In 2016, William Buck in conjunction with the Australian Physiotherapy Association, conducted a benchmarking study on physiotherapy businesses. Whilst the report was predominantly a cost analysis, some key business challenges faced by physiotherapists were highlighted.
As with other healthcare providers the majority of physiotherapists work in the industry because they are dedicated to the profession and improving the healthcare of Australia. When choosing their career, most don’t envision becoming a business owner, but increasingly one way or another, more physiotherapists are finding themselves in this position. Their true passion is taking care of their patients, and by default their energy is generally harnessed towards the patient, not the business. Passion is important, and the above notion is completely fine, if your business is setup to allow you to.
The benchmarking study identified two main challenges that physiotherapy business owners struggle with the most – the growth-phase of their business and exit /succession planning.
Practice growth was one of the key themes identified in the survey, with the vast majority of benchmarked practices identifying that they were looking to grow organically. However, the results of the study suggest that those who had managed to grow were eating into their bottom line. There could be many reasons why this is the case but, my initial thoughts are that practice owners can grow a practice to a reasonable level without sacrificing too much of their clinical work. However, there is a tipping point where there are not enough hours in the day to achieve both. If they haven’t already, practice owners need to re-assess their business/strategic plans and ensure they have thought about and documented what they are trying to achieve, and how they are going to do so. Strategic plans should be living documents which change and adapt, as the industry moves and as your business and life goals change.
Ask yourself the question, can my business continue to function and operate as it currently does if I was no longer here?
If the answer to this question is no, then it is likely that it may be a struggle to sell the practice for the price you think it is worth. Practices generally sell for a multiple of their future maintainable earnings – therefore, in planning for your exit strategy the focus needs to be on ensuring the business is as profitable as can be. It is also crucial to ensure that the systems and processes you have in place will allow an easy transition for a potential purchaser. When planning your exit strategy or succession plan, it is important to remember that it takes time, so it is vital you don’t leave it until the year you wish to retire.
You don’t need to be everything to everyone. Your advisors are equipped with the business acumen to compliment your clinical skills and passion for success. If you wish to discuss your practice and strategy, please feel free to contact us.