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How feasible is a non-profit float center? What about other alternative business structures like b-corps or co-ops? Graham and Ashkahn lay out their thoughts in this episode.
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Transcription of this episode… (in case you prefer reading)
Graham: Today’s question is “love the quick burst of float podcasting!” Not a question, but thank you.
Ashkahn: Oh, alright.
Graham: There is a second part to that too, which is, “I was wondering, or if you’ve heard, of any float center out there opening as a non-profit. We’re all about that floaty goodness, but I’m curious if anyone took it further. And if not, what do you think?“
Ashkahn: Ummmm…. I know of one.
Graham: You do?
Ashkahn: From back in the day.
Graham: Oh.
Ashkahn: So, the details are fuzzy though. I think Tom Fine, John Turner, and maybe Richard Bonk were part of it? And also, Jeffery Bruno I think was maybe a part of it. So, back in the day when they were first doing research, float tank research out in Toledo, Ohio, I feel like they told me about the fact that they started a non-profit float center.
Graham: Hmm.
Ashkahn: And that’s it. Those are all the details I know about it. I remember being very interested.
Graham: Yup, and in a sense, any float centers that are on university are like a non-profit float researcher.
Ashkahn: I don’t know if it was affiliated with the university or anything.
Graham: Just their own thing?
Ashkahn: I really don’t know.
Graham: We don’t know. You should call Tom Fine, do a guest appearance on here or something. I don’t know of any that are open right now …
Ashkahn: No.
Graham: … That are actually active non-profits. Again, other than float tanks and universities, or some other setting like that, which …
Ashkahn: Would it be part of a research facility or something?
Graham: Yeah, it’d be considered non-profit for sure. But, as far as commercial float centers operating as non-profits, just like you’re going to a regular float center experience, I don’t even actually know of any that are co-ops are anything like that either for their structure. And definitely if you do have a non-profit or co-op float center out there, reach out and let us know because I’d be really curious to hear how that’s going for you.
That said, I like the idea.
Ashkahn: Yeah.
Graham: I think it sounds cool.
Ashkahn: It does sound cool.
Graham: And I’ve thought about what it would take to turn float on into a non-profit or to open up our own crazy non-profit float center as well. So, it’s definitely something that we’re interested in.
Ashkahn: Yeah, you have to do a little bit more work to make it happen in terms of having a board and that sort of stuff. I think you typically don’t often see things like that for running a brick and mortar shop, probably for the reason of the shop is very logistical, day-to-day set needs as a opposed to a non-profit where you’re really driving a certain mission and developing plans to achieve those goals. But, it’s not to say that it can’t work, that those structures are necessarily at odds with each other.
Graham: Yeah.
Ashkahn: Different guesses to why it’s not quite as common of a thing.
Graham: Yeah. Another thing is you don’t own it at that point, right? If it’s a non-profit, it serves the public and its goal is to fulfill some kind of mission that benefits the people who the non-profit is stated to benefit. Whoever that is. Some form of the public usually, right?
And, as a result, you end up with a board who’s kind of in charge of the overall guidance of the non-profit. And then, often you have a totally separate team who’s running, in this case for the float center, the operations and management of the facility itself. And, sometimes those two overlap. Often, they’re separate. The board doesn’t really get paid, the operations side does. The board is in control, but can be voted out often times by the other board members or by the constituency of the non-profit by the other members.
So, there’s these kind of structures in place, but the basic concept is that, through those structures, the non-profit is self-contained. Although it has people who are serving it, it isn’t really there as a thing that’s owned by those people. In that sense, you can’t really sell a non-profit. It doesn’t become a sellable business in the same way, and you can’t take, well it’s a non-profit, so obviously you can’t take profits from it. And, if all you’re doing is serving on the board and not on operations, you can’t even really pay yourself as easily.
Ashkahn: Usually, yeah.
Graham: There’s ways to do it, but there’s also some division between those roles that often happen. So, again, as far as if you’re going into with the sense that you want to run your own float business and you want your float business to be a non-profit, that might be the wrong way to think about it. And if what you’re thinking is that you want to set up this non-profit float center that isn’t really yours, that could just run and maybe eventually you run off and go do your own thing, that’s maybe a little better way to think about how a non-profit might organize itself.
