Is your Medical Practice set up for sustainable success?
Running a medical practice requires more than delivering excellent patient care. In today’s regulatory, financial and competitive environment, a truly successful practice is one that balances clinical integrity, commercial performance and legal Compliance.
Many practice owners focus heavily on patient outcomes (as they should), but neglect to regularly assess the health of the business itself. Just as preventative care supports long‑term patient wellbeing, proactive business management supports profitability, stability and growth.
Today, the strongest practices assess performance across four core pillars:
• Profit – financial performance and cash flow
• People – doctors, staff and contractors
• Patients – experience, retention and trust
• Practice – operations, reputation, risk and compliance
Below are a series of practical indicators across each pillar to help you assess whether your practice is set up for sustainable success, and where targeted legal expertise may help.
Profit indicators: Is the business financially sound?
Is cash increasing month-to-month?
Profitability starts with a simple question: is there more money in the business account at the end of the month than at the start?
Consistent cash growth (after expenses, tax and liabilities) is a strong indicator of financial health. If cash is stagnant or declining, it may signal:
• pricing misalignment,
• rising overheads,
• inefficient billing or collections, or
• structural issues in how the practice is set up.
Monitoring cash flow; not just revenue, is essential for informed decision-making.
How long are accounts receivable outstanding?
Delayed payments reduce profitability and increase administrative burden. While this varies between practice types, excessive outstanding accounts may indicate:
• unclear billing policies,
• delayed invoicing,
• ineffective follow-up procedures, or
• misalignment between services delivered and payment expectations.
Practices with clear engagement terms and streamlined billing processes typically experience stronger cash flow and fewer disputes.
Does the practice have a cash buffer?
A cash buffer allows a practice to manage:
• unexpected expenses,
• regulatory or compliance costs,
• technology upgrades, and
• strategic growth opportunities.
A lack of reserves increases stress and risk, particularly during periods of change or external disruption. Building a buffer is often a sign that a practice is operating within its means and planning ahead.
Are overheads growing faster than revenue?
Some expense growth is inevitable as a practice scales. However, when overheads outpace revenue, profitability erodes.
Regularly reviewing expenses against income helps identify:
• inefficient staffing models,
• under-utilised space or resources, and
• contracts that no longer suit the practice’s size or direction.
Sustainable growth depends on controlled, intentional cost increases.
Is inventory being managed effectively?
For practices that hold stock, slow-moving or expired inventory ties up cash and increases risk.
Strong practices:
• monitor stock turnover,
• avoid over-ordering,
• manage expiry risks, and
• align purchasing with actual demand.
Effective inventory management directly supports both profitability and patient safety.
People indicators: Is the team supporting growth?
Is staff and practitioner turnover low?
High turnover is costly and disruptive. It can signal:
• unclear expectations,
• poor contractual arrangements,
• inadequate onboarding or support, or
• leadership and management issues.
Practices with stable teams benefit from stronger patient relationships, operational efficiency and brand reputation.
Are roles, contracts and expectations clear?
Clarity reduces disputes, risk and inefficiency.
Successful practices ensure that:
• employment and contractor agreements are fit for purpose,
• roles and responsibilities are documented,
• policies and procedures are current and accessible, and
• performance expectations are clearly communicated.
From a legal perspective, poorly structured independent practitioner arrangements or outdated agreements can expose practices to compliance and financial risk.
Patient indicators: Is the practice building trust and retention?
Are patients returning and referring?
Patient retention is one of the strongest indicators of a healthy practice. When patients return and refer others, it usually reflects trust, consistency and a positive overall experience.
Low retention or declining referrals may point to issues such as:
• Limited appointment access and long wait times,
• communication gaps,
• inconsistent patient experience, or
• misalignment between patient expectations and service delivery.
Is the patient experience consistent and well-managed?
From first contact to follow-up care, consistency matters. Practices that document patient-facing processes tend to deliver a more reliable experience.
Clear systems around booking, billing, complaints handling and follow-up reduce friction and improve patient satisfaction while also limiting legal and reputational risk.
Is patient feedback understood and addressed appropriately?
Patient feedback, whether formal complaints, informal comments or online reviews, can provide valuable insight.
While not all feedback requires action, patterns should not be ignored. Importantly, practices must manage feedback within advertising, privacy and regulatory constraints, particularly when responding publicly.
Practice indicators: Is the business positioned for the future?
Is the practice financially credible?
A strong credit profile; both personal and business, supports access to:
• financing,
• expansion opportunities, and
• better commercial terms.
Practices with clear financial records, compliant structures and stable cash flow are more attractive to lenders and investors.
Is there a clear strategic direction?
Profitable practices don’t grow by accident. They plan.
This includes clarity around:
• growth objectives,
• succession planning,
• service expansion or contraction, and
• ownership and exit strategies.
Without a clear direction, decision-making becomes reactive, often at the expense of profitability.
Is the practice confidently compliant?
Compliance is not just a legal requirement; it is a commercial asset.
Practices that know they are compliant (rather than assuming they are) reduce risk and increase peace of mind. Key areas include:
• practitioner arrangements,
• advertising and marketing compliance,
• privacy and data handling,
• governance and record-keeping, and
• regulatory obligations.
In our experience, many compliance issues arise not from negligence, but from outdated documents or assumptions that no longer align with current requirements.
You Legal Practice Risk Score: A practical way to check your practice’s legal health
Running a medical or allied health practice is complex. Between patient care, staffing, compliance obligations and commercial pressures, it is not always clear whether your legal foundations are still fit for purpose as the practice grows.
That is why we created You Legal’s Practice Risk Score: a free, 5-minute online assessment for Australian medical and allied health practices. It provides a high - level snapshot of your practice’s legal and operational risk, without legal jargon or judgment.
The assessment helps you identify:
• key legal risk areas
• what you are already doing well
• practical next steps to strengthen compliance
Once completed, you will receive a risk score out of 100, a summary of priority risk areas, and guidance on how to address them.
Find out your Practice Risk Score via this link.
A stronger practice is a more profitable practice
Assessing your practice across profit, people, patients and practice provides a clearer picture of its true health financially, operationally and strategically. The most successful medical practices take a proactive approach: they review, refine and restructure before issues escalate. By looking beyond revenue alone and addressing each pillar together, you place your business in a stronger position for sustainable growth, reduced risk and long-term success.
If you are unsure where your practice currently stands, a structured review is often the first step toward increased profitability and confidence in the future.
Our team works with medical practices to strengthen structure, manage risk and support long-term profitability. If you would like tailored advice on your practice’s performance, governance or growth strategy, contact our team here, to discuss your next steps.