60/40 Splits

I've started working for a Chiropractor part-time and we're doing a 60/40 split where I keep 60%. I know this is the industry norm and I do think I'll be busy in his office. But when I think about the fact that, should I reach my goal 15 massages/week in his office I'll be paying out $17,000 annually, I start to rethink my decision. Right now I pay rent for a room for the other part-time use and I pay $200 month and bring in close to $1500/monthly. I know that businesses need to make money, but I work hard for my clients and feel that a $17,000 contribution to someone else's business is a bit extreme. I keep my overhead to a minimum, try to reschedule all of my clients myself and only use his scheduling system b/c he won't let me use mine in his office. I do all of the laundry at home, offer more discounts in his office than I do on my own and am expected to pay for marketing. Can anyone who has done a split - either as the owner or the independent contractor - help me understand better why it might cost me close to $20,000/year to work?

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  • up

    Gordon J. Wallis

    Well everyone deserves to make a living..  That being said.. A skilled massage therapist has way more to offer the general public then any chiropractor in my opinion...Most patients in those offices seem never to get better..  Patients are suing, lawyers are involved..Insurance is continually billed... Not a healing environment in my opinion..  If you cant substantially help someone within four sessions..you are ripping them off.  I personally prefer working alone or in a spa or hotel setting.  People get well way faster.  My experience anyway.

  • up

    Relax & Rejuvenate



    Alyson Schlobohm said:

    Dear Relax & Rejuvenate,

    I care about how much the "chiro is making" because he is NOT the one making the money. I'm the one in the room with the patients doing manual labor, offering my suggestions, advice, feedback and strategies for the patient to save money while improving their physical well-being. I am the one building client relations and I am the one that makes the client want to come back and see me.

     

    If he did not invest $200K in chiro school, a lease, advertising, equipment and building HIS clientele there would be NO room for your to rent, clients to offer suggestions/feedback to, etc.

     

    Does a dental hygenist care how much the DDS earns? She does 90% of the clearning, but gets far from 60% of the fee.

     

    You are valuing your work more than you are valuing the risk and work of the DC. Anyone with a license can give a massage -- not everyone has enough clients to give them to. If they did, there wouldnot be half the threads on this board, including this one.

    It appears from your attack-mode sort of response that you're probably on the other end, where you're collecting a percentage of EVERY massage that someone else performs. Your line of thinking is exactly what I feel is wrong with the massage industry and why I feel that so many MTs get burnt out and leave the industry - they are getting by because they're making a decent salary, but they soon realize that they're working really hard for someone else to reap benefits and there's really no way to move up, because once they reach their maximum number of massages per day and week, they've capped out on all they'll ever earn. Most of us don't get benefits, hourly pay or raises. Most of the time laundry is done at home, which causes an increase in our own personal electricity and water bills, and decreases our "hourly" rate - as does time spent marketing, tracking mileage & expenses, answering client questions and emails, etc. 

     

    If you don't wan to work hard for someone else, then work for yourself. It's that simple. You have identified me, and my like-minded evil-doers, as the source of the problems with the massage industry. What you have jnot posited is a solution -- other than the obvious, start your own practice.

     

    Just to give you an idea of what wrong-thinking economics looks like, lets take a look at the P&L of a basic spa operation

    We have a 3 treatment room spa, with two nail stations in a town of only 50k people

     

    Fixed Costs -- these I have to pay regardless of how many clients I see. Bad month --- too bad, still have to pay

    Rent -       $4,500

    Utils -        $1,000

    Insurance - $750

    Equp Lease - $600

    PCs & software - $450

     

    Total -- $6,250   --- open for business 24 days a month, 8 hours a day = $31 per hour. If ALL 5 rooms and nail stations are booked 8 hours a day, then it costs $6 PER TREATMENT to cover fixed costs. Most spas run 35% utilization, so that triples the per treatment cost to $18.

