at night to relax. Not only is the clinic, in fact, a business, it is also a complex balance of commercial organization and fulfilling higher expectations with higher standards.

A holistic clinic can do quite well financially, but—bottom line—do not open the center with the vague idea that you want to make a lot of money. You’ll be a businessperson. Those who stick it out are those with integrity and sincerity and an affinity for healing and helping others, while managing the needs of a variety of people including, last but not least, your own. Think of it as a koan of sorts, the sort of adventure that knocks you on the head with its serenely ridiculous fulfillment.

A whole lot of people are just so done with the “find a bug, use a drug” style of modern medicine. Your patients are eager, though, to discover empowerment and a bond of community spirit. Your group practice can be this heart connection for them—a safety zone where people from all layers of society can relax and find support.

The Natural Marketing Institute has identified one of the key trends having a significant impact in 2007 and beyond: “The Age of the Individual” is a major trend in reaction to mass marketing and a declining trust in traditional authorities, driving a culture of consumer-generated demands, products, and services that are “made just for me.” That’s where customized holistic clinics excel.

Envisioning Personal Goals for the Clinic

What do you mean by success? Is it serving the health needs of your clientele? How about making financial return, job security, or flexible scheduling? It’s important to create a good definition for yourself, because it will color all your other decisions.

How much profit is appropriate? If you don’t make additional profit as the owner of the business, after paying yourself a market rate salary (the compensation you would have to pay someone else to do your job), you don’t have a viable business.

Working for an hourly wage, no matter how high, is limited. To make money, you need profit, which you will make from others’ efforts.

Go Team

What’s your attitude about herbs, homeopathy, hydrotherapy, or even hypnosis? Which therapies will you want to work into the selection of your clinic?

You need some guidelines before you assemble your team. You may want to decide on therapies to offer and then match practitioners to the clinic menu. Or you may want to create a good mix of colleagues and be less concerned about what, specifically, each one does in the treatment room.

Discreetly begin to talk to other CAM practitioners about who would like to become part of a multi-disciplinary clinic and carefully sniff out their reputations with other colleagues. Many successful group practices have only massage therapists, or dermatologists, for example.

Your relationships with others in your organization are seriously important. There’s nothing quite so miserable as wrangling a crew of egotistical therapists. For your staff, you provide inspiration, creativity, tolerance, and tireless optimism, especially in the early months. You, the founder, the motivational powerhouse, set the pace.

What philosophies do you want to represent? Would you allow a questionable therapy on the marquee if you really, really liked the therapist? (“Maybe if they brought in an avalanche of cash,” your inner Bill Gates pipes up.)   

Will you offer classes? How about a holistic learning center with adult education sessions? Spa facilities, hair salon, gym, juice bar, child care? Overnight accommodations? These all sound plausible, and all have worked somewhere, sometime.

So, what else can you do to increase profit without working harder? Of course, the more rooms you rent, the more income you make. Yet there are other services that do not involve selling therapy by the hour. Let your investment create return.

You can rent a large classroom, especially in off hours, for extra income. One common guideline is that your floor space should be occupied at least 70 percent of the time your premises are operating.

If you include innovative equipment, you may be able to add income without involving much of your own hands-on time. Sauna, steam cabinet, infrared, heat treatments—all make money just be being turned on.

Your center should be the Swiss Army knife of clinics—always just the right tool for the job. The financial goal is to seek ways one can, say, put in half the effort and get three-quarters of the desired result.

A Plan to Create a Plan

Start by arranging preliminary consultations with professional advisors, which should include, at the least, your attorney and accountant. Interview several to find a good fit.

Start your business plan yesterday. Staring some big numbers in the face has a way of encouraging realism, so get a rough draft on paper. Use modern software and update your plan each quarter. Take classes. Read books. Investors need this plan to make sense about what they will be investing in.

Start with a formal six-month action plan and a longer two-year version. If you’re at all typical, when two years roll around, your business won’t look at all like your plan, but you will be ready to roll with the punches.

Money, Money, Money

You will need money to capitalize your venture. Unless you have ample cash in the bank, or a rich aunt, be prepared to apply for a loan, for which you will have to give a personal guarantee (also known as your house equity, my friend).

Whatever you estimate to be your financial needs to start the business, multiply it by 10. You can always pay it back if you don’t need it, but it’s always better to have more money than less. As a reserve fund, you’ll need enough money put away to sustain you for six to 12 months. Start with more than you think you will ever need.

