Successful Business Handbook

Associated Bodywork & Massage Professionals

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financial health profit per hour The single most useful number you can know as a massage therapist is how much profit you make per hour of session work. Create An Income Statement The first step is to create an income statement showing your actual profit (or loss) for a recent, and hopefully typical, month. If you (or your bookkeeper) use accounting software you can easily generate a monthly income statement. Otherwise, you will need to subtract the sum of your total business expenses for the month from the sum of your total business income for the same period to arrive at your total profit (or loss) for that month. To get from monthly profit to profit per hour is easy: take your total profit (income minus expenses) for the month, then divide it by the number of hours you worked (don't include trades or pro bono work, only paid sessions). This is your profit per hour. Knowing this number is helpful when making purchase decisions for your business, whether you're buying new MP3s or a new computer. Is a double album worth two hours of work? Is a new computer really worth 80 hours? If you make these decisions calculating your full session price, you're fooling yourself. Big time. Just remember this number is only as valid as the income statement it comes from. In reviewing dozens of business plans, most overinflate their profits because they underreport their expenses. This is especially true when practitioners combine personal and business expenses, often using the same checkbook for both. Don't do it. You'll never know whether you're really making any money in your practice. Your actual per-hour income may come as a shock and a disappointment to you (it often does). But even if it seems reasonable or even generous compared, say, to someone else's hourly wage, remember that they're probably working 40 hours a week, and you're probably not (I hope) doing 40 hours of sessions. The Numbers Change Profit per hour will change over time and usually not for the better. Expenses tend to creep up with inflation, while your session price can stay the same for years. Recalculate this number at least once a year and even more often if you're having doubts about your current pricing. Financial success depends far more on consistent good decisions than anything else. Knowing your profit per hour is a great help in making them. They may not always be decisions you like, but they'll be decisions with which you can live. SPH

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