41 Whitter Way
Millen, TX 73301
This business plan is for a massage therapy practice. The need for this practice was identified after a key piece of state legislation changed, and anyone injured in an automoblie accident was required to undergo treatment.
Over a span of 15 years Gavin Cheney had worked in various medical practices as an office manager. Never really getting any training on the medical profession, Gavin enjoyed working for others in the field. Then the state where he works and lives changed a fundamental part of the automobile insurance business, where anyone who was injured in an auto accident was required to have treatment. Gavin saw this as a great opportunity to start his own practice. After a number of conversations with his medical contacts, he decided to open his own massage therapy practice.
Millen, Texas is your average little city with a population of 150,000 people. There are three major hospitals in the city limits and there are seven massage therapy offices listed in the phone book. After calling all massage therapy places to get their pricing structure for competitive reasons, it was determined that only six were still in business and of the six only four were licensed by the state health region. While this type of service does not have to be registered to operate in the state, we have determined that we will only hire registered staff for our clinic.
Approximately 14 months ago, the local automobile insurance association had adopted a no–fault insurance plan, where the injured in an automobile accident could not sue for injuries unless they went through a complete health check with the local medical staff of various backgrounds, one of them being massage therapy. With this new focus on rehabilitation, we have determined that the steady stream of new revenue from this new source would be financially worthy of an investment into this new business.
After studying the market we have found out that there is no place where a client can go to get a multifunctional discipline approach to their health care or recovery. Based on health region statistics, there are 1600 visits per month to the present seven massage therapy clinics, with an average cost of $30 per visit. This amounts to monthly revenue of over $6,500 per clinic just for massage therapy and does not include revenue from other types of therapy. The average clinic has two staff working either full or part time and some on a flexible schedule. One clinic has 8 staff; however this clinic offers other types of therapy services.
Fees Charged for Massage Therapy
- 15 minute session—$19
- 30 minute session—$39
- 60 minute session—$75
Fees Charged for Physical Therapy
- Standard Physical Therapy—$60 per hour
- Water therapy—$75 per hour
- Physiological therapy—$100 per hour
Of the seven listed in the phone book, only two have set up strategic alliances with hospital medical regions as a referral. The reason for this is simply the hospital only refer to credited clinics and of the seven only two have been accredited. We will be accredited so we will get these referrals.
We have already been in talks with various medical practitioners and have determined that there is solid foundation for our clinic model in this region. While our main focus will be to run the massage therapy clinic, we will also receive income from our other partners in form of shared office rental and a small per–client booking fee.
Some of the services set up in our region are as follows:
- Massage Therapy
- Physical Therapy
- Mobility Therapy
- Water Therapy
- Gym Therapy
- Mobility Therapy
- Physiological Therapy
- Driving Therapy
- PDSD Therapy
All of our staff will focus on the massage therapy and the other types of therapy will be contracted out to third party professionals who meet the required certifications. The prices charged for these services will vary based on the service. Our fee will be the same for each client we book for one of these therapies.
- Massage Therapy—$75 per hour.
- Physical Therapy—$80 per hour. Our fee is $9.
- Mobility Therapy—$40 per hour. Our fee is $7.
- Water Therapy—$70 per hour. Our fee is $7.
- Gym Therapy—$70 per hour. Our fee is $7.
- Mobility Therapy—$50 per hour. Our fee is $5.
- Physiological Therapy—$100 per hour. Our fee is $8.
- Driving Therapy—$40 per hour. Our fee is $5.
- PDSD Therapy—$120 per hour. Our fee is $14.
- Acupuncture—$80 per hour. Our fee is $12.
- Aroma Therapy—$40 per hour. Our fee is $7.
- Riekie Therapy—$40 per hour. Our fee is $8.
Because we have set up this clinic as a limited liability corporation, the owner will not be personally responsible for any activities of the therapists who operate out of this location.
The hours of operation will be from 9:00 am to 6:00 pm Monday through Friday and half days on Saturday. The contract therapists can book appointments outside these hours as required.
At this location we will have a main reception area consisting of a nursing station counter area, eight to twelve chairs for clients, a coat rack, a coffee table and a book shelf containing various handouts and info for clients to read while they wait.
There will be a total of eight treatment rooms, complete with an adjustable bed, chair, wall charts of the human body and small drawer cabinet for storage.
The main gym area will contain a variety of gym equipment as listed below.
