Pitfalls and Handy Tips When Buying An Existing Physiotherapy Practice or Business
Monday, June 10, 2019
When considering buying an existing Physiotherapy Clinic or Allied Health Practice, there are many things to consider. Before stepping foot in a clinic, you need to conduct rigorous digital due diligence and research. When you come to the negotiation stages, you need to ensure you are not overcompensating for perceived value adds.�
Over the years, Physio Inq has bought and sold many clinics. Some have worked well… while others have been cash cows! In this article, we will be going into some of the lessons Physio Inq has learned (the hard way!).
If you are:
- An inspired person looking to create a meaningful and financially fulfilling asset
- An investor, business owner, Allied Health practitioner or anything in between
- A hard worker and amazing human
Then this article is for you!
In order to help people thinking about purchasing an existing Physiotherapy Clinic or Allied Health Business, we’ve put together the holy grail of information.�
We’ve created our FREE Downloadable 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.
If you’re thinking about purchasing an existing Physiotherapy Clinic or Allied Health Business, chances are you’ve 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 important things I should be aware of when purchasing an existing Physiotherapy clinic to make sure the business is a success?
- Do I have what it takes to own my own clinic?
- How to I recruit? Where do I find good staff? How do I get them to work for me?
Regardless of if you’ve made an offer on a clinic, or just thinking about purchasing a business… read our guide to find out what you could be doing wrong!
There’s a reason why Physio Inq is Australia’s Franchise Network of the Year (2020)
What are the most common pitfalls when purchasing a Physiotherapy Practice or business?
Pitfall Number 1: Keeping the owner as an employee in a significant capacity
They hold onto the old culture and ways of doing things and may be resistant to change. It may seem enticing to prevent a loss of clients, but it needs to be a short period of time to ensure a smooth exchange. In addition to this, when they are on board as a contractor, make sure that they are under fair work law. You can't have them working in your business as a contractor on a high rate. it is illegal and it chews up your profit! Keep them on at no more than 10% of your trade as a contractor, or part time as an employee. It is very likely that their CVA will drop after settlement. Don't be upset, this is just human nature...
Pitfall Number 2: Not having enough working capital
Make sure you have plenty in the bank. At least one to two months of operational expenditure in either excess cash or line of credit. This ensures you sleep well! This varies from clinic to clinic, depending on if you have private, or workers compensation clients. Workers’ compensation can be slow to pay, but your rent and employees need to be paid quick!
Pitfall Number 3: Relying on old referrals
When purchasing a Healthcare business, it can be easy to get sucked into the number of referrals the business has per month and pay extra to compensate for these numbers. The key learning here is that it’s important to always be conservative.
Truth is, it is likely that you will have at least a 25% drop off in your new patients. This is due to people stopping to refer for several reasons.
Pitfall Number 4: Not understanding statistics prior to buying
There are key metrics that Physio Inq recommends all to-be business owners should know.
Do you understand client visit average? Do you know what is good or bad?
If the clinic has an enormous CVA, and you can't keep it up, then you are heading for failure.
Look for upsides in the client visit average for something the business can grow into!
Pitfall Number 5: Not having a marketing and business plan
Going in without defined goals on all fronts is a recipe for wandering in life! Make a great business plan, have timelines attached, and embrace it! Share it with your team and let them know the path.
Learn more about the top pitfalls all new
business owners (always) make!
And how to avoid them!
Top Tips For Taking Over An Existing Physiotherapy Clinic or Allied Health Business
Tip Number 1: Know your stats in the Due Diligence process
Get all of the stats. If they are in the dark ages and have a paper diary, then wither don't buy it, or sit down and actually count the patient manually. Seriously. You need to know how many new patients they have each month. How many returning clients do they have? How many old patients coming for new injuries? Know the stats and be prepared!
Tip Number 2: Do a clinic makeover fast!
This puts your stamp on it, and lets the staff know you are here for the right reason, are going to make a good change and here for the long term.
Tip Number 3: Get out in the community as much as you can
Don't be afraid of being the new owner. Be proud of it. If you are afraid of anyone knowing that you have taken over, then you might not have thought about the decision enough! Buying a clinic means that you are the new big dog in town and you should let everyone know. Be respectful to the old owner's reputation and get out there and sell yourself and the clinic!
Tip Number 4: Get connected with staff organically
Don't force relationships, let them evolve. You can't make people like you, but you can act in a way that shows you are the leader and you care about them. Take them to lunch, thanks them for sticking around and have one on one meetings with them to chat about them.
Tip Number 5: Get a great team around you
Have a marketing consultant (you are not a marketer), have an accountant to give you advice (you are not an accountant), have a great legal team (you are not a lawyer), have a great business mentor (this may be your first time in business). Draw upon others for success and see your business thrive.
Handy Tips And Tricks From The People With 15+ Years Experience In Buying and Selling Physiotherapy Clinics
If you have any further questions or need assistance opening your physiotherapy business you can contact us today to learn more! Reach out to our Pinq Partner Cultivator, James Appleton on email@example.com or by phone on 0419 137 400.
Alternatively, you can check out more information about starting a Physio Inq franchise today!
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