Going from sole practitioner to working with others

[~SuperGirl.(:]

I may be in a position that I will be moving from my current office space because new (loud) tenants are due to move in shortly next door to me. They purchased the office condo I am in, and they will be in the adjoining office condo. I am not optimistic that I can stay in my current space.

Having said that, I have been looking at other options. I have found a space in a building I had worked in years ago, and I am friendly with the landlord and most of the tenants. The landlord has been trying to rent the space for a while, but it is a larger space with three treatment rooms, so he is asking more than I can afford in rent. He knew I was looking and contacted me and asked me to look at the space. I will be doing that either today or tomorrow.

I would like to move into that space, but I would have to find other practitioners to share the space with me in order to afford it. As we know, the economy is tough, and I don't know if that will happen. Since the landlord is anxious to rent the space, he may agree to rent it to me for less. If I were able to find at least one practitioner to rent one of the rooms (and I may have one), a third room would be available for subletting to generate additional income.

So there are two issues: We would all be independent, sole practitioners, working under one roof. I need some guidance as to how to structure the office - what sort of guidelines should be established to work cohesively together.

Secondly, if the landlord agreed to rent the space to me for what I can currently afford, if additional income should be generated from rental of the other rooms, what agreement do we come to regarding that? I would like to say that once one of the rooms is rented, he would get that addtitional income which would almost equal what is asking now for rent.

I would like the option to sublet my own office (and the third treatment room) when I am out of town (I have another practice) and be able to keep that income to help me with payment of my rent and to run the business in general.

Can anyone offer suggestions on either or both of the above scenerios? Thanks.

 

[Bart]

Remember that you really don't make that much working for your self, you start making more when you have others working for you, you also build a stronger practice for your self , and build potential equity if you will, by building a clinic!, i went from working for a clinic, to renting one room from them and having someone work FOR ME, i took 30%.
Then i was able to start my own clinic and it was the best move i could ever make, i have 3 rooms and 4 therapists working for me i give them 70%, they market and build up a clientel, when they leave i can bring in someone else, i bring in about $2000 a month from them or more, wich pays for my rent and receptionist/marketing. i have the best space to work in, we have a townhouse in a busy buisness/residential area wher all the town homes have 700sq ft commercial space on the ground floor and 1700 sq ft residential up stairs, it still looks very buisness oriented so it doesnt scare people away thinking they are getting a massage in someones home, and i only pay about $1600 a month in moreforum.xxxe for both spaces combined and thats canadian$.

So i say reevaluate what you have, and what you want now and in 5 years, develop a plan, and get someone working for you! have them pay for your space, and you metion you work somewher else so use that as a safety net for the time being.

 

[Nikki]

See if you can get the lease for a set $ amount, with the understanding that you are responsible for any subletters and can keep any income from subletting. This gives the landlord assurance that he/she only has to deal directly with you, and you have the opportunity to make a little money from renting the extra space.

Regarding the subletters, have a written sublease that covers everything that may come up. Use your lease for the space as a model. Then get a deposit up front from each subletter in addition to monthly rent. Don't complicate your life by asking for a perceneforum.xxxe of income - just get a set $ amount, with the understanding that rent may increase in 3-6 months, then annually thereafter. Don't get too greedy or be overly generous. Chances are you'll use the extra money to promote your practice, and that will bring in more potential clients for everyone, especially if you have complimentary modalities. Also, you're the one taking the biggest risk, so you deserve a larger return on investment.

Good luck!

 

[dlutemp]

Thank you both. I saw the space today and I am not sure I want it because it needs a lot of work and I don't have the energy to do that.

A few years ago I had a large space with 5 treatment rooms that I was trying to rent. I found that I spent a good deal of time and money trying to find tenants, and as a result my practice suffered. I decided to leave that space and just work by myself. It has been great ever since.

My "plan" was to stay where I am for a few more years, move to the state where my second practice is, and work there in the summer, and then go to FL for the winter months and start a practice there as well. I have all my training for FL (I went down last summer to get everything I need) and all I have to do is apply.

So, you see, my focus needs to change, and I really don't know what to do at this point.

 

[Tiff-Any]

What are your priorities in life? What kind of work schedule/arrangements would best suit them?

Being the owner of a business doesn't always mean you have more freedom. It sounds like you need to keep some options open in case your schedule changes.

Rather than be the business owner/manager, perhaps it would be easier to join someone else's existing business until you move to the state where your 2nd practice is. That might also simplify what do to with your clients when it's time to leave.

 

[serendipity]

Jason,

You always seem to have great advice.

My priorities are what's in front of me, not what I want to happen down the line (thanks to the economy). I want to continue doing what I've been doing for the past 11 years, working for myself.

I am going to try and talk with the new landlord about my concerns and hope that he understands and will accommodate me. In the meantime, I will keep my eyes open.

There are a couple of therapists I know who may be willing to find a space where we all could work independently under one roof, but the rents are astronomical! We, like everyone else, are hesitant to take any risks. So I would be willing to join an existing practice if I was able to rent a room and be an independent contractor.

 

[Pompal 09.]

