If you’ve decided to take the plunge and become an entrepreneur, there are a lot of things to consider. Going into business is a journey, and setting out on the right foot will keep you from having to backtrack later on down the road. Like most massage therapists who start their own businesses, you probably need to do things as economically as possible. With a little research and careful planning, you can avoid unnecessary expenditures, not to mention unnecessary stress. 

You may think you already know everything you need to know about going into business. If massage is not your first career and you’ve been a business owner before, that may be so. But if that’s not the case, you’ll want to seek the advice of a few experts. Maybe you’re not sure which business structure is best for you. Service Corps of Retired Executives (SCORE) is an organization that usually has an office in your local Chamber of Commerce or Small Business Association, and is one place you can go for free advice about business in general.

An accountant can pay for herself many times over by helping you set up your business bookkeeping, saving you money on your income tax, and advising you on budgeting and planning for your business goals and your future. An attorney can explain the various business structures and register your business if you don’t feel confident about handling it yourself.

Spending money for professional assistance at the outset can save you a lot of money in the long run and help you avoid the kind of financial pitfalls that put people out of business. You might even be able to barter massage for some of these services; it doesn’t hurt to ask.

Choose a Business Structure

Many massage therapists go into business as sole proprietors. Those who have future plans for expansion may choose a corporate structure instead. There are several types of partnership and corporate structures. Some states allow Limited Liability Corporations (LLC) or Limited Liability Partnerships (LLP); some don’t. The main benefit to incorporating is varying degrees of protection of personal assets in the event the business goes bankrupt. All business structures have unique features when it comes to taxation. One way or the other, you’re going to be paying taxes; as a self-employed person, you’ll need to pay quarterly estimated taxes, regardless of your structure (see more about taxes in “Tax Time: Stress Less, Pay Less,” March/April 2011, page 20).

If you’re a sole proprietor using an assumed name (that’s “doing business as” or D/B/A), such as Serenity Massage & Bodywork, you must register that name with your state revenue department and use it for both state and federal tax returns, for example, as Mary Smith, D/B/A Serenity Massage & Bodywork. You won’t have to put that big mouthful on your business cards, but you would want to put the exact name of your business on all legal paperwork. So choose your business structure, then you can do the rest.

A sole proprietor can use her social security number for tax identification purposes, but it’s wise to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS), which can be done instantly on their website. If you have others working for you, an EIN is a necessity.

Obtain the Proper Licenses

There are few states that don’t regulate massage on a statewide basis: Alaska, Kansas, Montana, Oklahoma, and Wyoming. The remaining states require licensure, certification, or registration based on meeting requirements for certain amounts of massage therapy education and passing a competency examination.

In all states, including the unregulated ones, there is a possibility that your locale requires a city and/or county license in order for you to operate a business. My town requires a business license because I sell products; if I didn’t retail, I wouldn’t be required to have one. In addition to the massage license issued by our state board, my state of North Carolina requires practitioners who are in any kind of health-care business to obtain an “Art of Healing” license as well. Laws vary greatly from place to place. Be sure you are in compliance with all state and local laws.

Members of Associated Bodywork & Massage Professionals (ABMP) can log on to www.abmp.com for more information about the requirements in their state.

Think Location, Location, Location

Choosing a location for your business requires a little legwork. When you find a space that is appealing to you, don’t sign on the dotted line until you have checked with your local city hall or county government regarding zoning laws. Failure to take this step could result in financial disaster. You wouldn’t want to sign a lease and find out after the fact that local zoning ordinances prohibit your type of business from operating in that location.

As archaic as it sounds, there are still places that prohibit massage establishments from opening their doors in certain areas. I have run across towns that prohibit massage therapy businesses from being located in a shopping mall, for example. In 2010, a Chicago alderman managed to get an ordinance passed that restricts massage businesses to areas that are zoned for heavy industry and taverns. It was a misguided attempt to deter human trafficking, but it just goes to show that the old “massage parlor” mentality is still alive and well in some places. It’s better to be safe than sorry, so check your local laws before committing to a location.

It’s also important to conduct a market study. That doesn’t mean undertaking a scientific research project; it can be as simple as looking in the phone book and driving around town to see what competition is in the area. Competition is a healthy thing, and there are enough aching bodies and stressed-out people to go around. However, you might maximize your chances for success if you choose an area that isn’t saturated with other businesses of the same type. If you’re a Rolfer, for example, you might not want to open a practice across the street from another Rolfer. But if you practice medical massage or sports massage, you’d be setting yourself apart if the only other business in the neighborhood is a day spa—if you indicate that in your name and advertising.

