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This is the second article from an interview I did with James Crook recently.
James and I both work with allied health clients often. James and his wife Elicia, run Massage Champions, a business coaching program for massage therapists.
We met each other because I have a dedicated analytics offer for businesses who use the Cliniko booking software where I hook Cliniko up into analytics and then create a lead generation dashboard and a couple of other key reports that show a clinic where their bookings in Cliniko are coming from. James thought it was a great idea so he interviewed me on his podcast and since then I have gone on to help several clinics who wanted to track their paid campaigns to get more online bookings.
I thought James and Elicia are so great at what they do, and do amazing things for their clients (everyone raves about them) so I asked him if he would contribute a story about his business or a business he helped. As it turns out he had not one, but two major business “events” that shook Elicia’s massage clinic before they started Massage Champions.
This story is the second one, a very difficult situation that hopefully won’t happen to you.
How a Tax Audit Led to Disaster – And How to Prevent it from Happening to You
Story by James and Elicia Crook of Massage Champions, written by Frances Williams
James and Elicia’s massage business was growing, so they hired new staff under subcontractor agreements. The subcontractor agreements seemed a-ok, and all parties were happy with the conditions.
However, stress mounted when the ATO completed an audit and it turned out that what they thought was by the book was completely wrong.
According to current employment law, their subcontractor agreements were “sham contracts”, even though everybody on the team had agreed and everybody were happy with them.
The ATO backdated two year’s worth of superannuation for every employee. Clearly, this caused financial and emotional disaster.
“Now for us, it was a massive kick in the pants. That’s a lot of money. We had to go on a payment plan with the ATO.”
Elicia cut her own pay and almost all of it went straight to the ATO debt.
To make matters worse, the workplace had changed from harmonious to awkward. James and Elicia worked fast to correct their mistakes and restore order in the business. New contracts were drawn-up by an HR expert, but the staff weren’t happy with the pay structure.
“They lost their minds and a bunch of them quit. This just keeps getting worse and worse!”.
Needless to say, “it was a really, really challenging time”.
Despite yet another setback, James and Elicia kept powering on through the stress and hardship.
“What we did do was hire a bunch of new staff and they were all on proper employment agreements that the ATO would be proud of. And because that was how they started. They didn’t know any different. So it worked really well and that did end up being a team that was with us for quite a long time.”
This was when things really started to look up for James, Elicia and the business.
“So it was kind of a way of being able to hit a big reset button unintentionally. But in the end, it kind of worked like that. We were able to reset the team, the dynamic…”.
James and Elicia turned their stressful experience into an opportunity to educate others. They recognized that the legalities and nitty gritty details around employment are not always clear to the employer.
It’s easy to breeze through years of seemingly correct employment agreements, only to find that the laws have changed and your business is hit with crippling financial obligations. James and Elicia decided to help others to navigate the waters and avoid the stress and cost they encountered.
“That incredibly painful experience, which is probably one of, or I can just say the hardest thing we’ve ever gone through in our lives has turned into something that we now have as a bit of a mission to help other people not have to do that. And that’s a huge part of what our calling in life is now as well as business is just helping other people to see what’s really going on in the industry and what these changes mean”.
One thing we can learn from James and Elicia’s experience is that even if you think you are ticking all the boxes, those boxes may not be the right ones. If you are unsure, seek advice right from the start. Bring in experts who can guide you through the areas which you are unfamiliar with.
Make sure you are clear on the laws before you embark on employment contracts to avoid disaster down the line. Keep yourself educated and updated on the changing laws as you run your business so you are never caught unawares.
Secondly, James and Elicia demonstrate that even when chaos strikes, you can get through it. Those stressful times can be seen as valuable experiences which strengthen your future both personally and professionally.
“And if I’m happy with who I am right now and I’m on a mission to do stuff right now, then I have to start being grateful at some level for those experiences, even though they were horrible or hard or challenging or whatever. That is who I am. I am the sum of all those experiences put together. So they are what they are.”
Click to Open Transcription of Video
Personally, while listening to this story I was amazed by how readily James was able to share such a painful story. James and Elicia have a very generous spirit and rather than sweeping this painful experience under the rug, they are instead completely open about it and do their best to prevent it from happening to others. I am grateful that James shared this story with me and it certainly reminds me of the importance of having employment contracts professionally reviewed.
If you’d like to get in touch with James and Elicia here is their contact info:
Elicia and James Crook, Massage Champions
Elicia and James are passionate about helping other therapists to create their dream business as they support their communities, and to seeing the industry moving forward.