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| Based on lots of experience |
What follows is the content from my two most recent blogs
and recommendations for education in the massage therapy world for the next
five years. The world of massage therapy is changing and
that is OK.
Based on the increased growth of the massage franchise
business model, an increase use of massage in health care settings, increased
regulation of Independent Contractor job status it is likely that massage
therapist especially at entry level will be employees. Education must respond to these changes.
Here is a list for schools and teachers to support entry
level massage practice in the employee setting.
•
Clearly define entry level education based on
state licensing requirements
•
Use the ELAP to develop entry level education -
content and contact hour.
•
Teach an entry level program that focuses on
therapeutic massage.
•
Do not inflate the program hours to qualify the
program for financial aid.
•
Differentiate between entry level expectations
and advanced level expectations based on experience and ongoing education.
•
Make sure the curriculum is up to date.
•
Make sure all teachers are teaching to the
curriculum.
•
Make sure all teachers are teaching correct
information.
•
Make sure the students can perform a full body
massage with the outcome of relaxation in 50 minutes.
•
Make sure students can perform 5-6 50 minute massage sessions a day.
•
Make sure the students understand biologically plausible
outcomes for massage benefit.
•
Teach students to adapt general massage for each
individual client
•
Support the importance of general nonspecific
massage
•
Realize the economy has changed, the market for
massage has changed and students will be entering a career different from 10
years ago.
•
Educators stop instilling unrealistic earnings
expectations. This backfires. Graduates
need to begin their career and they will be discourages when the reality sets
in if you tell them they are going to make $40K right out of school. That first year of work is the graduate’s
best learning opportunity. It is OK if the graduate begins working at a lower
income.
And ---Keep tuition reasonable --less than $10,000. Again,
independent small school owners I suggest we avoid federal financial aid. We can offer lower tuition and provide an extraordinary
education.
Educators you need to understand the content in that
follows from the two blogs reprinted here.
Attention Massage
Therapy Employers and Contractors: What you need to know!
There are many environments where massage therapist are
employees. The most common employment
environments are spas, franchises and independent massage therapy clinics. Chiropractors are also employers of massage
therapist but also tend to provide independent contractor relationships with
massage therapist. Traditional health
care environments such as pain clinics, hospitals and so forth also employ
massage therapists.
Business relationships structure as independent contractors
are not employer/employee relationship.
These are essentially rental agreements for use of space and
services. This is a HUGE difference.
There is a lot of confusion in the massage community about
pay rates. Independent contractors are
often confused with employees. There is a huge different between these two
career pathways that is related more to structure rather than function.
Structure: Employees- Employees must, at the very least,
receive minimum wage for hours scheduled to work. Employers must withhold a
variety of income based taxes and pay portions of the taxes for the
employee. Employers must follow federal
and state laws related to employee relations mandated by the Department of
Labor and safety related to the mandates of the federal agency of Occupational Safety
and Health (OSHA).
Structure: Independent Contractors- Independent contractors
are self-employed. Instead of having an independent office setting independent
contractors will essentially rent space from another professional (like a
chiropractor or spa owner) and provide massage services as a cooperative system
of care for shared clients. Independent
contractors typically pay the facility /business a percentage of the massage
fee charged in exchange for massage room and other shared services such as the
receptionist. Other than this relationship there are no other financial
obligations. It is more like a rental agreement.
Function: Employers
--- Employers are responsible for all facility liability, costs (overhead)
marketing and general business operations.
The massage therapist employee is only responsible for job description
duties such as providing massage services, maintaining workplace policies. Employees are provided all supplies and are
held accountable for professional behavior and job performance. Employees can
be paid an hourly wage, hourly plus commission, by the service provided but the
hours worked divided by the wages received must never be less than minimum wage
and at year end the employer must provide the employee a tax related form
called a W-2
Function: Independent Contractor----There is absolutely no
obligation on the part of the business owner to pay any sort of minimum wage,
guarantee any income, and withhold any taxes.
The independent contractor cannot be told what hours to work, what to wear,
how to behave. The massage therapist function as an independent contractor must
pay all taxes and the percentage paid to the business owner is handled as a
business expense.
A huge issue in the massage community is that business
owners who engage in independent contractor relationships with massage
therapist treat the massage therapist as an employee and to add to the
confusion, the massage therapist thinks they work for you. They do not.
