The physical therapy industry is a highly fragmented one that is made up of mostly small, regional practices. You may be considering a partnership for your physical therapy practice, and you want to assess how much your outpatient physical therapy practice is really worth. You don’t want to undersell the business you have worked hard to create and maintain. It’s important to know your practice’s worth. Listed below are a few key financial indicators of how much yours may be worth so that you can confidently walk into a partnership with a physical therapy franchise.
3 financial indicators of how much your outpatient physical therapy practice may be worth
- Net revenue per visit — Your net revenue per visit can vary based on location and other factors. However, a general understanding of your net revenue per visit can help you figure out future profitability and areas for improvement.
- Expenses — One important indicator to look at is your expenses. This includes your total labor expenses and rent expenses. Your practice’s past expenses are typically strong indicators of current value and future profitability.
- Earnings before interest, taxes, depreciation, and amortization (EBITA) margin — The EBITA margin is a metric used to determine performance. By calculating your physical therapy practice’s performance, you’re looking at your business’s cash flow and profit.
Partnerships are a great way for smaller outpatient physical therapy businesses that have made the very best out of the resources they have to gain access to additional tools, resources and expertise. These will only grow the quality of their business. While considering a partnership, it’s important to know where you stand. Each of the factors listed above is an effective means of indicating your physical therapy practice’s current financial value. Not only this, but they also indicate how well your business has performed up until the present moment.
Alliance PTP wants to help you determine the worth of your outpatient physical therapy practice
At Alliance Physical Therapy Partners, we believe that partnership means creating something that is greater than the sum of its parts. We’re proudly bringing together physical therapy practices across the country to help people get the high-quality PT they need. For a more in-depth look at how to determine how much your physical therapy practice may be worth, listen to our Agile & Me: A Physical Therapy Leadership Podcast Series episode.
Contact our team today for more information about how we can help your practice or to find out how you can join our partnership in care.