Decide What’s in a Name

Choosing a name for your business is one of the first things you need to do—and with good reason. Your business name will be printed on your signage, business cards, and all your other business literature, so it’s vitally important to get it right the first time. The most serious problem that could arise is choosing a name that someone else has trademarked or registered, which could result in legal action being taken against you. You are probably safe if you are using your own name as the name of the business, unless your name happens to be something very common. It’s a safe bet that Massage by Elizabeth Finklemeister won’t be taken if you live in a small town, but Massage by Mary could feasibly already be in use.

You don’t want people confusing your business for someone else’s, and that includes the tax man. You can do a name search on the website of the United States Patent and Trademark Office at www.uspto.gov to see if the name you have chosen is trademarked. You should also look on your state government’s website to see if the name you’re planning to use is already taken; registering a name with the state is not the same as a trademark, but may still offer some measure of legal protection. Still, if you’re choosing a name that is catchy and/or unusual, you may want to trademark it, especially if you’re harboring grand dreams of being the next Massage Envy or operating an exclusive spa.

According to an article written by Kermit Patterson that appeared in the New York Times,¹ even a small business can have difficulties with choosing a name. A spa owner in Philadelphia has gone through six names in two years. One choice had been taken. She switched to Bodyworks; customers said it reminded them of an auto body shop. She tried One Touch Body and Spa, but she got dirty looks when she went to the city for a permit. “They’re looking at me over their glasses with this ‘touching body’ in there,” she said. “I tried to explain that I do therapeutic massage and guys were coming up to the counter and saying, ‘Yeah, right, where’s your place?’” For this business owner, not choosing the right name first has been a stressful and expensive process. Better to get it right the first time, since you want to cultivate positive name recognition.

It’s also wise, and not just for legal reasons, to choose a name that isn’t so close to another business name that clients could easily get confused. If there is already a massage business in your town named Healing Hands, don’t name yours Healing Touch. If someone is looking for you in the phone book or looking at your sign, it’s easy to see how those two things could run together in someone’s mind. Most importantly, if your name does not convey what you do, then be sure the word(s) massage and/or bodywork or your modality (if you specialize) are added to the name. “Serenity” may sound nice, but if you don’t add a descriptive term to that, people will have no idea what it is.

Invest in Insurance

The single most important piece of advice I can offer practitioners is to protect themselves with liability insurance—one of the many member benefits offered by Associated Bodywork & Massage Professionals (ABMP). I’ve been called as an expert witness in cases where a client was suing a massage therapist for supposedly causing harm, and also sat on our state board for five years listening to clients who were accusing a therapist of causing them harm. Don’t think it can’t happen to you—it can happen to anyone. I wouldn’t put my hands on anyone without it.

If you rent office space, you’ll also want to purchase renter’s insurance. In the event the building burned or blew away in a storm, the owner is under no legal obligation to replace any equipment, supplies, or other assets belonging to you; that’s your own responsibility. If you own your property, that’s all the more reason to be insured; if you’re still paying for it, the bank will insist on it. Contact ABMP for information about Business Property Protection add-on to your liability insurance coverage.

Don’t forget, if you’re self-employed, you’ll have to provide your own health insurance coverage. It’s wise to purchase disability insurance as well, in case you suffer an illness or injury that interferes with your ability to work. The Social Security Administration can take months, sometimes years, to rule on a disability claim, so disability insurance is a good thing to have.

  Laura Allen is the author of Plain & Simple Guide to Therapeutic Massage and Bodywork Examinations (Lippincott Williams & Wilkins, 2009) and One Year to a Successful Massage Therapy Practice (Lippincott Williams & Wilkins, 2008). Her third book—A Massage Therapist’s Guide to Business—was published by Lippincott Williams & Wilkins in January. Allen is the owner of THERA-SSAGE, a continuing education facility and alternative wellness clinic of more than a dozen practitioners of different disciplines in Rutherfordton, North Carolina. Visit her website at www.thera-ssage.com.

Note

1. Kermit Pattison, “How to Register a Small Business,” The New York Times, accessed February 2011, www.nytimes.com/2010/04/01/business/smallbusiness/01sbiz.html?_r=1&dbk.