One of the basic requirements of establishing a massage therapy business is estimating your expenses so you can create a budget. You should estimate expensese when you first start your practice, as well as when you review your budget on an annual basis.
Types of Expenses
Take some time to consider all the things you spend money on for your practice, both on a monthly basis and those items you might only need once a year. Havng a good idea of all of your expenses is important for getting an accurate picture of your business. Following are some general categories you'll likely need to think about:
- rent/mortgage payments for your practice space
- merchandise you plan to sell
- loan payments, such as school loans
- telecommunications, computer lines and utilities
- professional services, such as attorney and accountant
- taxes (property, business, income)
- insurance (liability, disability, health)
- membership fees
- continuing education
- professional publications and subscriptions
- laundry services
- equipment purchases
- employees' pay
- marketing communication pieces, such as brochures, signs, business cards and advertising
For expenses that are one-time or occur only once a year (such as marketing materials or conferences you attend), you can add the total for that expense in the month the event occurs or divide the total by 12 and add this amount to your monthly expenses. Your decision depends on whether you want to (and can afford to) take the total from one month or need the benefit of budgeting smaller amounts every month.
Keeping Track of Expenses
When beginning a business, you should keep track of all expenses and compare them to your budget at least monthly, if not weekly. If you have underestimated or overestimated expenses or revenue, the difference could affect your estimated tax payments.
Keeping a close eye on how your actual expenses and revenue compare to your budget also allows you to make adjustments as necessary. If expenses are too high, you will have to choose where they can be reduced (or how you can boost your earnings to help offset higher expenses). If expenses are not as great as you had estimated, you might choose to spend more on advertising or take an additional continuing education class as an investment in the growth of your business.