Allied health practice valuation

The worked example

A physiotherapy practice on one site turns over $1.6 million with five physiotherapists, three employed and two contractors. The owner treats patients three days a week, about a tenth of the billable hours, and runs the practice on the other two days with no practice manager, drawing a salary and super of $160,000. The rooms belong to the owner's super fund, which charges $95,000 a year against a market rent of $80,000, and the year included $8,000 of one off costs for a new booking system. The accounts show profit before interest, tax, depreciation and amortisation of $210,000.

Replacing the owner's clinical work with an experienced physiotherapist for three days a week costs about $72,000 with super and on costs, and a manager for the other two days about $36,000. With rent at market and the one off costs added back, maintainable earnings are $285,000. Three employed clinicians and an owner delivering under half the billable hours put it in the group practice band, 3.0x to 4.0x, or $855,000 to $1,140,000. A waitlist and a low reliance on the owner work for it, and two contractors who keep their own patient lists work against it, so the answers point to the middle third: $941,000 to $1,055,000.

Illustrative example, built from typical figures for a practice of this kind, not a client engagement. The wage, management cost, rent and costs are assumptions.

How to read the result

The range

The headline is the third of the band your answers point to. The band range shows the full span for practices of your size and structure, and What moves it names the answers behind the third.

Solo or principal led, 2.0x to 3.0x

The owners deliver more than half the billable hours, or the practice has fewer than two employed clinicians. Much of the value follows the owner, so buyers pay less for it. A practice where the owner is the only clinician often sells as a client list for a fixed sum.

Group practice, 3.0x to 4.0x

Two or more employed clinicians, with the owners delivering half the billable hours or less. Settled clinicians, several payers and steady referrals move a practice up the band.

Multi site or multidisciplinary group, 3.5x to 5.0x

More than one site or discipline, a practice manager running operations, and owners who treat few or no patients. Buyers pay most for a practice that runs without its owner.

No earnings based value

When the market wage and the adjustments take maintainable earnings to zero or below, a buyer pays little for goodwill, and the value rests on equipment, fit out and the client list.

Larger practices

Above about $2 million of maintainable earnings, practices sold through a formal process can sit above these bands, and a comprehensive valuation is the right next step.

Questions owners ask

Why is the value lower than my profit suggests?

Your profit includes the patients you treat and the hours you spend running the practice. A buyer has to pay a clinician and, if there is no manager, someone to run it, so the multiple applies to what is left.

How do I estimate the cost of replacing my clinical work?

Start from what you would pay an experienced employed clinician in your discipline for the hours you treat, and add super at 12 per cent and your usual on costs. If your practice uses contractors, what a contractor would keep from the same fees is a fair check. Award rates are minimums, so use what the market pays in your area.

Does NDIS revenue help or hurt?

Buyers value NDIS revenue with clean claiming records, because the funder pays reliably. Miro Capital's psychology guide of July 2026 puts a practice with 30 per cent or more of its revenue from the NDIS at least half a turn above a Medicare only practice. Heavy reliance on one funder, or claiming that would not pass an audit, works the other way.

Do contractors or employees make a difference?

Employed clinicians with tenure and restraints are more likely to stay after a sale, while contractors who keep their own patient lists can take those patients with them. Engagement models carry legal, tax and payroll tax consequences, so talk to your advisers before you change them.

What about a practice with one clinician?

A practice where the owner is the only clinician often sells as a client list for a fixed sum, because the patients follow the clinician. The tool still shows the solo band, so you can see what the earnings would support.

When do I need a formal valuation?

For a sale, a partner joining or leaving, finance or a family law matter, the other side will want a valuation it can rely on. Our indicative valuation starts from $4,500 and a comprehensive valuation from $13,500.

Typical results

For a practice with $300,000 of maintainable earnings, the bands give $600,000 to $900,000 when it is solo or principal led, $900,000 to $1,200,000 as a group practice on one site, and $1,050,000 to $1,500,000 as a multi site or multidisciplinary group with a practice manager. Moving from principal led to a group practice lifts the middle of the range from 2.5x to 3.5x, about $300,000 at these earnings, which is why reducing the practice's reliance on its owner adds so much value.