By Allissa Haines
This is the first in a recurring blog series with business expert Allissa Haines that focuses on simple ways you can improve your practice.
Anyone else stroll into running a massage business with little to no business skills and no financial acumen? Just me? Nah, it’s not just me. Many of us do exactly that, figuring out what it takes to run a successful business as we go and learning (hopefully) from each mistake.
Many of us also start to realize, often after a disastrous tax prep session or a few months without a decent income, that being reactive instead of proactive with our finances is stressful. Money stress is exhausting and sucks all the fun out of being an independent business owner.
Here’s some good news: There is a better path and it’s paved with entirely manageable baby steps. Let’s walk through some simple steps to improve your financial skills and knowledge so you can have a successful and sustainable massage business.
1. Know Your Numbers
There are three foundational numbers you should know and revisit regularly: gross, net, and take home pay.
Gross refers to the total amount of money that you collect from providing massage and selling retail products. Net is the amount you have remaining after paying all your business expenses. And take-home pay is just that—the amount of money you pull out of your business and put into your personal account.
When you have those numbers, you can use them to make decisions. Do you need to raise your prices, or see a few more clients a month? Are your expenses out of control? Maybe it’s time to rethink all those monthly subscriptions or share your space to help defray costs.
If you don’t have a solid grasp on how much money you are taking home, that’s probably because you don’t have a real system in place for paying yourself. Be sure you have a structure that makes sense for you whether it’s weekly, biweekly or monthly.
2. Use a Software or Spreadsheet
Get cozy with some kind of program to record and organize your income and expenditures. Yes, you can go old school with paper and pencil. But when you use a program to record transactions, you can run reports and answer financial questions about your business with much greater speed.
You don’t need to spend a lot of money on software or even hours upon hours watching tutorials to learn a new system. My favorite money tracker is Waveapps. It’s free and much easier to learn and customize than more expensive (and unnecessarily complicated) systems. If you’re already into spreadsheets and you prefer to enter all your transactions manually, they are a solid option, too.
It’s perfectly OK to delegate this to a bookkeeper or even a savvy friend or family member. I'm not suggesting you hand over all your accounts and blank checks to someone else. But if you have a friend with good tech skills who will help you log into your program, download transactions, and then help you categorize everything properly, let them help! Even just having another person around doing their own bookkeeping (or homework) while you do yours can take the edge off the angst of the tasks.
3. Know Your Style
I’ve heard some people are diligent about recording transactions and filing receipts weekly, but that seems like an urban myth to me. More often, the business owners I talk to handle bookkeeping monthly. Others conquer the books quarterly, or even annually—in a panicked haze 72 hours before their tax prep appointment.
I can’t tell you what the best approach is, because the only method that matters is the one that will work for you. Think about your habits and make a plan. Ideally, you can pair the task with paying yourself, which is a pretty nice reward for all that massaging and business-owning work.
I don’t always enjoy the grind of the bookkeeping itself, but I do love having a regular and healthy relationship with my money, and I love, love, love paying myself. So, I handle most of my bookkeeping and receipt-organizing monthly and the very last task is always paying myself (and getting a cookie as a reward).
Bonus Step: Consider Where You Need to Grow
If you feel like a beginner in handling the money tasks of your business, take the time to explore resources to learn more. This is another "know yourself" opportunity. Will you do better with a physical book, ebook, audio book, or maybe a series of short podcast episodes about business finances? Think about what’s best for you and do some Googling to find a resource that fits your style.
One of my favorite places to learn more about business money management is in the blogs of various accounting software programs. Waveapp and Bench have good business money resources, and my favorite personal finance resource is YNAB.
If you have the basics figured out, your next steps may look different. It may be time to look into creating a retirement account or learning about different business structures to see what could work better for you and your business in the future.
Wherever you are with your financial skills, there’s always a little more you can do to improve your business!
Allissa Haines is a practicing massage therapist and columnist for Massage & Bodywork magazine. You can read her column, “Blueprint for Success,” in the digital edition at massageandbodyworkdigital.com.
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