Allied health valuations that separate the practitioner from the practice.
For physiotherapy, psychology, podiatry, occupational therapy and multidisciplinary practices, and the accountants and lawyers advising them. Practice sales, buy-ins, CGT concession claims, family law and restructures.
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An allied health practice valuation determines the market value of a physiotherapy, psychology, podiatry, occupational therapy or similar practice: and, critically, how much of that value is transferable rather than personal to the principal clinician. Oliver Group prepares evidence-led, signed valuations for practice sales, associate buy-ins, small business CGT concession claims, family-law matters and restructures, concluding at the most supportable position within a defensible range.
When an allied health practice needs a valuation
Most allied health valuations are triggered by a transaction or a statutory requirement: a practice sale, an associate buying in, a principal exiting under the small business CGT concessions (Division 152 ITAA 1997), a restructure under Subdivision 328-G, a family-law property settlement, or a related-party transfer where the market value substitution rule (s 116-30) applies. In every one of those settings the number will be tested by someone whose job is to disagree with it: the ATO, the other side's lawyer, or the incoming buyer's accountant. The valuation therefore has to be built on evidence a reviewer can follow, not a multiple asserted from a broker's rule of thumb.
- ·Sale of the practice to an incoming clinician or corporate group
- ·Associate or partner buy-in and buy-out valuations
- ·Small business CGT concession claims on exit: Div 152, including the active asset test (ss 152-35 and 152-40)
- ·Family-law property settlements where the practice is a principal asset
- ·Restructures from sole trader or partnership to company or trust (Subdiv 328-G rollover)
- ·Related-party transfers where the ATO can substitute market value (s 116-30)
- ·Division 7A ITAA 1936 matters where practice value affects loan and distribution positions
Separating you from your practice: where the valuation is won or lost
In a principal-clinician practice, some of the goodwill belongs to the business and some of it walks out the door with you. Personal goodwill, patients who rebook because of the individual clinician, referrers who refer to a name rather than a clinic, is not transferable and cannot honestly be sold, taxed or divided as if it were. Transferable practice goodwill, the brand, the location, the systems, the treating team, the referral relationships that survive a change of owner, is what a willing-but-not-anxious buyer under the Spencer v Commonwealth principle actually pays for. Every allied health valuation Oliver Group prepares documents this split explicitly, with the evidence for each side, because it is the first thing a sceptical reviewer attacks. A valuation that ignores the distinction produces a number that looks impressive and collapses under review.
Rebooking and recall rates: proof the revenue survives a handover
Maintainable earnings in an allied health practice rest on whether patients come back when the principal is not the one treating them. Rebooking rate, recall conversion, average visits per episode of care and the share of appointments delivered by non-principal clinicians are the practice-level evidence of transferable revenue. A clinic where associates deliver most of the consultations and rebooking rates hold across practitioners supports a materially stronger goodwill position than one where the principal's diary is the business. Practice management systems hold this data as standard reports; part of the engagement is extracting and presenting it so the working file shows, rather than asserts, that revenue is maintainable under new ownership.
Referrer and payor concentration: who actually controls the revenue
Allied health revenue rarely comes from one place. A typical file shows a mix of GP chronic disease management (CDM, formerly EPC) referrals, NDIS participants, plan-managed, self-managed or agency-managed, workers compensation insurers, DVA, private health fund rebates and full-fee private patients. Each channel carries different risk. CDM referrals often concentrate around a handful of referring GPs; if a large share of new patients traces to one general practice, that is referrer concentration and it caps the supportable multiple. NDIS revenue depends on plan continuity and scheme pricing arrangements. Workers compensation and DVA work is fee-scheduled and administratively heavy but tends to be sticky. The valuation maps revenue by payor and by referrer, because a buyer, and the ATO, will.
Contractors, service entities and the exposure hiding in the structure
Psychology practices in particular commonly run associate models: clinicians engaged as contractors paying a facility or service fee to a service entity, rather than employees on wages. The model affects the valuation twice. First, the margin: a service-fee model earns the practice a percentage of billings rather than the full clinical margin, and maintainable earnings must reflect the arrangement as it actually operates. Second, the contingent exposure: contractor arrangements in health practices have been an active area of payroll-tax scrutiny in several states, and reclassification risk, with payroll tax, superannuation and entitlements applied retrospectively, is a liability a diligent buyer prices in. The valuation identifies the exposure where the file supports it; whether the structure itself is compliant is a matter for the practice's accountant and lawyer. Oliver Group prepares independent valuations only and does not provide tax or legal advice.
