Help Starting a Massage Therapy Co-op

Replies to This Discussion

Permalink Reply by Julie Onofrio on March 24, 2012 at 11:37am

You might want to contact http://www.newseattlemassage.com/ - they are a co-op.

• ▶ Reply

Permalink Reply by Relax & Rejuvenate on March 24, 2012 at 3:01pm

What is your goal in having a co-op versus other business models?

• ▶ Reply

Permalink Reply by Jack Bales on March 24, 2012 at 9:18pm

Our goal with the co-op model was to share the operating expenses while leveraging the group dynamic for items such as marketing.  After talking with our group about starting a business, no one wanted to be apart of business where they were just another employee.  We looked into S-corps, and partnerships but they didn’t appeal to the group.  For me, I feel the member/owner aspect will help to motivate me in providing a better service/over all experience for our clients.

Have you looked into starting a co-op or are you apart of a co-op?

• ▶ Reply

Permalink Reply by Jack Bales on March 24, 2012 at 9:18pm

Thanks!  Will do!

Julie Onofrio said:

You might want to contact http://www.newseattlemassage.com/ - they are a co-op.

• ▶ Reply

Permalink Reply by Relax & Rejuvenate on March 25, 2012 at 12:49pm

Jack Bales said:

Our goal with the co-op model was to share the operating expenses while leveraging the group dynamic for items such as marketing.  

 

This reminds me of how people spoke when I was in my MBA program. Still have no idea what it means. Could you give a concrete example?

 

After talking with our group about starting a business, no one wanted to be apart of business where they were just another employee.

 

So instead, you are all now just another owner/member, where instead of having duties/tasks/responsibilities, you wil lbe "leveraging the group dynamic"

 We looked into S-corps, and partnerships but they didn’t appeal to the group. 

You may not legally be structured as a partnership, but that is, operationally what you are. "Equal" partners, investing time and effort (instead of capital -- but we'll get to that soon -- and fiduciary roles and responsibilities) for the greater success of the larger organization instead of the aggrandizement of the leader/founder/responsible entity.

So you want the benefits of a partnership, without the structure of one. Not sure how you get there from here.

For me, I feel the member/owner aspect will help to motivate me in providing a better service/over all experience for our clients.

 

In an LLC, you are referred to as a member/owner also. Seems to be a lot of focus on language vs action or translating this vision into operational realities. I am curious why you would not feel motivated to provide the best possible service and over all experience to your clients regardless of your employment status/legal structure. Isn't that why you got in the profession?

Have you looked into starting a co-op or are you apart of a co-op?

No. Would sooner take out my own spleen with a dull grapefruit knife than try to run a business model more unweildy than herding cats.

So, say you find 5 like-minded souls who share your vision. Where do you find a space? Who's name is on the lease? Who puts up the capital for things like painting and common area items? What if someone bails out leaving the rest of you to share the expenses /4 instead of 5? How do you deal with someone who fails to deliver their leverage on the group dynamic etc..

 

• ▶ Reply

Permalink Reply by Jack Bales on March 25, 2012 at 2:55pm

Hey R&R…

Thanks for your feedback.  I’m not sure if I can explain the “group dynamic” any better then an MBA Professor.  However, here is a concrete example:

Let’s say you need to buy a new concrete plant (all in good fun).  As a sole proprietor (just as an example) the entire cost of the concrete plant is your responsibility.  However, with a co-op, the members share the cost equally.  

Cost of Plant - $10,000

Sole Proprietor (1 owner): $10,000

Co-Op (5 owners): $2,000 per member

It is about the potential for each member to benefit from the plant equally.  I do understand that this is very basic, but it’s an example.  

As for duties, tasks and responsibilities, they do not go away in the co-op.  Everyone will have responsibilities, however the members will have to answer to a board of their peers vs. a “boss.”  

Regarding partnerships, a co-op is structured similarly to a partnership in that costs, expenses and resources are all shared.  That is each member pays into and has an equal vote in the operations of the co-op, including decisions on marketing, improvements, products, etc...  However, members of the co-op have clients, but looking for a space to provide massage and someone to share some of the overhead expenses.  Essentially, members are operating their own independent business and may take an occasional walk-in client.  One essential difference between the partnership and co-op is that the co-op can continue to operate if someone decides to move on or leave.  This is a strong advantage over partnerships.  

As for motivation, my goal is to provide my clients with the best possible care.  As an owner of a business it is up to me to make all the decisions on what I believe the best possible care.  However, as an employee, “the best possible care” becomes someone else's decision.  I’ve also found that some employees have an “it’s not my job” attitude.  As a member of a co-op, the member requested to be apart of the organization.  

I realize that a co-op is not for everyone, just as running a business is not for everyone.  The group will have to do it’s best in ensuring the potential member is a good fit.

