An Australian GP clinic typically sells for three to six times its normalised annual earnings — with normalised meaning what the practice makes after you strip out the owner-doctor’s billings and recalculate on a market-rate service-fee basis. That range sounds wide, but it’s wide for a reason: a four-doctor suburban practice with private billing and five years left on its lease is a fundamentally different asset from a solo GP running a bulk-billing clinic with a lease expiring in fourteen months.
Most practice owners who haven’t sold before don’t know where they sit in that range. And the gap between assumptions and reality can be significant.
What You’re Actually Selling
When a buyer acquires your GP clinic, they’re not paying for the reception desk, the clinical software licence, or the framed anatomy posters. They’re buying a stream of future practice income — which is the revenue the practice retains after paying its doctors their service fees.
This is the number that’s easy to misunderstand. Your practice might generate $1.5 million in gross billings across three GPs. But if those GPs each receive 65% of their billings as a service fee, the practice retains $525,000. After rent ($80,000), reception and admin staff ($160,000), nursing ($90,000), and other overheads ($60,000), your normalised EBIT might be $135,000. At a four-times multiple, that’s a sale price of $540,000 — not $1.5 million, and not three-times-revenue. The distinction matters enormously.
What also matters: will those three GPs still be there after settlement? If the answer is uncertain, every sophisticated buyer assumes no — and prices accordingly.
The Valuation Method: Normalised EBIT × Multiple
Australian GP practices are valued using an EBIT multiple approach: multiply the practice’s normalised earnings before interest and tax by a factor reflecting the quality and sustainability of those earnings.
The normalisation step is what separates a meaningful valuation from a back-of-envelope guess. Here’s what gets adjusted in a typical practice:
Remove the owner’s billings. If you’re an owner-operator who sees patients, your billings inflate the practice’s apparent performance in a way that doesn’t survive your exit. A buyer has to replace you with a GP on a commercial service-fee arrangement — typically 60–70% of billings. So the valuation model replaces your actual billing contribution with a market-rate service fee that assumes you’re replaced.
Add back personal and non-recurring expenses. Any personal expenses run through the practice (vehicle, mobile phone, travel, professional development beyond market norms) get added back as EBITDA adjustments. One-off costs — a fit-out refresh, a legal dispute, a locum bill during your sabbatical — also get added back.
Adjust for sustainable revenue only. COVID-era billing spikes, temporary Medicare item changes, or one-off government funding injections should be smoothed out. Buyers use three years of adjusted earnings to establish the trend; a single good year doesn’t move the dial.
Once you have normalised EBIT, the multiple depends on the factors below.
What Moves the Multiple Up or Down
The difference between 3x and 6x comes down to a set of specific, assessable factors. None of them are mysterious — they’re just not always obvious to an owner who’s been inside the practice for twenty years.
Number of practitioners. A solo-GP practice is not worth six times anything. It’s worth two to three times normalised EBIT at best — because the entire revenue base leaves with the owner. A three-to-four-doctor practice with contracted practitioners is a genuine business; a solo practice is a job. The multiple reflects this directly.
Billing mix. Private billing attracts higher multiples than bulk billing. A practice where 60%+ of consultations attract a gap fee demonstrates pricing power and patient loyalty. 100% bulk billing isn’t fatal, but it implies thinner margins and more exposure to Medicare rebate changes. Mixed billing practices — particularly those with a strong chronic disease management patient base — tend to attract the strongest multiples.
Practitioner contracts. Buyers want to see signed service agreements with your associate GPs extending beyond settlement — ideally 12 to 24 months. No contracts means no certainty. No certainty means no premium.
Patient panel size and stickiness. Five thousand or more active patients (seen within the last three years) is a healthy benchmark for a suburban clinic. High rates of GP-of-choice continuity — where patients consistently see the same doctor — indicate stickiness. A practice where patients see whoever’s available that day is less defensible than one where 70% of bookings are for a specific GP.
Lease quality. A remaining lease term of less than three years with no option to renew is a problem (sound familiar — the same dynamic that kills cafe valuations applies here). Healthcare practices are physically immovable. A buyer acquiring a clinic needs confidence in the tenancy. Five years remaining plus options is solid; a month-to-month arrangement is a discount trigger.
