Most allied health practice owners will sell their practice once. It is the largest financial transaction of their professional life, and the difference between a well-planned exit and a poorly structured one can be hundreds of thousands of dollars. Yet most practice owners start thinking about exit too late, and without the right advisors.
This is the complete financial guide to selling your allied health practice — from understanding your valuation to structuring the deal for maximum after-tax proceeds.
How Allied Health Practices Are Valued
Allied health practices are valued on an EBITDA multiple — earnings before interest, tax, depreciation, and amortisation. The multiple depends on the practice’s commercial maturity, revenue stability, and risk profile.
| Practice Type | Typical EBITDA Multiple | Key Value Drivers |
|---|---|---|
| Small sole-trader practice (<$500K revenue) | 1.0–1.5× | Owner-dependent, limited systems |
| Growing practice ($500K–$2M revenue) | 2.0–3.0× | Team-based, some systems, NDIS mix |
| Established practice ($2M–$5M revenue) | 2.5–4.0× | Management team, strong systems, diversified revenue |
| Multi-site group ($5M+ revenue) | 3.5–6.0× | Scalable model, low owner-dependency, strong EBITDA |
The multiple is not fixed — it’s negotiated based on the specific characteristics of your practice. A practice with strong systems, low owner-dependency, diversified revenue, and a management team in place will command a premium multiple. A practice where the owner sees 80% of clients and has no documented systems will trade at a discount.
The Tax on Sale — What Most Practice Owners Don’t Plan For
The tax treatment of a practice sale depends on how the practice is structured and how the deal is structured. This is where the difference between a well-advised exit and a poorly advised one is most stark.
Small Business CGT Concessions
The most powerful tax tool available to allied health practice owners on exit is the Small Business Capital Gains Tax (CGT) concessions. If your practice qualifies, you may be able to reduce or eliminate CGT on the sale entirely. The four concessions are:
- 15-year exemption: If you have owned the business for 15+ years and are 55+ or retiring, the entire capital gain may be exempt from CGT
- 50% active asset reduction: Reduces the capital gain by 50% for active business assets
- Retirement exemption: Up to $500,000 of capital gain can be exempt if contributed to superannuation (or if you are under 55, it must go to super)
- Rollover: Defer the capital gain by rolling it into a replacement asset
These concessions can be stacked. A practice owner who has held their practice for 15+ years, is 55+, and structures the sale correctly may pay zero CGT on a $1M+ capital gain. But the eligibility conditions are strict, and the planning must be done before the sale contract is signed — not after.
Asset Sale vs Share Sale
Most allied health practice sales are structured as asset sales (the buyer acquires the goodwill, equipment, and client relationships) rather than share sales (the buyer acquires the company). The tax treatment differs:
- Asset sale: CGT applies to the goodwill component. The small business CGT concessions are available for goodwill.
- Share sale: CGT applies to the shares. The small business CGT concessions may apply if the shares are active assets. The 50% CGT discount applies if shares have been held for 12+ months.
Buyers generally prefer asset sales (they get a stepped-up cost base and avoid inheriting the company’s liabilities). Sellers often prefer share sales (cleaner, and the CGT concessions can be more favourable). The negotiation of sale structure is one of the most important financial decisions in the exit process.
How to Maximise Your Exit Price — The 3-Year Plan
The practices that achieve the highest sale prices are those that started planning their exit 3–5 years before they wanted to sell. Here’s what that looks like:
- Year 1–2: Build the systems. Document your processes, build a management team, reduce owner-dependency. Every hour you spend building systems adds multiple dollars to your sale price.
- Year 2–3: Optimise the financials. Clean up your P&L, remove personal expenses from the business, maximise EBITDA. Buyers pay a multiple of EBITDA — every dollar of EBITDA improvement is worth 2–4× at sale.
- Year 3: Prepare for sale. Get a formal valuation, engage a broker or M&A advisor, prepare your information memorandum, and identify potential buyers (strategic acquirers, private equity, competitor practices).
The free CARE Assessment scores your practice on the Enterprise Value & Exit dimension — the commercial readiness of your practice for sale. It’s the starting point for understanding where you are and what needs to change before you can exit on your terms.
See also: Allied Health Practice Valuation and Exit Planning | Allied Health Practice Profit Margins
