A Comprehensive Guide to Buying a Physiotherapy Clinic or Allied Health Practice

Originally Published Jun 10, 2019

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.

Who should read this article?

This article is tailored for individuals who fall into any of the following categories:

• Aspiring entrepreneurs looking to create a meaningful and financially rewarding asset.
• Investors, business owners, Allied Health practitioners, or anyone in between.
• Dedicated professionals with a strong work ethic.

In order to assist those considering the purchase of an existing Health business, we've compiled a comprehensive guide titled 'Pitfalls & Handy Tips When Buying An Existing Physiotherapy Clinic.' This guide is available as a FREE downloadable e-book, offering insights from seasoned experts in the field.

Click here to download our latest e-book: Pitfalls & Handy Tips When Buying An Existing Physiotherapy Clinic, to help anyone considering to purchase an existing Health business understand what they need to be looking for from the get-go.

There’s a reason why Physio Inq is Australia’s Franchise Network of the Year (2020)

pitfalls and tips when buying a physiotherapy clinic

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?
  • How do I effectively recruit and retain top-quality staff? 

Whether you've already made an offer on a clinic or are still in the consideration stage, this guide will help you navigate the process and steer clear of common pitfalls.

Learn more about the top pitfalls all new business owners (always) make! And how to avoid them!

pitfalls and tips when buying a physiotherapy clinic


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.

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.

About Physio Inq - Your Business Partner for 15 Years

Physio Inq is a trusted franchise network that has been helping Australians achieve their business goals for 15 years. We are committed to empowering small businesses to thrive and grow.

If you're interested in discovering how Physio Inq can benefit your small business, we invite you to get in touch with our team. Please visit our Business Network Information Page to submit an inquiry or learn more about our franchise opportunities.

We look forward to supporting your business success journey!

Handy Tips And Tricks From The People With 15+ Years Experience In Buying and Selling Physiotherapy Clinics

pitfalls and tips when buying a physiotherapy clinic


The information provided on this blog is intended for educational and informational purposes only. It is not intended to be a substitute for professional advice or treatment. Always seek the advice of a qualified professional with any questions you may have regarding a medical condition. Never disregard professional medical advice or delay in seeking it because of something you have read on this blog.

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