Pitfalls and Handy Tips When Buying An Existing Physiotherapy Practice Or Business

Sunday, June 09, 2019

Over the years I have bought and sold many clinics, some have worked well, others have been dogs! IN this article, I go into some of the lessons I have learned when buying physiotherapy and allied health clinics!

Avoid the pitfalls and embrace the tips! Good luck!

The Pitfalls

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...

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 if you have private, or workers compensation clients. Workers comp can be slow to pay, but your rent and employees need to be paid quick!

Not having enough working capital

3. Relying on old referrals

 Understand that you will have at least a 25% drop off in your new patients. Always be conservative.

4. Not understanding statistics prior to buying

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 upside in the client visit average for something the business can grow into!

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.


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!

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.

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!

Get out in the community as much as you can

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.

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.

If you have any further questions or need assistance opening up your physiotherapy business give us a call on 1300 731 733 today, or email franchising@physioinq.com.au for more info.

Live a Business Life with Less Limits.

Are you interested in owning a health care business, or do you require help running yours?


Are you interested in owning a health care business, or do you require help running yours?


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