Small Business: Massage Parlor?

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mojorisin
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Joined: Sun Nov 27, 2011 9:19 pm

Small Business: Massage Parlor?

Post by mojorisin »

We've moved from the north to the south, in a rapidly growing city. Back at "home" there are massage parlors everywhere, and I "hear" they do very well financially. As I'm doing some research on this, and contact some existing franchises, does anybody on this board have experience in this business?

I've noticed there are about 5 parlors here already in the "affluent" part of town, however at home there are 5 on a block and always full.
robertalpert
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Re: Small Business: Massage Parlor?

Post by robertalpert »

mojorisin wrote:We've moved from the north to the south, in a rapidly growing city. Back at "home" there are massage parlors everywhere, and I "hear" they do very well financially. As I'm doing some research on this, and contact some existing franchises, does anybody on this board have experience in this business?

I've noticed there are about 5 parlors here already in the "affluent" part of town, however at home there are 5 on a block and always full.

If you are the masseuse, the it may be a business opportunity. Otherwise, it would be like a high-yield junk bond fund --- risky.
RNJ
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Re: Small Business: Massage Parlor?

Post by RNJ »

mojorisin wrote:We've moved from the north to the south, in a rapidly growing city. Back at "home" there are massage parlors everywhere, and I "hear" they do very well financially. As I'm doing some research on this, and contact some existing franchises, does anybody on this board have experience in this business?

I've noticed there are about 5 parlors here already in the "affluent" part of town, however at home there are 5 on a block and always full.
FYI: For more responses, you might want to rephrase your question; in some parts of the country, the term "massage parlor" does not denote a place where one would go to get a massage.
SteveKL
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Re: Small Business: Massage Parlor?

Post by SteveKL »

mojorisin wrote:Back at "home" there are massage parlors everywhere, and I "hear" they do very well financially... in the "affluent" part of town...
OP, sounds like a bit of "market research" is in order. Do you have a business model that would distinguish your operation from the competition? Do you have experience operating this type of business (or any business) from which you can draw to create a business plan? Would this be a solo operation, or would you hire staff? How are rents in your new community? What is the target customer demographic, and how would you market to them? What are the city/county/state business and professional licensing regulations that would affect the business?

I can think of a number of businesses that have exceptionally low barriers to entry, which tends to make it very easy for competitors to set up shop and siphon away business from one another: Hair and nail salons, tanning salons, pet groomers, and just about any personal-service business that does not require extensive equipment, inventory, or build-out costs. Are you sure you want to risk fracturing the market for this service further, by throwing your hat in the ring?
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frugaltype
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Re: Small Business: Massage Parlor?

Post by frugaltype »

RNJ wrote: FYI: For more responses, you might want to rephrase your question; in some parts of the country, the term "massage parlor" does not denote a place where one would go to get a massage.
They're pretty easy to tell apart, though, by their advertising.
Dulocracy
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Re: Small Business: Massage Parlor?

Post by Dulocracy »

In the SouthEastern US, you can go to a Massage Therapist or a Massage Parlor. The Parlor usually provides a "happy ending." As an attorney, I have represented both. The Parlor type establishment has more legal problems, and I would NOT recommend opening one, despite the large amount of cash that flows through. The legal problems are not worth the cash flow.

The therapy-oriented business is hit or miss. You need to carefully select your area. For example, if it is a place that offers higher end services that cost more, make sure you are in an area where people can afford it. A higher end store is much less dependent on walk-in traffic, but building a client base is a lot harder. You will have to market well (not extensively... well). That is, sending out lots of mailers or getting a phonebook ad will not cut it. Mailers are not going to say high end. Radio on a station that is geared predominantly towards women is good. In Atlanta, for example, Q-100 has a wide listener base that is mostly women, many of whom spend money and watch shows like "Real Housewives." Pop music with an extremely popular morning show. Find something like that in your area if you are going higher end. High end, local magazines have not worked as well for clients to whom I have spoken. I do not know if it is the print media or a problem with distribution, so do not take that to say it could never work or that print media is bad. Know your market. A market is not going to support as many high end massage businesses as it will mid-range.

If costs are more mid-range, specific location rather than general is important. For example: massage places in busy shopping centers get more business for those out for the day. They get bored shopping and stop in to relax. Notice the word busy. A massage business I know of outside of Metro Atlanta is doing really well because it is in a shopping complex were people drive from all over to experience a day of shopping at cute boutique stores with a few anchor stores. Another massage business of the exact same franchise in another shopping center is not doing well at all. That shopping center has a grocery store and lots of restaurants, but not a lot of stores. Business people want to get in and out for lunch, and no one gets a massage while the ice cream melts and milk spoils. The other types of stores nearby can have a huge impact.

