What is my physio or allied health practice worth? How allied health practices are valued in Australia.
An allied health practice is usually valued as a multiple of its maintainable earnings, after allowing for what it would cost to replace the owner's own clinical work. In most small practices, a large share of the profit is the owner treating clients, and a buyer will have to pay a practitioner to do that. What moves the value most is how many clients come back and who refers them, how much depends on you, whether your practitioners will stay, and the lease. Treatment tables and equipment are normally included in the price.
This guide covers physiotherapy, podiatry, chiropractic, osteopathy, occupational therapy, speech pathology, psychology, exercise physiology, dietetics and similar practices. Dental practices have their own guide: What is my dental practice worth? GP and medical practices: What is my medical practice worth?
Start with maintainable earnings
Start from net profit before tax and add back the usual owner items: depreciation, interest, private use of a car, and genuine one-off costs. Add-backs explained.
Then make the practice-specific adjustment:
- The cost of replacing your own clinical work. If you treat clients and take your income as profit rather than a wage, a buyer has to pay a practitioner to see those clients. Contractor practitioners are commonly paid a share of the fees they bill, often around 50–65% in allied health, or a salary if employed. Deduct that cost for the work you do.
- Unpaid or underpaid help, such as a partner who runs reception, bookings or the books, is costed at a market wage.
What's left is the profit the practice makes, separate from what you earn as a practitioner. That is what a buyer is really paying for.
What moves the price
Clients, rebooking and referrals
- Buyers want to see active clients over the last 12 months, how many new clients arrive each month, and how often clients rebook. A practice with a full diary and a strong rebooking rate is worth more.
- Referral sources matter: local GPs, specialists, sports clubs, aged care, schools or NDIS support coordinators. Referrers who send clients to the practice, not only to you, add value. If one or two referrers send most of the work, a buyer will ask what happens if they stop.
How much depends on you
If most clients book to see you, some will leave when you do. Buyers allow for that with a lower price, or ask you to stay on for a handover period, often several months, treating clients and introducing the new owner. Practices where other practitioners already see most clients are easier to sell and usually worth more.
Your practitioners
- Show each practitioner's share of billings (names removed at first), how long they've been with you, and whether they're employees or contractors.
- Payroll tax on payments to contractor practitioners has been tested in some states. A buyer's accountant will check how your practitioners are engaged, so have the agreements ready.
- Restraint and non-solicitation clauses in practitioner agreements help protect the client list after a sale.
Funding mix
Know your split between private clients, private health insurance, Medicare chronic disease management plans, NDIS, DVA, and workers' compensation or transport accident claims. Each has its own rules. Provider numbers and health-fund registrations are usually personal to each practitioner and location, so a buyer and their practitioners will need their own. Allow time for this before settlement. Heavy reliance on one scheme, such as NDIS, is a risk a buyer will price in.
Registration
Physiotherapists, podiatrists, chiropractors, osteopaths, occupational therapists and psychologists are registered with Ahpra; speech pathologists and dietitians are self-regulated through their professional bodies. A buyer who will treat clients needs the right registration; a buyer who only owns the practice will need registered practitioners in place from day one.
Equipment, clinical records and the lease
- List treatment tables, rehab or gym equipment, ultrasound, shockwave or other machines, and practice software, with age, condition and any finance.
- Client records go with the practice, but privacy law applies. Plan how clients will be told about the change of ownership, and make sure the records system transfers cleanly.
- A buyer will want enough lease left, including options, to earn back what they pay, and rooms that suit the practice. Check the make-good clause.
A worked example
All figures are illustrative, made up for this example, and are not industry data.
A suburban physiotherapy practice has four treatment rooms and a small rehab gym. The owner treats clients four days a week, and three contractor physios work alongside them. The owner's partner runs reception part-time without pay. Net profit before tax was $230,000, and the owner takes no wage: their income is the profit. The owner's own treatments billed $260,000.
| Item | Amount |
|---|---|
| Net profit before tax | $230,000 |
| + Depreciation (tables, gym and treatment equipment) | $12,000 |
| + Interest on equipment finance | $3,000 |
| + Private use of the owner's car | $4,000 |
| – Cost of a physio to do the owner's treatments (55% of $260,000) | –$143,000 |
| – Market wage for the partner's unpaid reception | –$30,000 |
| Maintainable earnings (EBITDA) | $76,000 |
If buyers were paying, say, 2.0 to 3.0 times earnings for a practice like this (illustrative), it would be worth about $150,000 to $230,000, including the tables, gym and equipment.
That's very different from "the practice makes $230,000 a year", because most of that is the owner's own treating. Two things would move it within the range: how many of the owner's clients stay with the practice, and whether the contractor physios stay. A good handover and settled practitioners push it toward the top.
What buyers of allied health practices will ask for
- Two to three years of profit and loss statements, plus the current year to date
- Billings by practitioner, and the mix of private, health-fund, Medicare, NDIS, DVA and compensation work
- Active clients, new clients per month, rebooking rates and the main referral sources
- Practitioner and staff agreements, roles, hours and pay (no names at first)
- A list of equipment with age, condition and any finance
- The lease, including options, the current rent and the make-good clause
Selling it yourself? How to sell your business yourself in Australia. Not sure about appraisal versus valuation? Business appraisal vs valuation.
What's your practice worth?
Upload your P&L, and add your lease and staff list if you have them. AUS Brokers works out your maintainable earnings with the add-backs explained, applies the multiple range for practices of your size, and checks comparable practices for sale in your state. You can add a buyer-ready profile to market it yourself.
An indicative business appraisal only. AUS Brokers doesn't provide valuations, and doesn't act for buyers or sellers. If you need a valuation for finance or a partner buy-out, use a qualified valuer. Selling in Victoria? Vic Brokers can sell it for you.
Frequently asked questions
How much is a physio or allied health practice worth in Australia?
It depends mainly on its maintainable earnings: the profit after adding back owner items and deducting what it would cost to replace the owner's own clinical work. That figure is multiplied by what buyers pay for practices of that size. Strong rebooking, settled practitioners, a spread of referrers and a good lease push the price up.
Why deduct the cost of my own treating?
Because a buyer has to pay a practitioner to see those clients. If the owner's clinical income is counted as profit, the practice looks far more valuable than it is to anyone who isn't you.
Will I have to stay on after the sale?
Often, yes. Buyers commonly ask the owner to stay for a handover period, treating clients and introducing the new owner or practitioners. The more clients book to see you personally, the longer they'll want.
Can someone who isn't a practitioner buy my practice?
Usually yes, but they'll need registered practitioners in place to treat clients from day one, and they'll take on the provider numbers and registrations needed for each practitioner and location.
Does NDIS or Medicare work affect the price?
It can. Steady NDIS, Medicare or DVA work brings reliable income, but a buyer will look at how much of the practice depends on one scheme and how exposed it is to rule changes.
Is an appraisal enough for a bank or a partner buy-out?
No. An appraisal is an indicative estimate to help you plan and price a sale. For finance, a partner buy-out, family law or tax, you need a formal valuation from a qualified valuer.
General information only, not financial, tax or legal advice. Figures in the worked example are illustrative.