Massage therapist functioning as independent contractors
often report earning by what they charge for massage. This is the foundation of
the confusion between independent contractor earnings and employee
earnings. Massage therapist functioning
as employees earn an hourly wage and/or a commission and are not in a business
for themselves. An hourly wage is paid regardless if massage is performed. Independent contractors only earn money when
doing a massage and then that income is gross income from which business
expenses are deducted such as the percentage paid to the contractor of the
massage therapist.
First I will address those who contract with massage
therapists.
•
Please be clear about the relationship with the
massage therapist. Many think you are
hiring them.
•
Please be ethical in the relationship and do not
treat the independent massage therapist as an employee.
•
Please be clear with the massage therapist about
what type of professional relationship you want to have. Clearly define the expectations you have for
behavior, skills, scheduling, cleaning duties for the rented area,
responsibilities for shared services such as receptionist and advertising.
•
Please be clear with the massage therapist about
what type of interactive networking you expect such as interoffice referrals.
•
Do not indicate in any way that you are paying
the massage therapist a wage. Even if
the receptionist collects the money for services rendered remember the check
written back to the massage therapist is what they earned as an independent
contractor with the fees deducted for facility use and shared services.
•
Do not treat independent contractors as employees
Now Employers:
•
Be patient and diligent about explaining the
wage pay structure. It is confusing when
there is a wage baseline and then a commission for services provided. A sales
commission is a sum of money paid to an employee upon completion of a task,
usually selling a certain amount of goods or services.
•
Employers sometimes use sales commissions as
incentives to increase worker productivity. Some employees work on commission,
either in addition to a salary or hourly wage, or instead of a fixed salary or wage.
•
Please be very clear when explaining to massage
therapist employees how pay is figured. Is it base wage plus commission, base
wage or commission whatever is higher, commission only so long as it meets or
exceeds minimum wage.
•
If the employment environment is conducive to
gratuities than make sure massage therapy employees understand how the tip
system works. And yes is would be appropriate to have either a lower base wage
or lower commission than in a non-tipping environment.
Employers
please consider paying wages as follows: Hourly base of minimum wage+
commission per massage performed and add-on provided.
Massage therapist employee AT ENTRY LEVEL paid hourly
+commission.
Example: $8. 00 per
hour + $12.00 for every massage given + $3.00 or every add-on (i.e. essential
oils, paraffin dip) + an expected 15% gratuity per massage provided. Base salary 40 hour workweek $16320.00
+commissions based on 5 massage sessions per day $15000 = 32,000 + tips $2500 = $34,200 before taxes.
Cost to employer $42,000.
This is a fair and viable wage. This pay schedule allows for
pay increase for additional training, experience and loyalty. For example commission can incrementally be
increase to as high as $16.
Also employers, it is reasonable to expect, using this type
of pay schedule that employees perform other tasks if not performing
massage. These tasks include
housekeeping, laundry, some types of marketing based activities and so forth. It is not necessary to pay people to only
sit.
OR--- Pay as follows:
Employee pay based on straight hourly wage:
Massage employee in a pain clinic would likely receive an
hourly wage of $12 (entry level) -$15 ( experience) per hour plus some benefits
such as sick days or access to health care insurance. No commission on massage
sessions provided. No gratuities. Yearly income before taxes for full time 40
hour work week = $ 28,000-30,000 per year plus $3500.00 benefit package. Cost to employer $42,000.
For Example:
Massage therapist employee AT ENTRY LEVEL paid hourly or
commission whichever is higher.
Example: $8.00 hourly =minimum base of $16,320. Commission $15 per massage at 5 massage
sessions per day, 5 days a week = $18 750.00 +
15% gratuity $2500.00 tips =$22,000.
Cost to employer $26000.00 ----Does not generate a viable wage. This is where the problem occurs
Make sure than employee understand that they can contact the
Wage and Hour Division of the U.S. Department of Labor in order to file a
complaint against his or her current or former employer. The Wage and Hour
Division is responsible for monitoring employers’ compliance with the FLSA and
related laws in terms of employee compensation.
Working Conditions:
•
The massage treatment rooms need to be at
minimum 9’ x10’.