     

    $95 - average hour of treatment

    - $18 - fixed costs

     

    Less per-appointment costs

     

    - $5 - laundry

    - $5 product costs

    - $5 average discount (which does not affect therapist pay as is our policy)

    - $2 credit card processing fees

    $17  + $18 in fixed costs = $35 before technician pay and benefits or $60 operating revenue

     

    Using your 60% / 40 split that you think is so horribly unfair, that would be $57 to the therapist and only $3 to the owner  -- and that is before paying the employee payroll taxes -- which also apply to therapist tips (I have yet to receive a tip for hiring and training such wonderful therapists, yet, I have to pay 10% on top of the clients tip in taxes and cc processing costs -- so a $20 tip wipes out $2 of my remaining $3) Oh, and let's not forget paid vacation and health insurance taht we offer our employees -- so that means I am taking money out of my pocket to pay MTs to come to work just so they don't feel bad about themsefvles for not being paid some mythical percentage of what is fair...I would be financially better off not starting the business than employing ANYONE at 60% commission. Or even 40% commission.

     

    Whose the greedy, evil expoiter now? I put up all the money, take all the risks and the government require I pay you for every hour you are at work, whether there is an appointment or not.

    If a percentage is meaningless and a relative number, then why IS there a percentage taken out of so many MTs paychecks? Why isn't there a flat fee per month, referral, etc.? 

    Because people -- business owners and technicians -- are too set in what other poeple do and some mythical sense of fairness to think about compensation schemes any other way. You can be paid hourly $ + % commission, you can be paid a flat fee for service, or you could be paid a straight salary regardless of if you do 1 massage or 7 massages in a day (I have yet to meet the MT willing to work for salary).

    I do not understand at all your reference to getting paid 100%. Would I be happy with that? Sure! Do I think that is the solution? Of course not. What do complimentary services from the media have to do with anything? If someone wanted to come to me and have a free massage in order to do a press piece about my services would I do it? Probably. At least once, to see what the turnout was like. 

    Getting paid straight % means 100% of a $0 appointment means the MT gets $0. Does that not meet with this mythical goal of fairness? I thought 100% is more than "fair"...can't get paid more than 100%, so if 100% is not fair, nothing is!

    Instead of being defensive and attack-like, maybe you could offer a rational explanation as to where that $17,000 goes when I'm the one building client relations, performing the physical exertion, offering the advice/suggestions, bringing the client back, doing the laundry at home and creating and paying for marketing. That's simply what I was looking for - an explanation as to why I should give someone else almost $20,000 out of services I have rendered. 


    Don't be delusional to think that you are the one building client relations and getting the clients to come back. most clients aren't THAT attached to their techncians. If that wre the case, every MT who worked for a DC or a spa would have a full book of their loyal legions. It just is not that easy to start, grow and maintain a business of any kind.

  • up

    Alyson C Schlobohm

    Well, even though you have actually taken some time to answer the actual question, you still act and speak like a pompous jerk. I googled you and was not surprised to learn that you have horrible reviews. Not shocking given your overall attitude. Good riddance. 

    Relax & Rejuvenate said:



    Alyson Schlobohm said:

    Dear Relax & Rejuvenate,

    I care about how much the "chiro is making" because he is NOT the one making the money. I'm the one in the room with the patients doing manual labor, offering my suggestions, advice, feedback and strategies for the patient to save money while improving their physical well-being. I am the one building client relations and I am the one that makes the client want to come back and see me.

     

    If he did not invest $200K in chiro school, a lease, advertising, equipment and building HIS clientele there would be NO room for your to rent, clients to offer suggestions/feedback to, etc.

     

    Does a dental hygenist care how much the DDS earns? She does 90% of the clearning, but gets far from 60% of the fee.

     

    You are valuing your work more than you are valuing the risk and work of the DC. Anyone with a license can give a massage -- not everyone has enough clients to give them to. If they did, there wouldnot be half the threads on this board, including this one.

    It appears from your attack-mode sort of response that you're probably on the other end, where you're collecting a percentage of EVERY massage that someone else performs. Your line of thinking is exactly what I feel is wrong with the massage industry and why I feel that so many MTs get burnt out and leave the industry - they are getting by because they're making a decent salary, but they soon realize that they're working really hard for someone else to reap benefits and there's really no way to move up, because once they reach their maximum number of massages per day and week, they've capped out on all they'll ever earn. Most of us don't get benefits, hourly pay or raises. Most of the time laundry is done at home, which causes an increase in our own personal electricity and water bills, and decreases our "hourly" rate - as does time spent marketing, tracking mileage & expenses, answering client questions and emails, etc. 

