How to Start a Massage Therapy Business
Anyone with a desire to help people and an interest in the body and physical well-being may want to consider opening a massage therapy business. While this industry does require some specific schooling and certification or licensure, becoming a massage therapist doesn’t take nearly as much time or monetary investment as it would take to become a chiropractor or other medical professional. Massage therapists who operate their own businesses enjoy scheduling flexibility and control of their own businesses and helping customers to recover from injuries or to reduce pain can be a rewarding experience.
Massage therapy businesses offer therapeutic services to a variety of customers. Massage therapists sometimes choose to own and operate their own businesses, but massage therapists may also be employed directly by a spa or other facility. Massage is increasingly becoming valued for the medical benefits it offers, so some massage therapists focus on offering services to complement traditional medicine and treatment. Customers often become repeat customers, and this repeat business is important to a massage therapist’s profits.
Starting your own massage therapy business requires more than just massage therapy skills; massage therapists must also have strong business skills. The ability to identify their target market, tailor their marketing to their audience, and even ask clients to schedule a second massage at the time of their first appointment are all necessary skills.
The massage therapy industry has undergone significant growth from 2013 to 2018, and the industry is projected to continue growing. IBIS World states that the industry experienced a 7.3 percent annualized growth during that time, and in 2018 alone, the industry grew by 2.8 percent. The industry brought in total revenue of $18 billion in 2018, and the number of businesses has increased to 279,075. As of 2018, the industry employed 401,320 people.
This increased growth reflects growth in disposable income. While the medical industry increasingly recognizes the health benefits that massage offers, massage services are still discretionary purchases. With increased disposable income, more people are likely to make discretionary purchases like a massage.
The massage therapy industry is gradually changing for the better. According to Bamboo MBLEx Review, one of the evolving trends is the increased regulation of the massage therapy field. In 2005, the Federation of State Massage Therapy Boards was founded, and since then, more states have begun to require licensure requirements for massage therapists. Currently, 46 states regulate massage therapy or offer voluntary certification opportunities. With more states regulating the field, massage therapy is likely to become more accepted for its health benefits by the medical community.
More clients have become interested in preventative health care, meaning that many people seek out massage therapy for its preventative health benefits. Additionally, there’s an increasing demand for a personalized massage. Because some clients seek massage for aches and pains or particular injuries, they want to describe their issues and receive a massage tailored to their individual needs. This trend requires that massage therapists stay up to date on the most current practices and massage techniques in order to deliver customized, quality massage sessions.
Most massage therapy business clients are adults. According to the American Massage Therapy Association’s most recent consumer survey, 67 percent of survey respondents stated that their last massage had been for medical reasons. Twenty-six percent of respondents sought out massage because of stress, and 23 percent of respondents got a massage to pamper themselves. The largest age demographics for people looking for massages range from the early twenties through the mid-sixties.
Customers may seek out massages for different reasons, and massage therapists can tailor their businesses to market to specific audiences. Some massage therapists may focus on promoting how massage can relieve pain after injuries, while others may focus on the stress-relieving benefits of a massage. The target markets for each type of business will differ, so it’s important for a business owner to understand their branding and target audience.
Checklist for Starting a Massage Business
If you’re thinking about starting a massage business, it’s important to do your research first. Here is a checklist to help you get started.
Step 1: Write a Business Plan
After coming up with the idea, the next step in starting your business should be to write a business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.
Related: How to write a business plan
Step 2: Name the Business
Finding the perfect business name can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.
Step 3: Choose a Business Structure
A business structure (also referred to as a business entity) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business structure is best for a massage business, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
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Step 4: Select your Location
Having a commercial space that is close to clients is in a high traffic area and has close parking is beneficial to a massage therapy business. The cost of leasing office space will vary with the size and location.
Also, being located close to complementary businesses (or co-locating) that do not offer massages such as gyms, tanning studios, and beauty salons can help bring in additional traffic through visibility and cross-promotions.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
In addition to attaining a state’s required massage certification or licensure, massage therapy business owners also need to acquire any general business licenses or permits that their states and towns require. A few common ones include a sales tax permit, Employer Identification Number, and Occupancy Permit, among others.
