Are you contemplating the purchase of an existing Physiotherapy Clinic or Allied Health Practice? If so, there are crucial factors to consider before making this significant decision. The process requires meticulous digital due diligence and research, and it's vital to avoid overcompensating for perceived value adds during negotiations. In this article, we'll share valuable lessons learned by Physio Inq, gained from years of experience in buying and selling clinics—some of which were successful, while others presented challenges.
Questions To Ask When Purchasing a Physiotherapy Clinic or Allied Health Business
If you're contemplating the purchase of an existing Physiotherapy Clinic or Allied Health Business, you've likely asked yourself the following questions:
- Is the Healthcare industry/Physiotherapy industry the best industry for me?
- Why should I invest in the healthcare industry over any other industry?
- What are the most critical factors to consider when buying an existing Physiotherapy clinic to ensure long-term success?
- Do I possess the qualities necessary to own my own clinic?
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Common Pitfalls When Purchasing a Physiotherapy Practice or Business
Pitfall Number 1: Retaining the previous owner as an employee
It can be tempting to keep the former owner on board as an employee, especially to prevent a loss of clients. However, it's crucial to limit their involvement to ensure a smooth transition. If they continue as a contractor, ensure it complies with fair work laws to protect your profit margin. After settlement, it's common for the client visit average (CVA) to decrease due to natural adjustments.
Pitfall Number 2: Inadequate working capital
Maintain a healthy financial cushion, equivalent to at least one to two months of operational expenditure in cash or a line of credit. This is especially vital when dealing with slow-paying clients like workers' compensation cases, as rent and employee payments must be made promptly.
Pitfall Number 3: Relying on old referrals
When purchasing a healthcare business, it might be tempting to overvalue the existing referral network. Be cautious and anticipate a potential 25% drop-off in new patients as referrals decrease for various reasons.
Pitfall Number 4: Neglecting to understand vital statistics
Familiarise yourself with critical metrics, including the client visit average. Be aware of what is considered a good or bad figure. If the clinic has a high CVA that's unsustainable, it may lead to failure. Look for opportunities to improve the client visit average and expand the business.
Pitfall Number 5: Lack of a marketing and business plan
Entering the venture without clear goals is a recipe for uncertainty. Craft a comprehensive business plan with timelines, share it with your team, and execute it diligently.
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Top Tips for Taking Over an Existing Physiotherapy Clinic or Allied Health Business
Tip Number 1: Understand your statistics during Due Diligence
Gather and analyse data on patient numbers, including new patients, returning clients, and those seeking treatment for new injuries. Understanding these statistics is essential for a successful transition.
Tip Number 2: Implement a clinic makeover swiftly
By making visible changes to the clinic, you'll establish your presence, signal a commitment to positive change, and demonstrate your long-term dedication.
Tip Number 3: Engage with the community
As the new owner, embrace your role proudly. Don't fear the visibility; use it as an opportunity to showcase your commitment. Show respect for the previous owner's reputation while promoting yourself and the clinic.
Tip Number 4: Foster organic connections with staff
Build relationships naturally; don't force them. Demonstrate your leadership and genuine care for your team members. Personal interactions such as lunch meetings and one-on-one discussions go a long way.
Tip Number 5: Assemble a strong support team
Seek the expertise of professionals, including a marketing consultant, accountant, legal advisor, and a business mentor. Leveraging their knowledge will contribute to your business's success.
Date Published: Monday, June 10, 2019
Date Modified: Tuesday, July 16, 2024