Ashkahn: But, you hear of some more wellness places, massage, acupuncture, bigger places that have facilities operating as co-ops.
Graham: Yeah.
Ashkahn: Sometimes. So, that might be a slightly more well-worn path to look at.
Graham: Yeah, and that’s where a lot of your members, even a lot of your customers who aren’t members would end up being members of that co-op. So, it’s like your float center is owned by the people who are floating in it. Could be that way of going.
Ashkahn: Connected with the community. I don’t know, as a non-profit, if you’d have to make a case for floats being a charitable thing or if that would be any sort of roadblock that you’d hit.
Graham: It probably depends. So, there’s a 501c3, which is the charitable non-profits.
Ashkahn: Yeah, it’s probably what you’d be.
Graham: Probably. You could set up a Church of Float.
Ashkahn: Yeah, that’s true.
Graham: Whole different C designation. And then, there’s also another side of this, is not even on the non-profit side. There’s the not for profit as well where you’re set up as a regular for-profit business essentially, but you’re deciding that you’re not going to take profits. You’re essentially not paying dividends and you’re going to take those profits and do something with them. Usually you’re donating it to a cause or sometimes you’re reinvesting in your own mission, but essentially, it just means that the owners of the business aren’t taking the profits from the business themselves and putting in their pockets or anything like that.
Ashkahn: Yeah, and there’s all sorts of different shades of business structures here that might seem appealing to people. There’s b-corps, which are a newer thing, which not every state has fully ratified yet, but a lot have. That’s basically the idea that you are a for-profit business, but instead of your goal as business only being to maximize profits, your goal also is to make sure that you’re being environmentally friendly and environmentally sustainable and that you are supporting your local community somehow.
They call it the “triple bottom line,” so instead of just focusing on money, you have these other goals and your business can make decisions based on fulfilling those goals as well. So, that’s a new business model that is, I think, a nice direction for business to go.
Graham: Yeah, definitely. And as a note too, if you start looking into this, what you’ll find is that that actually is a layer that goes on top of your existing business. So, b company, instead of having the LLC or instead of having a c-corps, you have this b corporation or something like that.
Ashkahn: Yeah. It’s a c-corps, or my favorite, the bs-corps.
Graham: But yeah, it’s this extra layer that basically just says you’re allowed to not have your bottom line be just profit for your shareholders, which is a cool thing to add on regardless if you’re into that sort of thing.
Ashkahn: There’s e-softs we’ve looked into, which are businesses that pretty much entirely owned by the employees. I’ve even heard of a business structure that’s based on block chains, like Bitcoin. Stuff can still get really wild the deeper you want to go. But, what we’ve found is it’s kind of hard sometimes for a small business to really do some of this stuff.
When you really look into turning your business into one of these kinds of alternative business structures, sometimes what you find at the end of that road is that you need a lot of money to actually manage something like that. And with something the size of a float center, it’s just financially not quite possible or at least very easy to operate as some of these business structures. They’re really meant for larger operations.
Graham: Yeah, as you can imagine, the more interesting … what am I trying to say here? The more interesting ways that you have to run your business, the more paperwork and the more things you need to make sure that those ways of running your business that are a little more alternative can actually get done. Which means, often times the more oversight, the more legal contracts, the more meetings, and so you start getting into these fancy ways to give back to the community or even share in general. Pretty much anything above just being a not for profit.
And it does, it gets really crazy. A lot of them don’t make sense unless you’re grossing 5 million dollars a year as a business. Anything under that size of revenue, you’d just be spending 40,000 dollars simply on the maintenance of these structures. So, it does unfortunately get a little hairy going into them.
Ashkahn: Yeah. I think they’re all awesome and I love when people actually try to go for it. So, if someone out there is doing cool stuff, definitely let us know, send us a message.
Graham: Yeah, do it. It’s all possible. I love it. Ashkon loves it. Our podcast as a person, if it were a person, loves it.
Alright, and hopefully that answered your question. Certainly the “if not, what do you think” portion.
Ashkahn: It’s usually the portion we answer.
Alright, if you guys have other questions you want to ask us, hop over to floattanksolutions.com/podcast and we’ll talk to you tomorrow.
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