Falon Miller asked:

I will be starting my own massage therapy business, how do I advertise to get my name out there? And how much per week or month or client even, do I need to put aside for taxes? What can I claim as a business expense or should I keep all my reciepts for everything?

answered:

The fact that your business will be in an alternative healthcare field adds some complications that you won't find in every industry. As a massage therapist the first thing you need to find out is whether massage therapy is regulated at the provincial level where you live.

If you are located in a province that regulates massage therapists then you may find that you are obliged to follow very detailed guidelines for keeping financial and client records. For example, in Ontario the Massage Therapy Act, 1991 - O. Reg. 544/94 identifies exactly what financial and client records must be kept for each client.

For this reason and because an expert may be able to help save you hundreds if not thousands of dollars by giving you good direction at the outset, my first recommendation with respect to the finances of your business is for you to get some expert assistance. There are two resources that should be able to help you, either the association for massage therapists in your province or an accountant who is familiar with your industry.

In either case, you can save yourself time and money by doing some research before an actual meeting and preparing a list of the questions that you need answered. The advantage of meeting with an accountant is that you can also get help optimizing your personal tax situation and determine how much you will likely have to set aside to pay your personal taxes.

Understanding the basics of business taxes
To gain a general understanding of what items are deductible in a general business and what taxes you will need to pay, I would highly recommend that you visit these three links:

Help! What Taxes Must I Pay?
http://www.canadaone.com/ezine/jan05/canadian_tax_basics.html

Canada Revenue Agency: Business Expenses
http://www.cra-arc.gc.ca/tax/business/topics/solepartner/businessexpenses/menu-e.html

GST and Government Regulations
This bulletin provides good tax information specific to massage therapists. It is published by the College of Massage Therapists of BC, but provides some good general information as well. http://www.cmtbc.bc.ca/article_61.shtml

What are valid expenses?
When keeping track of your money you will need to learn:

• Which items are deductible - this is a good resource: http://www.cra-arc.gc.ca/tax/business/topics/solepartner/businessexpenses/menu-e.html.

• What records you need to keep, especially for items that will be used for both business and personal use (for example, you may need to keep a log of the mileage for your car). You may have additional requirements set by provincial regulations.

• Whether something you purchase is something that you can a) claim as a business expense or b) will become a business asset, in which case you would only claim the amount by which the asset depreciates each year as an expense. (An asset is something that is not consumed within a year, such as software, computers, furniture and vehicles. Paper, office supplies and things like massage lotions would be expenses for your business as they would be consumed in the regular course of your business.)

Keeping track of your money
I would also recommend that you get an accounting program to help you manage your money. There are two products that should meet your needs right now: Intuit's recently launched EasyStart (which costs about $50) and Simply Accounting's Simply Accounting Entrepreneur (which costs about $100).

If you are not comfortable with basic bookkeeping tasks then I would highly recommend that invest in a few hours of consulting from a Quickbooks or Simply Accounting advisor. They will help set-up the basic structure of your accounts and can show you what you need to do to enter information in the software. Remember, this will cost you a bit now, but it is a very sound investment.

Advertising
Depending on how your industry is regulated where you live you may find that as a massage therapist there are specific restrictions on what you can say in an advertisement. This may influence how you decide to market your services.

Since you will be targeting potential customers in a limited geographic area you will find that there are a number of low-cost, high impact ways for you to advertise your business.

You will learn over time which advertising methods work best for your business. To help you get started as effectively as possible, consider doing a small survey to identify how people select their massage therapists and what is important to them when making that selection.

There are many tactics you can use to advertise your business, from sending out flyers and putting up posters to advertising in publication your customers are likely to read. Word of mouth referrals are always ideal, as they are free and are more readily trusted. Another thing that works well is to develop relationships with non-competing businesses who work with customers in your industry where you cross refer each other.

In advertising, repetition and reputation are important. Repetition will ensure that people start to remember that your company exists, while reputation will be important in the selection of a therapist. Client testimonials, therefore, are extremely valuable.

Incentives can also be a great way to bring in new clients, especially when a business is just getting started. Some possibilities include a straight reduction of your fee for the first appointment or offering a package - for example 3 massage sessions - at a discounted price. Incentives should be combined with your other advertising efforts and work best when they have an expiry date, as this creates an incentive for someone to act on the incentive since it is only available for a limited time. You will often see restaurants offering a 2 for 1 dinner special that expires within a 6-8 weeks of the date the coupon was issued; these are often included in coupon packs distributed to people with a specified postal code.

Again, I encourage you to check with the association of massage therapists for your province to see if they have guidelines and restrictions for advertising massage therapy services.

I hope this has been helpful and wish you great success with your new business.

Yours truly,

Julie King

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