What's the best way to handle this

[Erika (lovesyew)]

I have always had renters and have not had much to worry about because as long as the rent was paid on time there were no issues. I recently have a new therapist that is going to do a 40/60 split with me, instead of rent. What is the appropriate way to handle this situation? Should her clients pay her and then she pays me, or should her clients make payment out to my business and then I pay here everyweek. What is a good way to keep track of how many clients she's working on? Most of the time I will not be there with her. Any help is appreciated.

 

[Pompal 09.]

my rule is the client pays my business and i cut the % check every week. it's much easier for me and helps us to look more like a team rather than individuals. also helps make sure that the therapists all charge the same amount, etc. we have 4 and it works for us!

good luck!

 

[xxamethystnightxx]

If you are concerned about honesty, one way to keep them honest, is maybe to implement a minimum and/or a maximum rent. For example, yes they keep 60% of the fee, but the 40% they give to you must total to $500* for the month (or what ever you decide upon). Then if they clear say $1200* to you in a month, they can keep 100% of the fee after that that month.

It might make book keeping a little more complicated, but it means that the therapist might be less likely to fudge the number of clients they see if they know they are responsible for a minimum rent, and will keep 100% if they reach the maximum. Also gives them incentive to market for themselves, and rebook clients consistently. And guarantees you a minimum rent

*based on what typical min and max values are in my area, yours will differ

Myrrha

 

[forgetful]

Thank you for your help. Where can I find an I.C. contract of some sort?

 

[PetPrincess]

Thank you for your help. Where can I find an I.C. contract of some sort?

Honestly, I think you'd be best served by hiring an attorney to draft a contract for you rather than trying to just come up with one on your own.

 

[Angel T]

Here's one offered free on Cherie Sohnen-Moe's website (the author of Business Mastery):
http://sohnen-moe.com/formfiles/ind_cont.doc

Here's one offered for free on Julie Onofrio's website:
http://www.thebodyworker.com/employmentvscontractor.html

They're both MSWord documents, so you can personalize as needed.

 

[TheDominatorOfCheese]

If you are concerned about honesty...

If you are concerned about honesty, then you might want to reconsider the relationship.

They are in a space rented by you -- meaning you are liable for all goings on -- and will have unsupervised access to a great many things, including your clients who may call or drop by.

one way to keep them honest, is maybe to implement a minimum and/or a maximum rent....
It might make book keeping a little more complicated, but it means that the therapist might be less likely to fudge the number of clients they see if they know they are responsible for a minimum rent, and will keep 100% if they reach the maximum.

Minimum rent does not help accurate reporting. The minimum means it does not matter if they see 1 or 100 clients, and have no incentive to report everything. They pay the same, regardless.

% rent favors underreporting. Our spa lease is on a % rent basis, with the landlord having the right to audit receipts and look at sales tax and income tax returns to verify accuracy of reporting, and can fine/evict for underreporting.

Your best shot at getting an accurate count of services is to put into place several simple, but overlapping control mechnisms.

1) Make this person an IC, with a simple but well thought out contract (with legal help) that includes a clause about the consequences of under-reporting. As our friendly beat cop tells our spa employees -- that constitutes theft and is prosecuted as such in this city.

2) All payment goes through your office, and you pay out on a scheduled basis against receipts provided (signed by client confirming tip, total and method of payment)

3) All appointments are registered in a common log/appointment book

4) Provide linens, and track usage against services reported

Honest people have nothing to worry about.

Cheaters cheat. You may not catch one the first time, or even the 2nd or 3rd, but ultimately you will. Which is why you need a breach of contract clause in your IC agreement.

 

[Pompal 09.]

Minimum rent does not help accurate reporting. The minimum means it does not matter if they see 1 or 100 clients, and have no incentive to report everything. They pay the same, regardless.

They have to see at least enough to make $500 or that is coming out of their own pocket. The max will help to push the person to see more, because there is a bonus if they reach the max.

It is not a guarantee, nothing is. If a dishonest person is hired, then you could run into all sorts of devious ways to fudge the numbers, and nothing is going to guarantee truth. As a business owner it is a risk hiring someone else to work in the clinic.

The system I suggested works well in my area, many clinics have this written into their contracts under payments. It won't work in all areas for all people and clinics, but it is a viable alternative to straight split, straight rent, or full employee. The clinic owner is guaranteed a certain amount of rent, and the IC is given a bonus the harder they work. Perfect, no, viable, yes.

 

[froggie88]

first, lets clarify some language.

If you pay minimum "rent", you are a tenant, not an IC

If you are "hired", you are an employee



I did not say minimum payment or rent was not viable, what I said was it does not increase the accuracy of reporting. Accuracy matters so that you can gauge if you are charging the right amount for the space should you decide to change the economics of your relationship with an IC/Lessee/Employee.

In a minimum payment situation, you don't really care how many clients are seen by the IC. You get your $500 - or whatever stipulated amount - each month.

It is ALWAYS coming out of their pocket. There is no "bonus" -- they are doing the work, paying their minimum or % and keep what is left. The more they work, the more they earn.

 

[hello sunshinee. <3]

I rent space based on usuage with a max. Every appt is recorded in a book and I pay the owners at the end of the month. Could I cheat them? Probably. But then someone would cheat me. Not worth it. There does have to be a degree of trust for sure or the owner would drive themselves mad. We actually have no written contract, go figure. I have had a key to their office for 4-5 years now too. I use to only use it once or twice a month but that is a whole other story.

Go with your gut, if you don't think you can trust them, contract or not, it will go bad.

 

[twee_grrrl]

R&R, I think you are taking my posts out of context. When you implement a minimum AND Maximum to be paid each month the person who is the the being paid, has an incentive to market, and work harder to see more clients.

Therapist A Pays 40% of their fee to the clinic at a minimum of $500 a month and a Maximum of $1200 a month. Once the $1200 cap is met they keep 100% of the fee for the treatment. I realize that this won't work for you, and you won't implement it, and that is fine. It won't work for everyone. But for the small clinics who are looking at brining in someone to help out, it does work. And a lawyer will be one to tell someone how to implement any situation so that it will be legal and within the proper tax laws.

As for the terminology, as a business person, yes you are going to want to be very clear as to whether you have a tenant, an employee, or an IC. But for simplicity I used hire, employ and employee for ease of communication. I'm sorry if that offended, or confused anyone.

 

[kirsty_t_2007]

spoke with this therapist today and she wasn't going for her clients making checks or payments out to my business and then I pay her. So, I said ok, we need to come up with an arragement that is going to make us both comfortable. I like the idea of her using my sheets and matching them up with her schedule that I will have access too.
My split with this therapist is 60/40. If she is using my linens it can be very expensive. Is this gonna be a fair split?

 

[69 Is My Rhyme]

This therapist is just starting out and has no real clients as of yet. She will be working on her first few clients this week.

 

[good y tu shoes]

So, how about charging her rent at a low rate for the first 3 or so months?
Maybe a second tier for the following 3; regular rate after 6?

Maybe ask her a leading question like "how long do you think it will take for you to be at a reasonable amount of clients?"