RACGP accreditation. Accreditation isn’t just a compliance checkbox — it affects patient access to certain Medicare items and signals operational maturity to buyers. Practices without current accreditation face scrutiny.
The Solo GP Problem
I spoke recently with a GP practice owner in regional WA who had been running a busy solo clinic for eighteen years. He had 4,200 active patients, a loyal community following, and gross billings around $700,000 per year. He expected to sell for “a few million.” His normalised EBIT, once his own billings were removed and a market-rate replacement GP was factored in, was around $85,000. At three times that figure — and three times was generous given the solo-practitioner risk — the practice was worth $255,000. The equipment was worth $40,000. Total: approximately $300,000.
He was surprised. He shouldn’t have been; the structure of a solo practice makes this outcome almost inevitable. The value follows the doctor, not the entity.
The solution isn’t to abandon the idea of selling — it’s to recruit an associate GP two or three years before you exit, let them build a patient relationship base, and sign them to a service agreement. That single step can materially change the valuation multiple you’re offered. See when to start preparing — the answer is almost always earlier than you think.
The GP Rule of 3 — and When It Doesn’t Apply
The “GP rule of 3” is an industry shorthand: a general practice is worth roughly three times its annual profit. It captures the floor of the market reasonably well and it’s a useful check on wild optimism.
But it’s not a ceiling. Corporate health groups like Healius, Affinity Health, and National Medics have been acquiring multi-doctor practices at multiples well above three — particularly in metro areas with strong demographics, experienced practitioners, and lease terms that give a new owner runway to build. Private equity has been applying similar logic to allied health platforms, which is pushing multiples across the sector.
If your practice is well-structured — multiple doctors, private billing, signed service agreements, RACGP accredited, solid lease — you can and should test the market rather than accepting three-times as your benchmark. As Miro’s broader analysis of the healthcare acquisition wave covers, the buyer pool for quality practices has expanded considerably in the last five years.
What Corporate Buyers Want
Corporate buyers and private equity groups are not buying your practice; they’re buying a platform for adding more GPs and services. This changes what they value.
They want practices they can grow, not practices that are maxed out. A clinic operating at capacity with a twelve-month wait list for new patients looks impressive but offers a buyer limited upside. A clinic with one or two consult rooms underutilised — capacity to add a GP or nurse practitioner — is more interesting.
They also want practices that don’t fall over if one GP leaves. Recall systems, patient health summaries, chronic disease registers, nursing-led care plans — all of these indicate a clinical operation that runs above the individual. Practices where the owner-GP holds everything in their head are precisely the kind that corporate buyers discount heavily.
How Early to Start Preparing
The honest answer is five years before you want to sell — and most owners start the conversation two years too late.
The things that move a GP clinic’s value — recruiting and retaining associate GPs, building a mixed-billing patient base, renewing a lease on good terms, investing in recall and care coordination systems — don’t happen overnight. A practice that starts deliberately building these factors at year fifty-five of the owner’s career is in a fundamentally different position from one that starts at sixty-three.
Preparing your practice for sale is its own topic, but the short version: clean your financials, get your service agreements documented, renew your lease if it’s within three years of expiry, and understand what the tax implications of a sale look like for your particular structure before you’re too close to an exit to adjust.
What a Realistic Number Looks Like
To put some numbers around it: a three-GP suburban clinic in Western Australia with mixed billing, $1.4 million in gross billings, $490,000 retained by the practice, and $210,000 in normalised EBIT might reasonably attract offers in the $840,000 to $1.05 million range at four to five times. Add a fourth GP on contract and shift the billing mix further toward private fees, and you’re looking at $1.3M to $1.8M.
A solo GP with $600,000 in gross billings and $75,000 in normalised EBIT (after notional replacement cost) might sell for $200,000 to $250,000 on a good day — plus equipment.
Those are illustrative, not guarantees. Every practice is different, and the market has shifted materially in the last eighteen months. But they give you a sense of the range and the variables that determine where you sit within it.
If you want to understand what your practice is worth before you’ve committed to selling — or before you start talking to brokers who have their own incentives — use our valuation calculator or get in touch. We work with practice owners at all stages of thinking, from curious to committed.
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