The principal's wage: normalising for the hours you actually treat
Where the principal treats 30-plus hours a week, draws a modest wage and takes the rest as profit, the reported earnings overstate what a buyer would earn: because the buyer must pay a market-rate clinician to do that work. Owner-clinician wage normalisation replaces the principal's actual drawings with a market salary for the clinical hours worked, plus a management loading for running the practice. The adjustment is often the single largest normalisation in an allied health valuation and frequently converts an apparently profitable practice into a marginal one. It is also the adjustment most often done badly: a defensible file documents the hours, the role and the market benchmark used, so a reviewer can trace the number rather than take it on faith.
Which package fits an allied health practice
Retrospective valuations at historical dates attract a $495 surcharge per date, and additional entities, a common feature of service-entity structures, are $795 each. Fees are fixed at engagement and never contingent on the outcome. If a client needs the number to land somewhere specific, we will say so and decline the engagement on those terms. Oliver Group's fees are set by the annual turnover of the business: a Small Business Valuation is $1,495 + GST for turnover under $2 million, a Medium Business Valuation is $2,495 + GST for turnover between $2 million and $10 million, and a Large Business Valuation is $3,495 + GST for turnover over $10 million. Small-business reports are delivered in 2 business days and medium-business reports in 3 business days; the delivery date for a Large Business Valuation is agreed before commencement. Delivery time starts once payment and all required information have been received. Retrospective valuation dates are +$495 each and additional entities are +$795 each. The fee is fixed in writing before work begins and never depends on the concluded value.
Common questions.
How do you separate personal goodwill from practice goodwill in an allied health valuation?+
By evidence rather than assertion. Rebooking rates across clinicians, the share of revenue delivered by non-principal practitioners, referrer spread, brand and systems all indicate transferable goodwill; revenue that traces solely to the principal's personal reputation indicates personal goodwill. The report documents the split and the evidence for it, because the split is the first thing tested in an ATO or family-law review.
Will the ATO accept a valuation that excludes the principal's personal goodwill?+
No valuer can promise ATO acceptance, and any firm claiming to be ATO-approved is misrepresenting how review works. What can be done is preparing the valuation with the ATO's market valuation guidance in mind, a reasoned goodwill split, documented evidence, appropriate methodology, so the position is defensible if reviewed. Your accountant then applies the tax provisions; Oliver Group is not a registered tax agent and does not provide tax advice.
What is an allied health practice worth: is there a standard multiple?+
There is no standard multiple. Practices with strong associate delivery, diversified referrers and healthy rebooking data support materially higher multiples than principal-dependent clinics with concentrated referral sources. A business is worth a supportable range, not a single point, and Oliver Group's report concludes at the position within that range that methodology and evidence best defend.
Does engaging clinicians as contractors instead of employees reduce the practice's value?+
Not automatically, but it changes what is being valued. A service-fee model earns a different margin from an employment model, and contractor arrangements can carry contingent payroll-tax and reclassification exposure that a buyer will price. The valuation reflects the structure as it actually operates and identifies the exposure; whether the structure should change is a question for your accountant and lawyer.
Is a family-law valuation of a practice different from a valuation for sale or CGT?+
The valuation basis can differ, and the instructions matter. Family-law matters may require consideration of value to the owner rather than a pure market-sale hypothesis, and the treatment of personal goodwill is often contested. Oliver Group prepares the valuation on the instructed basis, states that basis explicitly in the report, and retains the working file for 10 years so the position can be re-examined if the matter runs.
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Small Business Valuation
$1,495 + GST
For a business with annual turnover under $2 million. Signed and delivered in 2 business days. Delivery time starts once payment and all required information have been received. The fee is fixed in writing before we start and never tied to the outcome.
Larger business? Tell us in the form and we recommend the right package. All fees