I agree with rmt4u. Don't rent the space, rather hire therapists to work for you. The money may be a little tight at first, but the potential is way better. If you rent a room for $100 a week, you will get $400 a month from that therapist. If you hire that same therapist as an independant contractor he get's a commission on the massages he does (at your price schedule), and you get the rest. So, for arguements sake, let's say you charge $75 for an hour massage, you pay 60% commission to the indendant contractor. He does 20 massages a month (very easy to do), bringing your office $1500. Sixty percent goes to the I.C. ($900) leaving you $600. If I remember right, you are looking at a 3 room place. Now add a second I.C., same figures, you have now made $1,200 that month and not done anything. Had you rented the rooms, you would have only made $800.

 

[Ms Take]

Hiring therapists is something I never wanted to get into, because it would mean more paper work for me. I am not even sure how to go about it.

I may be required to provide health insurance, do payroll, etc. Hiring someone vs. renting a room, translates into "employee" in the IRS's eyes, so keeping everything as separate as possible is necessary to maintain that IC status.

I am very hesitate going that route, although I agree that it would be more financially advaneforum.xxxeous, and I don't want to assume the financial burden if I am not able to find anyone, either to rent a room or as an employee. It's a scary time for everyone.

I have been rethinking the space I saw mentioned above, and it could be a really nice space, but it needs a lot of work to get to that point. So there is the outlay of that money, too. Going from a happy, single practitioner in a comfortable, quiet space, to a completely different environment as outlined above, requires some adjusting in my mind. I'm going to keep thinking about it and maybe spend more time there to get a "feel" for how things would be.

Thanks for your input though.

 

[jah]

I'm replying mostly for other's who may be following this, since you are re-thinking that space. It may be different in Boston, MA(?) but in Tennessee an I.C. is responsible for paying their own taxes, I just have to file 1099 forms with the federal govt. In TN a I.C. is not an employee, that's the beauty of hiring I.C.'s, they are resposible for themselves. I make all my therapists maintain there own massage liabilty insurance, through any of the nationally recognized providers.

One more thing, yes it is a scary time for everyone. I was just reading a newsletter. An MT was complaining about competing with the massage chains and what could she do about it. The newsletter offered some good advice. I personally have been following a lot of the advice I get from the newsletter and my own intuition and skills. I have been seeing a steady increase in new clients of 30% a month.

You are doing a good thing by seeking advice. Advice is free and you can get some good advice, and some bad. You just need to follow up on any one's advice if you are unsure of it.

Good luck in your endeavors, if you need any help, or advice, I will be glad to offer what I can. If I don't have an answer for something, I will tell you staight out. I like to help where I can, and see everyone succeed.

 

[Burning like Antartic ice]

I agree with rmt4u. Don't rent the space, rather hire therapists to work for you. The money may be a little tight at first, but the potential is way better. If you rent a room for $100 a week, you will get $400 a month from that therapist. If you hire that same therapist as an independant contractor he get's a commission on the massages he does (at your price schedule), and you get the rest. So, for arguements sake, let's say you charge $75 for an hour massage, you pay 60% commission to the indendant contractor. He does 20 massages a month (very easy to do), bringing your office $1500. Sixty percent goes to the I.C. ($900) leaving you $600. If I remember right, you are looking at a 3 room place. Now add a second I.C., same figures, you have now made $1,200 that month and not done anything. Had you rented the rooms, you would have only made $800.

You forget that sales taxes, FICA, worker's comp insurance, and a few other things come out of the 40% the employer keeps (in this scenario). In reality, an employer paying 60% commission gets to keep maybe 10-15% of what the client pays... and THEN you use that money to pay for rent, utilities, marketing, etc. The scenario you are describing is not nearly as profitable as you suggest.

Sorry to burst the bubble, but I live this reality every day. That reality is why ME and other chains are paying their MTs peanuts rather than a livable wage/commission. Being an employer has MANY operational benefits, but it also brings many extra operational costs and obligations. Being an employer is not something you do lightly. Your whole business model should be designed around it.

For healer611, I stand by my earlier advice.

 

[Pompal 09.]

You forget that sales taxes, FICA, worker's comp insurance, and a few other things come out of the 40% the employer keeps (in this scenario). In reality, an employer paying 60% commission gets to keep maybe 10-15% of what the client pays... and THEN you use that money to pay for rent, utilities, marketing, etc. The scenario you are describing is not nearly as profitable as you suggest.

I'm not sure about where you live, but in Tennesse if you employ Independant Contractor's they are the ones responsible for their own taxes and such. That's the beauty of it, they are not considered "employees". I make all my IC's keep current with insurance through AMTA or similar. Yes, I do have rent, utilities and marketing to pay, but it's easliy covered through the commisions. I actually get paid commission, and am an IC of my own company. Marketing can be expensive, but most of my new clients come from the Internet, where I don't pay for marketing. It's all done free and I get an average of 10 new clients a month.

 

[conor r]

Your MTs are ICs and therefore not employees. Our MTs are employees, and we wouldn't have it any other way. There are practical pros and cons to each option, and your business model must be designed around whichever one you choose.