You bring up some great questions and this is why I’m seeking help from this network as well as other sources: 

1. Where do you find a space?  We are working with a realtor.
2. Who's name is on the lease?  I’ve been brainstorming this question and still need an answer.  
3. Who puts up the capital for things like painting and common area items?  The members.  
4. What if someone bails, leaving the rest of you to share the expenses with four instead of five?  With a co-op structure, there are several options.  Advertise for a new member, split the cost 4 ways, adjust the plan to fit a smaller group…
5. How do you deal with someone who fails to deliver their leverage on the group dynamic etc...  Great question, and one of the items I would love to get more feedback on. 

Thanks for taking time out to respond!  

• ▶ Reply

Permalink Reply by Relax & Rejuvenate on March 26, 2012 at 6:14am

I think you are still too hung up on the semantics.

 

Sharing costs across multiple people is a partnership -- not "leveraging group dynamics".

 

As for your concrete example, I think it shows the problems with a co-op. You now have 5 people owning a fixed asset. Dealing with the departure of a co-op member is not simply as easy as running an ad and fining someone to pony up the money. Fixed assets depreciate, so is the new member paying the original cost or the depreciated cost or the replacement costs? How/when is the departing member cashed out and at what value? The asset then has to be re-titled fr the new ownershi structure.

 

A lease is similar, and usually have t be personally guaranteed. There is no one person to do so. Larndlords want easy, not complicated.

 

Think of this in real estate terms.  A condo is like an LLC or S-Corp. someone is paid by the "Shareholders" to run it, it can borrow money, make improvements and assign costs proportionally.To join this "company" you buy your "shares" by buying a housing using unit, and your shares - and cost allocation - are proportional to the price you pay.

 

A co-op -- popular in NY area, but not muh elsewhere,  thank goodness is owned and managed by the members. Al new members have to be approved. There is no one sngle responsible entity, so you can't effectively borrow money or make any improvements. Say your building needs a new rof (or practice needs a new carpet)  -- that expense has to be paid NOW -- so all members get a one time,,possibly hefty, assessment..

 

Once you install the new carpet -- which, by the way, your clients wore out more than mine didbecause you do more 50 minute sessions and I only do 90 min sessions, so why am I paying the same share as you -- and a member leaves, they can't take their share of the carpet with them. Does the new member pay the departing member for the reent improvement? Do the remaining members pay out and collect it from the new -- if any -- members? If so, what if one of the remaining members just came back from a month in Thaland and does not hae te cash tor such an unexpected outlay

 

 As an owner of a business it is up to me to make all the decisions on what I believe the best possible care.  However, as an employee, “the best possible care” becomes someone else's decision. 

This pre-supposes someone else's decision/defnition is not as good as yours.

 

 I’ve also found that some employees have an “it’s not my job” attitude. 

Some PEOPLE have that attitude, has nothing to do with their employment status. If that is their attitude as an employee, it will be their attitude as a co-op member. Just because you are not caling them employees they still have obligatios and resposibilities to implement the decisions of another (in this case, the majorit deciion of the members) for the greater organization to survive.

 

As a member of a co-op, the member requested to be apart of the organization.. The group will have to do it’s best in ensuring the potential member is a good fit. 

Yes,  my point exactly -- this is still complyiing with womeone else's deision/standards.

 

 

• ▶ Reply

Permalink Reply by Daniel Cohen on March 26, 2012 at 6:52am

It seems the form of co=op under discussion is a "Worker Co-op". http://en.wikipedia.org/wiki/Cooperative#Worker_cooperative

• ▶ Reply

Permalink Reply by Georges Parmentier on May 22, 2012 at 8:32pm

Hi Jack!

I'm in Australia and started to work seriously on the idea of the coop and found that thread during my google research.

Have you follow up on your idea? Did you get some feedback from New Seattle massage?

Would love to contact you privately if you up for it?

All the best in your career !

Cheers

Georges.

• ▶ Reply

Permalink Reply by jaelin thomas on May 23, 2012 at 3:02am

Thanks for sharing this wonderful information :)

• ▶ Reply

Permalink Reply by Jack Bales on May 23, 2012 at 9:27am

Hey Georges...

Unfortunately all my inquires went unanswered...  However, I did find some great leadership advice via Dave Ramsey's EntreLeadership Podcast.  The principals can apply to any type of business.

Good Luck!!!  and if you get something started let me know!!!  

Georges Parmentier said:

Hi Jack!

I'm in Australia and started to work seriously on the idea of the coop and found that thread during my google research.

Have you follow up on your idea? Did you get some feedback from New Seattle massage?

Would love to contact you privately if you up for it?

All the best in your career !

Cheers

Georges.

• ▶ Reply

Permalink Reply by Chester Hedrick on June 6, 2012 at 11:20pm

It would really be nice to be able to start with a co-op though one that would not assure you of anything as it would just bank on what each one of the members has to say and what they actually want done with it.

You should assign a set of officials who are likely to lead everything or at least administer the group for the mean time before you are able to do it just right.

• ▶ Reply

▶ Reply to Discussion

• ‹ Previous
• 1
• 2
• Next ›
• Page