I do not have information on cut-rate massage places, as none of them have hired me. Near where I live, there is a lady that has a sign out in front of her herbal shop that they also offer massage. I am certain that she has clients, but this type of place probably caters to a smaller group of loyal customers. Massage is likely not their primary source of income, either. In fairness, this is speculation.

While the above is just a little bit to consider, you will want to do thorough research and due diligence before opening any business. Get an attorney and a CPA. I have seen a lot of do-it-yourself LLC or INC formations that because of one detail or another were held to be improperly created in court. I have two clients right now that did not speak to an attorney until it was too late. They thought they did not need an attorney because they did not make enough yet. Unfortunately, they did not consider that without corporate protection, they may be liable for a lot of debt. I just referred one of the two over to a bankruptcy attorney. A well formed LLC would have prevented their personal bankruptcy. A CPA can do a LOT to help someone determine how they will be treated for tax purposes AND take defensive steps to avoid an audit by avoiding red flag areas. I cannot give you even a clue as to what these are. (All of my contracts specifically state that I do not give tax advice, and that we would work with a CPA to handle those matters.) Ask your attorney for a referral to a CPA. I have known some that are ok, some that are not ok, and some that are great. The CPA I use is brilliant. Even though I get nothing for sending people to her, I do know my clients are 1) taken care of and 2) will appreciate that I sent them to someone good. Plus, I want my clients to be successful so I can keep being their attorney. Most attorneys have the same philosophy. (No, I am not going to trash talk other attorneys, most of whom are honorable and good people.)
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.
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englishgirl
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Re: Small Business: Massage Parlor?

Post by englishgirl »

I have a small alternative/natural health business. We had to jump through a couple of hoops to get a Massage Establishment License (needed in our state, who knows in your state). In my state they really actively try to prevent the types of massage parlors that offer "happy endings" so there are inspectors to make sure that all is above board. However, the big massage chains that offer $49 a month membership advertise heavily and drive down prices. So convincing people that they should pay double what the chain down the street is charging in order to get a massage is a bit of an issue. I have heard that some of the therapists that work at the big chains are good, but it's hit or miss who you get. I guess if you want a massage from someone earning $10-20 an hour, then you gets what you pay for.

It seems like the big chains offer franchising opportunities, so I guess you could go into it just like you would if you wanted to open a Dunkin' Donuts.

And yeah, don't call 'em massage parlors. Unless you really do want to open a place that offers happy endings. In which case, ewww.
Last edited by englishgirl on Fri Dec 13, 2013 10:27 am, edited 1 time in total.
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JupiterJones
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Re: Small Business: Massage Parlor?

Post by JupiterJones »

Have you thought about something like a Massage Envy franchise? That would be one way to set yourself apart from the competition--by running a place with a recognized name, marketing support, etc.
Stay on target...
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prudent
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Re: Small Business: Massage Parlor?

Post by prudent »

I have a friend who has her own massage therapy business. She has a degree and has also professionally trained in multiple types of massage - trigger point, deep tissue, etc. Her focus is pain and stress relief. Belongs to a professional organization. Started her business 5 years ago with no actual business experience and already has had to hire an assistant. She works about 30 hours a week doing massage as physically it does take a lot out of you. Uses technology to save time - web-based appointment system that automatically sends email reminders. Does her own books. She has clients from ages 10 to 80. Her very young clients have physical disabilities that are helped by regular massage.

She charges various prices based on the type of work. Clients get a 20% discount if they book again within 2 weeks, 10% if within a month. I suspect she's doing well in the business as if she was struggling she would have to take more appointments beyond 30 hours a week. She's at the point now where her regular clients consume about 80% of her own time so the assistant takes all the new clients unless they have a specialized need that the owner is trained for. She has done very little advertising but has done well by aligning with health clubs and chiropractors in her area to cross-refer customers, as well as word-of-mouth.

A couple years ago she did a Groupon but would never do it again as it only attracted bargain hunters. Sold 200 and exactly 3 of them became regular clients, and the other 197 just sucked up appointments at about 30% of the money compared to what a non-Groupon customer would pay.

Some Workers Comp and auto accident injury claims will cover her service.

I'm also a customer and it's my one indulgence to go twice a month for 30 minutes.
leonard
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Re: Small Business: Massage Parlor?

Post by leonard »

My first suggestion would be dropping "Parlor" from the business name.
Leonard | | Market Timing: Do you seriously think you can predict the future? What else do the voices tell you? | | If employees weren't taking jobs with bad 401k's, bad 401k's wouldn't exist.
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Matigas
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Re: Small Business: Massage Parlor?

Post by Matigas »

You should be able to make money hand over fist. 8-)
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