If you create a clinic from scratch, you’ll need to purchase equipment, hire staff, and fund marketing efforts. You can start small and expand it slowly and make it your baby. Otherwise, consider purchasing an existing center. The client base is already established, and all the details have been worked out. This looks better to a bank than a startup, too.

In a pinch, plenty of successful people started a business with funds from their credit cards, bank automatic credit line, second mortgage revolving charge accounts (for furniture and supplies), or by cashing in your life insurance.

Once your new money generators are ensconced in their new offices, how do you get money out of them? You can lease spaces to a variety of qualified practitioners and collect rent based on the time they use of their space, say $100 per month for use of the room all day every Monday. This rotating shift use of the same treatment room provides less risk for you, as the room rent is spread out over more therapists.

Another option is to split the treatment fee as a percentage. Both methods work pretty well.

How Real is Real?

In the beginning stages, you have no genuine basis for making financial projections, so it’s critically important to keep meticulous records. Be smart—create a budget and stay right on top of your income and expense and make monthly, or even weekly, adjustments. Stay out of hot water by cutting expenses or hustling up more business if things start to slow down.

Most small businesses show no profits for quite a while after opening. During the first year, you are getting your feet on the ground. In time, you will be able to take a regular paycheck. Start to pay yourself a small salary, but keep your business in the black. As profits build, bump up your salary as the business can sustain it. Get your accountant’s take on this area.

Get with the Cash Flow

Now hear this: your business cash flow will be the first thing to put you out of business. You can have the most amazing service in the world, but if you run out of cash, it won’t matter. In business, the rule is, “Retire on your profit, but live and die on cash flow.”

Cash flow in a nutshell: “Do I have enough cash in my bank account to cover my expenses?” Income waxes and wanes, but rent, taxes, and staff salaries keep on coming.

If you want to be in business next week, maintain a cash flow spreadsheet and be brutally realistic. Be conservative with your expenses and, on paper, underestimate your income. Your cash flow projection is, by design, a worst-case scenario. If you’re sure you can stay in business when things are slow, then you know you’ll be in great shape in the best-case scenario.

Though it will be tempting, don’t spend everything you make. Put money in a reserve savings account every month. Really. 

Deduct legitimate business expenses. Take that moment to record your automobile mileage for that business trip. It accumulates and pays off.

Location, Location, Location

Two strategies seem to work here. Be the big fish in the little pond or distinguish yourself through excellence. If you move out to Nowheresville, being the only clinic for 100 miles around cuts down on competition.

Maybe you like a little rough and tumble. An area where there is a lot of competition raises the awareness of natural healing, and you can rise to the top of the heap through superb service and results.

Most holistic clinics are destination businesses, but it doesn’t hurt to be near some concentrated humanity—within walking distance of office buildings with a few thousand stressed out office workers inside or near a large retirement community or next door to a successful natural foods store. Of course, your services must be tailored for your audience.

Outreach and Promotion

Okay, you’re in. Unfortunately, new clients don’t grow from seed. But you can plant some seeds that will bear fruit if you pay attention to marketing.

You don’t offer a low-priced, volume product, so media (be they print or broadcast) are generally not economically viable. You need relatively few clients, but they will be paying substantially for your valuable services. You attract them one by one.

What does work consistently is public speaking and networking. Find venues to speak. Hundreds of groups in your town need regular speakers at their meetings. Civic groups (Rotary, Chamber of Commerce) have weekly meetings and want to hear someone new. Support groups, corporate interest clubs, and hobby groups are all fair game. Teaching classes gives you the chance to make some immediate money for your time and bring in clientele, too. Look for community colleges, continuing education venues, libraries, parks departments, and church groups. Work your way up to conferences and corporate meetings.

Office Procedures

You are a great healing technician, but your business will largely succeed or fail on the way you run it, not on what happens in the treatment room.

Through trial and error, you will have to set up policies and procedures for running the place. Ask around and find out what has worked for other centers. The procedures for dealing with clients should be well thought out and reevaluated regularly.

Consider offering a free initial visit. That gets a lot of the administrative details out of the way and gives each of you a chance to wiggle out of the relationship without financial pressure. Then, schedule a first therapy appointment. Set a reminder to call in advance to confirm.

It’s amazing how many practitioners do not schedule follow-up appointments while the client is standing there. Don’t be shy—they can say no. It saves a lot of future phone tag. Recommend the treatment interval (one week, one month, etc.) right there. They want your advice. Schedule the next appointment, give ’em a friendly check in follow-up call, and check in again with an appointment confirmation call.

