|Building your home-based massage practice requires careful planning.
Determine the amount of space you really need. Be generous but remember that any space taken reduces home usage and comfort level. Consider the additional cost of heat, lighting, air conditioning, maintenance and all that goes with the operation of your massage practice.
Be innovative in your design. Work around what you currently have. Location and layout is often dictated by available space, not by what is ideal. Build and furnish for efficiency. Design around the furniture and fixtures that you have or intend to acquire, not the other way around. Be neat and modern but cost-conscious.
Develop a well-thought-out floor plan. This includes all of the areas to be used for your office and living accommodation. Draw it on paper to scale. From cardboard, cut out miniature furniture and fixtures that you currently own or will acquire to the same scale as your floor plan. Next, move them around on your drawing until everything fits the way you want it to.
Include sufficient storage area. Even if you do not sell products, over the years you will amass great piles of paper. Be sure to allocate space for that.
Distinguish home from office. Separation between family living areas and your massage therapy practice is vital. There should be a designated area in which you meet and attend to clients without disturbance from family members. The layout, the access, the convenience, the facilities and the furniture selected should reflect
Mind the look and feel. Physical appearance is important. You want to be upscale, neat, clean and professional, yet, not so posh that clients will steer clear. The office, its appointments and the furniture should be in the middle of the road. Your work environment cannot be hazardous to your health. A well-planned home office is one in which you enjoy working and in which your clients appreciate being.
Think of convertibility. Allow for changing needs. When you renovate the home for office use, always bear in mind three things: first you want to build for your personal use and the convenience of your clients and family; second, someday you will want to sell that house; third, someday you may wish to rent out the property. Will you be able to earn a fair return on your investment? Bear in mind that on a resale you will have returned only a small percentage of the cost of your improvements. Therefore, you want the best you can get for the fewest dollars.
Some things are not meant to be. Never try to redevelop a basement that is damp or musty-smelling, with poor access, low ceilings or other unsuitable characteristics. You will never end up with anything satisfactory.
Know the rules. Before you start, ensure your plan meets all applicable codes – building, electrical, plumbing, fire, health. If it does not, authorities will shut you down. Often with older homes, the cost of bringing them up to code is prohibitive and could kill the viability of the in-home office development.
Consider accessibility. As some of your clients may be disabled, allow for chair lifts and ramps, if possible. Safety and convenience are always prime considerations.
Calculating costs. When estimating the cost of renovating for your practice, get the best quotes you can and double them. If it’s an older house, add another 50 per cent. You will not be that far out. Don’t forget soft costs. These include design cost – if you hire an outsider to do it – building permits, licences and additional insurance. Never agree to a cost-plus contract or employ a fly-by-night home renovator. This is the best way to get hosed.
Amortize the cost of improvements. As it is allowable for income tax purposes and will act as a check on the wisdom of making the investment, amortize (or depreciate) the cost of the improvements at a competitive rate of interest, over a five-year, but never more than 10-year, period. Add to the amortization the cost of space rent – what you would have to pay if you were to rent. Add the projected building operating costs. The time frame would be a normal lease period in the property of another. A competitive rate of interest is what you could have earned if buying a Grade A bond. The monthly amortization amount can be obtained from a set of mortgage payment tables, available from most stationary stores or from your accountant.
For example, if your cost of improvements is $20,000, at six per cent interest for five years, the monthly amortization would be $386.66. For 10 years, it would be $222.04. Assume a total liquidation of the investment. As it is for business purposes, the Canada Revenue Agency will allow you to deduct office expenses, whether at home or elsewhere. Charge your practice rent and operating costs. Always keep your office and personal living expenses separate. You, too, could be audited.
Always make a comparison of your amortization and operating costs with the cost to rent an office in a good location, of the same size and with equivalent appointments. For example, assume your improvements amortization is $387 per month, space rent to yourself $300, and extra utilities, taxes, insurance and monthly property costs are, say $100, your total direct cost would be $787 per month. If your office space is 500 square feet, this is equivalent to a rental of $18.89 per square foot per annum. It ain’t cheap. If it is necessary to borrow all of your development costs from a bank, leasing could be less expensive.
Balancing a career and home life can be challenging, but with proper planning, it can be rewarding.