     

    If you don't wan to work hard for someone else, then work for yourself. It's that simple. You have identified me, and my like-minded evil-doers, as the source of the problems with the massage industry. What you have jnot posited is a solution -- other than the obvious, start your own practice.

     

    Just to give you an idea of what wrong-thinking economics looks like, lets take a look at the P&L of a basic spa operation

    We have a 3 treatment room spa, with two nail stations in a town of only 50k people

     

    Fixed Costs -- these I have to pay regardless of how many clients I see. Bad month --- too bad, still have to pay

    Rent -       $4,500

    Utils -        $1,000

    Insurance - $750

    Equp Lease - $600

    PCs & software - $450

     

    Total -- $6,250   --- open for business 24 days a month, 8 hours a day = $31 per hour. If ALL 5 rooms and nail stations are booked 8 hours a day, then it costs $6 PER TREATMENT to cover fixed costs. Most spas run 35% utilization, so that triples the per treatment cost to $18.

     

    $95 - average hour of treatment

    - $18 - fixed costs

     

    Less per-appointment costs

     

    - $5 - laundry

    - $5 product costs

    - $5 average discount (which does not affect therapist pay as is our policy)

    - $2 credit card processing fees

    $17  + $18 in fixed costs = $35 before technician pay and benefits or $60 operating revenue

     

    Using your 60% / 40 split that you think is so horribly unfair, that would be $57 to the therapist and only $3 to the owner  -- and that is before paying the employee payroll taxes -- which also apply to therapist tips (I have yet to receive a tip for hiring and training such wonderful therapists, yet, I have to pay 10% on top of the clients tip in taxes and cc processing costs -- so a $20 tip wipes out $2 of my remaining $3) Oh, and let's not forget paid vacation and health insurance taht we offer our employees -- so that means I am taking money out of my pocket to pay MTs to come to work just so they don't feel bad about themsefvles for not being paid some mythical percentage of what is fair...I would be financially better off not starting the business than employing ANYONE at 60% commission. Or even 40% commission.

     

    Whose the greedy, evil expoiter now? I put up all the money, take all the risks and the government require I pay you for every hour you are at work, whether there is an appointment or not.

    If a percentage is meaningless and a relative number, then why IS there a percentage taken out of so many MTs paychecks? Why isn't there a flat fee per month, referral, etc.? 

    Because people -- business owners and technicians -- are too set in what other poeple do and some mythical sense of fairness to think about compensation schemes any other way. You can be paid hourly $ + % commission, you can be paid a flat fee for service, or you could be paid a straight salary regardless of if you do 1 massage or 7 massages in a day (I have yet to meet the MT willing to work for salary).

    I do not understand at all your reference to getting paid 100%. Would I be happy with that? Sure! Do I think that is the solution? Of course not. What do complimentary services from the media have to do with anything? If someone wanted to come to me and have a free massage in order to do a press piece about my services would I do it? Probably. At least once, to see what the turnout was like. 

    Getting paid straight % means 100% of a $0 appointment means the MT gets $0. Does that not meet with this mythical goal of fairness? I thought 100% is more than "fair"...can't get paid more than 100%, so if 100% is not fair, nothing is!

    Instead of being defensive and attack-like, maybe you could offer a rational explanation as to where that $17,000 goes when I'm the one building client relations, performing the physical exertion, offering the advice/suggestions, bringing the client back, doing the laundry at home and creating and paying for marketing. That's simply what I was looking for - an explanation as to why I should give someone else almost $20,000 out of services I have rendered. 


    Don't be delusional to think that you are the one building client relations and getting the clients to come back. most clients aren't THAT attached to their techncians. If that wre the case, every MT who worked for a DC or a spa would have a full book of their loyal legions. It just is not that easy to start, grow and maintain a business of any kind.