Call no-shows and cancellations. They usually still love you. They just forgot and were too embarrassed to call back. Charging a no-show fee? Some do, some don’t. Just make real sure they understand, and agree to your policy before you lay the big penalty on them. Giving a break for the first time or two, if they are not a chronic offenders, is usually well worth it in appreciation. And for the chronic offenders, have a serious talk and just be straight about your needs. Usually they’ll cop to it, and even take the sting of the no-show fee. Sometimes they even reform.

If you provide natural medicines, salves, or other at home doodads, call for refills if your client is about to run out. People who space out on their medicine refill tend to feel their results sliding and forget why they came to you.

Give your clients a lot of attention and help with their schedules so they are able to show up. Remember, you only get paid if they come to your center and receive treatment. Any help you can give them to keep them enrolled will pay off substantially in client retention and future referrals. Keep in mind that each satisfied client is actually hundreds of sessions of future referrals. Constant support equals success—balance it with your output per dollar of income. File your clients in three categories. “Has appointment” is the client with a booked schedule slot. Give them a reminder call 1–2 days prior to that time. “Needs appointment” is that client who no-showed or did not reschedule at the last session. Give her up to three calls to reschedule. “Inactive” is for those who don’t respond, move away, or disappear in a puff of mist.

Canvas your local market thoroughly and set your prices accordingly. Value added services, such as an ayurvedic spa specialty, command a higher fee.               

Create prearranged referral relationships with other practitioners and make it clear that you would like referrals back (within ethical limits). Refer for a limited service and ask for feedback.

On-Site Retail Dispensary

In many, if not most, clinics, the dispensary represents one of the most significant profit centers, yet this vital area remains intimidating for the majority of holistic practitioners. Does the acupuncturist sell Chinese herbs? The chiropractor, orthotics? Mastering the art and science of on-site sales can increase the success of the practice substantially—and not just financially.

Patients actually appreciate having the dispensary on-site. They know they are getting exactly what the practitioner intended. With one-stop shopping, they eliminate the often fruitless search for the obscure vitamin or cervical pillow. When they actually leave with their recommended item, they are much more likely to comply with the clinician’s suggestions.

Here’s how it goes: Improved compliance equals better results. Improved results equals improved profits. The additional profit center increases net revenue. The products could include dietary supplements, books, aromatherapy supplies, lifestyle aids, or topical ointments. Seasonal items work well. Think neti pots for the allergy season. Usually it gives a better impression to stock professional quality product lines that would not be available in retail outlets.

Investing in inventory is the trickiest thing about a retail sales area. Monitor it carefully and rotate out low sellers.

Your Goals Reached

Monitoring your policies and procedures gives the greatest possible benefit—improved client care for least expense and effort, and maximum profit. Your criteria are those elements of the care program or business practices that will be measured to determine quality and efficacy. Your standards are the practice objectives that have been previously established, against which practice is measured.

Now, think about the future. Therapists burn out. You will have physical stress. If you have a plan for how you will mediate these years of stress, you can go the distance.

What usually works best is to start small, focus on a specific clientele, and pursue the vision of the owner. Growing organically is probably safer, as it gives you the opportunity to make mistakes on a small scale and correct problems before they become too expensive. Feedback from the marketplace is the only true measure of business success.

Your clients are there because they want change. They expect your clinic to help them. Not every client is a perfect match.

With careful planning, and some key intelligent decisions, you can build a business and a life that help you, your staff, and your clients be healthy, happy, and blessed. 

 Karta Purkh Singh Khalsa is the founder of Seattle’s first multi-practitioner holistic health center. He is the course director for the International Integrative Educational Institute in Eugene, Oregon.

Note

1. A calculation using the 2007 average ABMP member-client contact hours per week (14.4), at an average rate of $60 per hour yields an annual 173 million sessions and $10.4 billion. A national consumer telephone survey of a representative sample of 1,008 adults aged 21 and older, conducted Jan 4–11, 2007 by independent, national public opinion research firm Harstad Strategic Research, Inc., Boulder, Colorado, revealed approximately 230 million massage sessions were provided to American adults in 2006 at an average cost of $60 per session. These findings yield a $13.8 billion estimate. Under neither of these calculations, do massage therapists receive all these dollars; a portion accrues to spa owners, landlords, and medical professionals providing space and referrals. With additional payments for training, equipment, services and marketing, massage is an $11 billion to $15 billion industry.