•
Do not expect the massage therapist to perform
more than 7 actual massage hours in an 8 hour work period.
•
Schedule massage sessions 15 minutes apart.
•
Provide 60 minutes of breaks during an 8 hour
work period- such as two 15 min. breaks and a 30 minute meal break. Note:
depending on state law employers may not have to pay hourly wage for meal
break—but a good employer will.
•
Do not expect massage therapists to up-sale for
products or services. Use specific sales staff or receptionist to do this.
•
Make sure the receptionist is fully trained and
can explain massage services.
•
Make sure the receptionist does not exert
favoritism during scheduling.
•
Make sure that front office staff is respectful
and service oriented.
•
Make sure that the facility is safe.
•
Do not allow gossip, drama, workplace
relationships and other detrimental group dynamics.
•
Do not allow a difficult person to disrupt the
work place- client or employee.
•
Make sure you have a for real massage expert on
staff that is committed to being current with massage research, the political
environment and trends in massage.
•
Expect that you will have to provide in house
training for new hires. Education around the country is too uneven to expect
consistency. You can pay less during
this training period.
•
Use recorded training DVD's to set expectations
about what massage draping, protocols and add-ons should be like and gage
performance against this standard.
Otherwise there is too much opinion involved.
•
Do not expect massage therapist to perform like
robots. Each will have some individual
skills but you can expect the each massage therapist provides a massage session
that reflects the integrity of the business model.
•
Make sure that employee concerns are
addressed. Communicate openly with
employees and have at least a monthly staff meeting.
•
Have a suggestion / complaint box and pay
attention to each issue.
•
Do not hire more employees that demand requires.
Make sure each massage therapist is
booked before adding staff.
•
Expect that a massage therapist should have
retention clients after 6 months. If they do not then something is lacking in
their performance. You do not have to
retain an underperforming employee.
•
Be more patient with client retention for male
massage therapist. There is a gender bias in the massage profession. Make sure male massage therapists are
supported.
•
Make sure that all information about massage
dispensed is accurate. Do not perpetuate myths.
•
Make sure massage therapists are working smart
by offering support for ergonomics and biomechanics.
•
Managers must be present and a positive link
between employees and owners.
•
Reward excellent employees. Provide support for
ongoing education.
What is a Massage Franchise?
This blog is advocating for the massage therapist working in
a massage franchise business even though it might not appear that way in the
beginning.
There are frequent mentions on social media about franchises
that provide massage therapy services and most not supportive. Recently I have begun to wonder how many
individuals understand the franchise business model. Let’s explore this topic like a massage
session: General –Specific-General.
GENERAL
A franchise is a way to do business. Franchising is a
business opportunity that's somewhere between buying an existing business and
developing a business from scratch.
The franchisor is the person or persons who did all the work
from scratch to develop a successful business operations model.
The model is the franchise when the originator then sells
the model to others who want to do business the same way.
The person(s) who buy the business model is call the
franchisee. In exchange for an initial
set-up fee and a monthly payment, the franchisor provides the franchisee a
business model, marketing supplies, staff-training assistance, managerial
consulting and brand awareness.
A short way to restate this information is:
A franchisee buys a license from a franchisor to be a dealer
of that business model (franchise). The owner of the franchise sells a product
or service through its franchisees.
There are many advantages to the franchise business model.
Franchising is a strategic alliance between groups of people who have specific
relationships and responsibilities with a common goal. A network of
interdependent business relationships is formed that allows a number of people
to share:
•
A brand identification
•
A successful method of doing business
•
A proven marketing and distribution system
There are downsides to franchising as well. It costs money to buy and set up the
franchise business. There is a onetime
fee paid by the franchisee to the franchisor to "buy into" the
franchise. The initial fees typically range from $35,000- $45,000. That is a
lot of money. Generally, the fee reimburses the franchisor for the costs of
initial training and support for new franchisees. Next the location must be
rented or purchased and then remodeled, equipped and supplied to fit the
franchise facility design. For example: we all recognize how a McDonalds
building is designed. This part of the upfront money is really a lot ranging
from $100,000 to over a million dollars.
Then about a year of operating costs must be available. That is
expensive too. The point is that the
franchisee has to invest A LOT of money to get the business up and running.