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a massage therapy business is another. While the cost to start a massage therapy business is generally low, funding can be difficult due to the items being purchase not having much collateral value. In order to get a small business loan, the borrower(s) will need to have good credit and be able to personally invest 15-25% towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 8: Get your Marketing Plan in Place
With the increasing awareness of the medical benefits massage offers, new massage therapists may want to establish connections in the medical industry. Referrals are highly valuable because of how this industry depends on recurring customers. Finding a medical practitioner who is willing to refer a massage service may be an essential element in helping to support a business.
Common marketing efforts for massage businesses include using social media platforms like Facebook, Instagram, and Twitter, print and radio advertising, and even networking with other local businesses and handing out business cards. Massage therapy businesses can offer loyalty discounts since so much of their business depends on repeat customers.
Every business is going to need a logo. Make a professional logo in no time with the free Canvaa logo maker!
Step 9: Get Business Insurance
There are several types of insurance to consider when starting a massage business. A few of these include:
– General liability insurance protects a massage therapist against legal fees and potential financial losses if a customer is ever injured during a massage or at the business.
– Commercial property insurance covers damage to the building that a massage therapist is renting or owns, such as in the case of a fire. Some policies also cover damage to the equipment within the building.
– Worker’s compensation insurance is required for any business that hires employees. This insurance provides coverage for lost wages or medical expenses that a worker might incur if they’re ever injured while on the job.
The cost to insure a massage business will vary according to factors like the value of a space a therapist is renting and how many employees a business has. To get the most accurate idea of what insurance will cost, request quotes from multiple insurance companies. Compare the quotes while paying attention to factors like monthly premiums, deductibles, coverage limits, and exclusions.
Step 10: Hire Employees
Many massage therapists operate their own business without employees, but a successful business may benefit from hiring another massage therapist or two to handle appointment overflow. According to PayScale, licensed massage therapists earn an average salary of $40,309 per year.
In addition to budgeting for employee salaries, a business’ budget also needs to include funds for unemployment insurance, employee paid time off, health insurance contributions, and workers comp insurance.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:
- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.
Find bookkeepers in your local area or use a service like 800Accountant.
How much does it cost to start a massage business?
Starting a massage therapy business can be very affordable for a mobile massage business, or it can be more of an investment for therapists who want to establish their own brick-and-mortar business location. Plan to spend a minimum of $10,000 to pay for school, certification, and other start-up costs for a mobile operation. A business with a brick-and-mortar location can cost closer to $17,000 or more to start.
Some common startup costs for a massage therapy business include:
– Education and licensing/certification
– Equipment like massage tables
– Supplies like massage oils, creams, lotions, towels, and robes
– Waiting room furniture and decorations
– Enough cash to pay the first few months of rent, utilities, internet, phone, payroll, etc.
– Vehicle (for a mobile massage therapist)
How much can a massage business owner make?
Many massage therapists run profitable businesses, but their income varies according to the business’s location, specialization, and competition. The Bureau of Labor Statistics highlights how the May 2018 median annual wages for massage therapists differ depending on the industry in which each massage therapist worked. Massage therapists who worked in chiropractic offices earned $51,690, while massage therapists who worked in other health professional offices earned $44,560. Massage therapists who worked in personal care services earned $39,740.
Are there grants to start a massage business?
It’s extremely rare to find a grant to start a massage business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.
What skills are needed to run a massage business?
A massage therapist doesn’t need to have a business degree to start their own business, but certain skills and experiences will be beneficial.
Massage therapy education and certification. A quality massage therapy education is essential to working as a massage therapist. The Massage Therapy Education Guide states that states require that massage therapists complete between 330 and 1,000 hours of training before qualifying for certification. Students should expect to spend up to two years in massage therapy school and complete training requirements before they’ll be able to work professionally.
Interpersonal skills. The ability to make customers feel welcome and relaxed is an important skill in the massage therapy industry. Massage therapists depend on repeat business, so establishing a positive relationship with clients can contribute to the therapist’s success.
Disciplined scheduling management. Massage therapists need to keep detailed, accurate schedules, especially if they travel to different locations.
Marketing talents. A massage therapy business owner will benefit from having some marketing talents. If a business owner can manage their social media accounts and establish a quality website, they can potentially bring in more business.
What is the NAICS code for a massage business?
The NAICS code for a massage business is 812199, which is categorized under Other Personal Care Services.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.
Related: What is a NAICS code?