Pros/cons of the various business types for MTs?

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Alion

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Hi there! I’m a massage student who’ll be graduating in…um, a little less than a month—& it just occurred to me that I might get more responses to the following questions online than how I have been surveying MTs up till now [calling or walking into offices—& more often than not, nobody having the time to talk to me]—

So I’m trying to make sense of the real differences between various business types MTs work within [sole proprietorship, partnership, LLC, &c] in practice. I was wondering if anybody with any amount of experience with any of these business types [within the context of massage therapy] might be willing to answer the following questions:

  • 1. Are you happy with the structure you selected?

    2. Was it easy or complicated to set up?
    (& how much time did you have to invest in setting it up?)

    3. Were there costs associated with the business type you chose?

    4. What are the advaneforum.xxxes and disadvaneforum.xxxes to the type of business structure you chose?

    5. If you had to do it all over again, would you still choose the same business structure? (AKA: any regrets?)

    6. & lastly: Any advice to those of us just starting out from school & looking to have their work as an MT be their primary source of income?

If you’d prefer to respond to these prompts via PM, feel free to! [But if you haven’t a preference, I imagine other MTs considering starting out on their own may find your responses useful, so sharing in a reply here is preferred—]
 
Pros/cons of the various business types for MTs?

Corporation, cost approximately $2000 to set up and advaneforum.xxxes lie in the annual tax savings.
Your setup I would assume will depend on your work enviroment. My guess is most independent contractors fresh out of school would set up a sole propreitorship. In Canada your not taxed unless you exceed $30 grand. I`m not advocating, but I know many therapists that operate a cash business, and provide various rates for patients with or without health coverage.
 
Pros/cons of the various business types for MTs?

Initially I was a sole proprietor from about 1992 - 2003. I worked by myself (in two different healthcare professions) and had limited funds, so I didn't want to spend anything that could potentially make my life more difficult.

In 2003, I married an immigrant, who got his massage license as well, and we began to practice together. Because of the nature of the office now becoming a practice with my working as a seperate health care provider & MT, and my husband working as an MT --- we had no choice but to incorporate (it had to do with us practicing in different fields under the same roof as co-owners of teh business). We chose an LLC. At the time, it was a few thousand dollars, which was a lot of money that we really didn't have... but we made it work.

1. Are you happy with the structure you selected?

Yes. However, it doesn't really make me feel any better than when I was a sole proprietor, mainly because I am not working with large volume. So, although I see the upside of being incorporated, I don't have any touchy-feely feelings about it. I don't like having to do minutes for the corporation each year and the taxes that come along with it - but, they don't take that long to complete.


2. Was it easy or complicated to set up?
(& how much time did you have to invest in setting it up?)

Easy. Had an attorney draw everything up. Spent a few thousand dollars.

3. Were there costs associated with the business type you chose?

Attorney fees. Seems like the first years taxes were higher than they were previously (if I recall correctly).


4. What are the advaneforum.xxxes and disadvaneforum.xxxes to the type of business structure you chose?

Structure of litigation.


5. If you had to do it all over again, would you still choose the same business structure? (AKA: any regrets?)

Yes I would do it again. I had no choice based on our business model.


6. & lastly: Any advice to those of us just starting out from school & looking to have their work as an MT be their primary source of income?

It's hard to work primarily as an MT. It takes many years to build a practice. Feel free to read some more of my comments on the subject here.

If you do a search you can find a number of threads on sole propritorship and incorporating. Advance seach under "LLC" to find the largest amount of them.
 
Pros/cons of the various business types for MTs?

1. Are you happy with the structure you selected?

I co-own a large massage business with a partner. We are both MTs and we have about 20 employees. My partner and I formed a Chapter S corporation which purchased the massage center from the prior owners. We are happy with the structure because it fits our business model well, providing a good combination of tax and liability advaneforum.xxxes that are suitable to our needs.

2. Was it easy or complicated to set up?
(& how much time did you have to invest in setting it up?)


It was complicated, and we needed a good lawyer who had lots of experience setting up small Chapter S corporations. She advised us how to best structure the corporation to provide the type of organization and balance needed to make the partnership equitable and clearly defined. This process took weeks of planning and several meetings with the lawyer, plus innumerable conversations with my partner.

This was preceded by MONTHS of research, planning, and learning about the business as it had been developed by the original owners. We met with business advisors, tax and finance and insurance advisors, and other members of our support network to determine the best way to proceed. We also spent a load of time putting together the paperwork for the business loan and working out the final details of the business purchase.

3. Were there costs associated with the business type you chose?

Yes, it cost a lot to incorporate, and there were many other professional fees involved with the purchase of the business, the financing of the purchase, registering with the state, hiring an accountant, hiring a payroll company, etcetera.

4. What are the advaneforum.xxxes and disadvaneforum.xxxes to the type of business structure you chose?

We have a structured business relationship that clearly defines ownership, how disputes may be settled, etcetera. We are content with it and have the comfort of knowing that we won't have to figure out all of that should something go awry in the future. If something happens to one of us, the arrangements for disposition of the business are already in place. As an S-corp, we are eligible for certain tax advaneforum.xxxes that our accountants take care of.

If we were much smaller, with just the two of us practicing together, an LLC might be a better fit. An S-corp isn't worth the extra effort and expense for a sole proprietor. It becomes relevant with growth.

5. If you had to do it all over again, would you still choose the same business structure? (AKA: any regrets?)

We are satisfied that we made the correct choice for our business model.

Sometimes I long for the simple days of working for someone else, without the extra hassles of being a small business owner. I got more sleep and exercise back then. ;) Being a business owner is NOT for everyone. You have to bust your butt if you really want it to work, especially during a down economy, unless you are extremely lucky and/or talented. (I've heard it helps to be both.) On days when I get to work early to prepare for clients, do massage all day, then stay late to do janitorial duties, payroll, and work on marketing... I envy my employees, who can just come in, do massage, write their SOAPs, and leave! :lol: I don't think nostalgia is the same as regret, but sometimes it probably gets close. :grin: What keeps me highly motivated is that I really, really love what I do, and am grateful for my incredible partner and the wonderful team of employees who make it work, and for our loyal clients who give meaning to what we do.

6. & lastly: Any advice to those of us just starting out from school & looking to have their work as an MT be their primary source of income?

My first bit of advice is to get your hands on as many bodies as you can as fast as you can. Coming out of school, you might think you have the mad skillz, but reality awaits and it isn't overly generous. If you haven't really studied the details of setting up and running a business entity, and don't really know where to start, perhaps you should take a job where you can just do the work and learn how to build a clientele. When I graduated from school, I quickly realized that I really didn't want to take on the hassles of business ownership, so I worked for someone else until I was ready and the right opportunity arrived. I kept working as I prepared to take the plunge, and took care to leave on good terms - I'm still friends with the people I worked for back then. :)

My second bit of advice is to get involved with other members of your profession. I became an active member of the AMTA in my state, and learned a TON from the other members I met along the way. I also attended CE events and developed a more sophisticated approach to my work, far beyond the basics taught in massage school. Now I know many other MTs in my area and a bunch of them have referred clients to me. Due to my involvement with other MTs, I have seen hundreds more clients and earned thousands more than I might have. Getting involved can be free to you, too - there are always volunteer opportunities with the AMTA and other organizations. Small investments of time and money early on may pay off BIG later!
 
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