Here are a few massage therapy examples of how much it can cost to buy, build,
and open.
•
Massage Envy Spa $413K - 939K
•
Elements Massage $212K - 387K
•
Massage Heights $258K - 606K
•
LaVida Massage $160K - 290K
•
MassageLuXe $196K - 397K
•
Hand and Stone Massage and Facial Spa $394K -
489K
http://www.entrepreneur.com/franchises/rankings/franchise500-115608/2015,-3.html
In addition to all the overhead costs to operate the
business there are additional ongoing fees related just to being a franchise
business. For example:
Royalty: A royalty refers to a percentage of gross sales
paid to the franchisor monthly. Typically the royalty rages from 5-10 % of
GROSS sales.
Advertising Fee: An annual fee paid by the franchisee to the
franchisor for corporate advertising expenditures; usually less than three
percent of the franchisee’s annual sales and usually paid in addition to the
royalty fee.
Staff are employees: This means that the business owner must
pay at least minimum wage for every hour worked and all matching taxes as well
as other federal and state mandated withholding.
•
Social Security and Medicare Taxes
•
Federal Unemployment Taxes
•
State Unemployment Taxes
•
Workers Compensation Average (varies by
industry)
A conservative rule of thumb is to add 30% to an employee's
wages to calculate the total cost to the employer. So if someone is paid $10.00
an hour the cost to the employer is $13-$14 per hour and about $550 for a forty
hour work week. ( remember-- if self-employed YOU have to pay those taxes)
If there are 10 employees working each shift and the
business has two shifts that means that the weekly payroll is about $12,000.00.
If the cost of a service is $40.00 then 300 services a week must be sold just
to pay payroll.
SPECIFIC
Massage Franchises.
As an employee in a massage franchise business you have to
have the whole picture to understand why things are done the way they are done
and why the pay rate is the way it is.
Each of the franchise models is more or less the same.
Really does not matter which one. Some
have higher services fees for the massage or maybe an additional service and some a bit
lower. A middle range initial investment
of the franchise owner is about $350,000 plus a year of operating costs.
$500,000 as a commitment is reasonable.
Before that franchise owner makes any money, the business must earn back
$500,000. Let’s also use an average of
$50 as the amount paid for each unit of service—a massage. The business must sell 10,000 massage
sessions. –That is a lot. Full time massage
practice ranges from between 1000-1200 massage sessions a year. At the same time and for ever after, the
business must generate enough gross income to pay all expenses BEFORE the
franchise owners get any profits. This amount can range from $ 250,000 a year
to $350,000 a year—about 6500 service units ($50 massage sessions).
It is time consuming and expensive to train new employees
and turnover in the franchises is huge. There are not just massage therapists
to pay, but also receptionists and housekeeping, management, repairs and
maintenance staff. In the massage franchises the product is quality massage
therapy. It is hard to find dedicated
massage therapists.
What should a massage therapist be paid?
Based on educational and responsibility similarities when
compared EMT(emergency medical technicians), medical assistants,
cosmetologists, all of who have more training than massage therapists at the
current 500-625 hour standard, $25,000 a year at entry level for a 40 hour work
week to $38,000 a year for an experienced massage therapist working a 40 hour
work week.
A 40 hour work week is 2040 hours of work per year. You would need to provide 25 -30 actual
hours of massage during the 40 hours or at least 1400 hours of massage per
year. Now remember, the low end pay of $
25,000 earned per year costs the employer an addition $7500 in taxes you would
have to pay yourself if self-employed.
So actual yearly wage is really $32,500.
If the cost of each massage is $50 you have to provide a
minimum of 650 massage sessions per year just to pay your wages. In addition,
all the other overhead operating expenses must be paid. I typically teach 30-50
percent of gross must be allocated to pay these bills so- $12,000- $14,000 in
the mid-range (I used about 40% of $32,500). You have to earn this just to have
a place to work- whether self-employed or employee. And as an employee, the
operating expense amount is lower because others are sharing costs. This is another 250 massage sessions at $50
each. So when working at a franchise you have to do 900 massage sessions before
the owner makes ANY money off of you IF you want to earn $25,000 a year.
REALITY CHECK--- And this is based off of $50 per massage.