- Four stationary bikes
- Three flatbed weight machines
- One hamstring exercise machine
- Four treadmills
- Complete set of weights
- One traction bed
- Ten various sized balls for lumbar work
- Two heart rate testing machines
- Two tables for treatment of various therapies
- Water cooler
- Rowing machine
- Hot tub for water therapy
- Two low level bikes
- Various mats for doing floor exercise
- A variety of treatment devises like the thera band, Jhook, and Tens Machine
We have held extensive conversations with medical professionals and have determined that the first floor of 41 Whitter Way is an ideal location. It is central to all three hospitals, therefore allowing for easy access for our clients from these locations. Also this location is centrally located in the city and has easy access to the bus system and the go train.
The key to the location is parking and the bus station is only about 20 yards from the front door and is based on the ground floor of the eight–story building. One of the other bonus features of this location is the fact that inside there are numerous our medical professionals and specialists set up, as well a lab and x–ray clinic.
We will be leasing around 12,000 square feet of this unit and will pay a flat net rent of $1400 per month over a 5 year term. Considering the location this is fair. Also as part of our negotiations we were to have the landlord pay for leasehold improvements in the amount of $20,000.
Also there will be a wheelchair ramp installed in the side door, allowing for easy access for all of our clients. The ramp is basically a cement ramp to cover the four–inch gap along the sidewalk.
All staffing will be trained in their area of expertise; we will not hire anyone who does not have certification in the right areas.
There is a college in the region that every year has a lot of graduates. We will fill our open positions from these qualified students.
For the professional contract positions we will contract out to the right professionals in the region.
While we realize that some of these openings may not be filled on the day of opening we may not have all the openings filled. That will be fine, as we want to make sure we bring in the right professionals and do not want to be in a rush.
The front counter staff can be trained on office administration or doctor's office administration, which will be fine for the type of work being performed.
- Front counter—$1,500 per month
- Massage Therapist—$3,700 per month per position. Two positions total $7,400 per month
- Accountant—$2,300 per month
- Cleaning and basic repair and maintenance (Contract cleaner)—$400 per month
- CEO—$3,500 per month
- Total—$15,100 monthly payroll expenses
Because all other positions are contract and are not employees we will not put them in our books as an expense. The only item recorded for these positions will be the revenue we receive every time we get a booking; we will only record the revenue share we receive and not the revenue the client will pay us.
Other Operating Expenses
- Office Rental—$1,400 per month
- Telephone—$200 per month
- Office supplies—$250 per month
- Gym supplies—$400 per month
- Parking fees—$240 per month
- Utilities—$450 per month
- Advertising—$700 per month
- Yellow page ad—$400 per month
- Total—$4,040 in monthly operating expenses
Revenue & Income Projections
Our monthly income and expenses will come from several areas:
- Revenue from our own staff will be $234,000 per year. This was determined by having two therapists working six hours per day for five days a week. At the hourly rate of $75 per hour, this figure totals $4,500 week for each of 52 weeks of the year.
- Revenue from other professionals we contract out will be $96,096 per year. This was determined by having seven therapists working four hours per day for six days a week. At the average hourly rate of $11 per hour, this figure totals $1848 per week for each of the 52 weeks of the year.
- Revenue from flat fees charged for each professional will total $22,500 annually. Each professional will be charged $125 per month that will result in monthly revenue of $1,875 (15 therapists each paying $125 per month).
While we have attempted to base our income streams on best guess, we have determined that the number we provided here are on the low end and will only go higher. Review of other message therapy clinics nation wide have shown that the revenues are actually much higher than what we have projected.
Based on the above numbers, our total projected revenue is $352,566 for the first year. Our total projected expenses for the first 12 months is $229,680 plus the operating line of credit interest expense of $6,000 annually.
- Gym equipment—$25,600
- Legal fees—$1,200
- Office supplies and furniture—$4,500
- Rent and damage post—$2,800
- Office computers and equipment—$5,900
- Advertising and brochures—$1,200
We signed the lease on October 10, 2004; the landlord has 40 days to have the leasehold improvements completed. We estimate that by November 20, 2004 we will be able to move in. We will budget two weeks to get equipment set up and our systems in place. We will budget four weeks to run open houses for the medical profession and insurance industry, allowing them to see our facility.
On January 1 2005, we will start to accept clients. By then all our staff will be hired and we should have a few contract professionals hired.