Most unit sales will be less than the $50 because of member discounts, coupons,
specials, etc.
Also, the franchise environment is typically a place where
massage therapists receive gratuities/tips which can add $7000-$10,000 to the
income per year.
If massage therapists were paid a flat $15 per hour for a 40
hour work week, the yearly income is $30,600 which costs the employer $40,600
in payroll and another $12,000 in operating costs. So the franchise owner has
to cover about $53,000 of expenses if they pay $15.00 an hour. That is 1375 hours of massage per year
working 40 hour work weeks and based on figures of actual massage hours of 1400
per year (even though you are getting paid for 2040 hours a year).
Soooo-the profit to the owner on this model of employment is
based on 25 units of service at $50 or $1250 a year. If that owner has 15 massage therapists
working full time, yearly profit margin is about $20.000 and that is less than
what each massage therapist makes. I
wouldn't take all the risk for this type of profit. Would you?
Quite a different picture isn’t it. These figures are within
a realistic range and based on maximum schedule. What happens when there are no shows or a bad
weather day?
This is a tough cookie to eat. A lot of people have their fascia in a
twist. The franchise model is miss
understood in the massage community. This is unfortunate. What are the solutions?
Paying employees less for sitting around when not doing a massage and charging
more for the services hoping there is enough volume. The massage franchise
membership model was originally based on affordable massage for the masses. The
average yearly income is around $35,000 per year. The most a massage can cost
to serve this majority of the population is $50 with the tip. That means the price point cannot be much
more than $45 per massage and that only buys one massage a month which in
really not enough to gain the health benefits massage can provide. Volumes will likely decrease as the cost of a
massage exceeds $50. $40 per massage is a better price point for client
retention, multiple massage session and volume. So much for raising the price of services. Owners do better than the $20,000 profit
mentioned earlier. They work off of volume and often own multiple businesses. There are product sales and add on
services. Paying the low rate for
sitting helps the profit margin. Still being a franchise owner is not the huge
money maker many would think and the intent is not to work massage therapists
to the bone and treat then badly.
GENERAL
You will make the most money as self-employed massage
therapist going to client’s homes or places of work. You will have to charge a minimum of $75-$100
for each massage session provided. This
fee is out of range for the majority of people but there are some who can
pay. You will have to gross at least
$80,000 to net $50,000 and you have to pay your taxes on the $50,000. It takes at least 3 hours of time to provide
a 60 minute massage on site. With all the driving around and set up and take
down time 3- 4 sessions a day or 15 -16 sessions is the max you can do within
the 40 hour work week. You can gross
$75,000-$80,000 a year—but you will only make $35,000-$40,000 a year after
paying all taxes and operating expenses and with a mobile business there is no
facility rental. You still have to do
all the laundry and everything else. You will make-if no one cancels and you
are booked full 51 weeks out of the year (I week vacation)- maybe $18 an
hour. Thank goodness most massage
therapists are motivated to walk a path of service. In 2014, the average annual
income for a massage therapist (including tips) was estimated to be
$22,165.6--Released February 13, 2015 © American Massage Therapy Association
2014.
You can do much better than that at a well-managed
franchise. Most massage franchises are well managed, but not all. If you are
working in the franchise system and the managers and owners are not doing a
good job keeping up their side of the business----and if you are a good
employee-- meaning appropriate business behavior, good retention rate for
clients and want to be part of the solution---then diligently identify the
problems as you see them, write them down with potential solutions and
respectfully present to the franchise manager.
If that does not work go to the owners and if there is still no
improvement to the Franchise corporate offices.
If you are motivated to complain, gossip and generally
contribute the problem then quit, go into business for yourself and get a taste
of the real world. If you do not like
all the standardization, rules and pay
then go to work for yourself. If
you are a quality massage therapist dedicated to service then you will have a
full schedule and won’t be sitting around making $8ish an hour. If you are sitting around and not getting
retention and client rebooking then take a good look at your professional
behavior and skill set.
Success is a team effort- It begins with the motivation to be a massage therapist. Then the choices made for education because the quality of the educational experience will prepare for the career implementation. Choosing where to provide massage support career satisfaction. A sincere massage therapist, teachers that strive for excellence and work settings where all understand the pros and cons and are based on a win-win relationship is the whole package.
