Detailed Allied Health Business Startup Guide + Tools

Deciding to go out on your own and start a business can be a daunting task. You're great at what you do, don't let the compliance of starting and running a business get in the way! Below is our detailed guide to starting an allied health business. Please use the links below to navigate to different sections of this guide.

1. Planning

Are you ready to turn your business idea into a reality, but feeling overwhelmed by the idea of developing a business plan? Don't worry - we've got you covered.

Drawing on our extensive experience working with allied health businesses across Australia, we have developed a comprehensive business plan solution to guide you through the process.

And the good news is, the numbers are on your side. With over 200,000 registered allied health professionals in Australia generating more than $13.4 billion in annual revenue, and a forecasted annual growth rate of 2.3% for the next five years, the market is ripe for success.

Factors like the aging population, increasing reports of chronic disease, and higher rates of private health insurance uptake all indicate a strong demand for allied health services.

We believe your business has the potential to thrive, and our business plan solution for allied health businesses will help you get started on the right foot. So why wait? Download the plan today and take the first step towards realising your business goals.

PS: Read until end to get access to our free full and lean business plan templates

PS: Please also see our articles on business plans

2. Cashflow

When starting a business from scratch, one of the most important considerations for success is ensuring adequate cash flow in the first year. To achieve this, it is essential to conduct a thorough analysis of costs associated with setting up your business.

Our Start-up Expenses Worksheet provides an overview of typical expenses involved in starting an allied health business. Use this worksheet along with our comprehensive guide to estimate your start-up costs.

Next, use our 12-month cash flow projection worksheet to determine your cash position and assess if you have sufficient income to cover projected expenses and start-up costs. This can be challenging as there are numerous uncertainties at this stage. However, we have included a detailed guide outlining key items to consider. This worksheet is a crucial tool for forecasting and managing your working capital needs, and upon completion, you will know how much money is required to fund your practice.

Our Break-Even Analysis worksheet can be used to determine a realistic price structure for your practice. Our detailed guide provides instructions on how to complete the worksheet and interpret the information in a way that is relevant to your practice.

Creating a financial forecast for your business can be challenging, especially if you lack prior business experience. With our extensive experience in the allied health industry, we have gained valuable insights into the financial aspects of running a successful practice. Leveraging this knowledge, we have developed a comprehensive financial forecast template that you can customise to fit your unique business idea, plan, and situation.

PS: Read until end to get access to mentioned tools

3. Business Structure

The business structure you choose will have a significant impact on various aspects of your business, including the safety of your personal assets, tax treatment, wealth creation, ease of extraction, continuity of the business after a change in ownership, and registration requirements.

The following are the most common business structures:

• Sole trader: a structure in which your business has no separate legal identity from you as the owner. You can use either your own name or a business name, and you will be responsible for the business's liabilities. This structure is inexpensive to set up and is suitable for businesses anticipating profits of less than $90,000 in the first year from a tax minimisation perspective(as of 2023 FY, not taking into account any HECS debt or other obligations). This structure offers no asset protection.

• Partnership: starting a business with one or more partners, where all partners share profits, risks, and losses as agreed upon in a partnership contract. The partnership agreement is crucial, so it is recommended to consult with professionals before signing any contracts.

• Company (Pty Ltd): a proprietary limited company is a common business structure used by small businesses. Unlike sole traders and partnerships, it has more regulatory requirements and is a legal entity separate from its shareholders/owners. It offers personal asset protection and a company tax rate of 25%.

• Trading Trust: an entity that holds property or income. The trust appoints a trustee (a person or company) to manage it. The trustee is responsible for distributing income to the beneficiaries of the trust, which is subject to income tax and provisional tax. Trust must distribute all profit at the end of the year to beneficiaries. If paired with corporate trustee, it offers personal asset protection.

To determine the most suitable business structure for your circumstance, consider the following questions:

• Is this a solo project, or will others be involved now or in the future?

• What is the projected turnover?

• Will you have employees?

• Do you want full control of the business?

• How would you like to manage your personal liability?

• Do you want to be taxed on the income from your business as part of your personal income, or as a separate legal entity that files its own tax return?

• Do you plan to seek additional investors for the business in the future?

• Is there a possibility that you will want to sell the business in the future?

It is important to note that your business is not locked into any one structure, and it is possible to restructure it as it grows and changes over time. As your business evolves, seek professional advice to ensure that you have the most appropriate structure in place.

4. Branding

When choosing a name for your practice, it's important to select a name that is easy to remember, spell, and pronounce. The name you choose will depend on the structure of your business.

If your practice is set up as a company or trading trust, you'll need to search the Australian Securities and Investment Commission's National Names Index to ensure that your chosen name is not already registered in Australia. If you plan to use a trading name that is different from your company name, you'll also need to register it separately.

You should also conduct a search at IP Australia's Australian Trade Mark Online Search System to ensure that your chosen name does not infringe on any registered or pending trademarks.

If your practice is set up as a sole trader, partnership, or trading trust, you'll need to select a unique business name and search the National Names Index to ensure that it's not already registered.

Keep in mind that if you plan to operate your business using your natural or corporate name, you are not required to register a business name.

PS: see some of our content on marketing and branding

5. Compliance

Starting your own business requires you to meet certain regulatory requirements, but these are not as extensive as you might think. Many requirements are related to proper registration, with others depending on your chosen business structure. There are specific requirements for certain allied health businesses, and you can use the following checklist as a basic guide:

1. Register your company with the Australian Securities and Investments Commissions (ASIC) to obtain an Australian Company Number (ACN) for a fee.

2. Register your business or trading name with the new National Business Names Register managed by ASIC. Trading under your name or your business partner's name does not require registration.

3. Register your business name as a trademark for legal ownership rights to your name throughout Australia.

4. Register a domain name, which you can use to develop a website before or after starting your practice.

5. Apply for an Australian Business Number (ABN) and a Tax File Number (TFN) to report business dealings annually. Sole traders need an ABN and can use their personal TFN. Companies, partnerships, and trusts need their TFN.

6. Register for goods and services tax (GST) if your annual turnover exceeds $75,000 or if providing GST free services, and register for PAYG withholding if you have employees.

7. Register with relevant industry and the Australian Health Practitioner Regulation Agency (AHPRA) by fulfilling prescribed qualifications and paying an initial and ongoing annual registration fee.

8. Ensure you have adequate insurance to cover your practice including but not limited to: Professional Indemnity insurance, Fire & Perils Insurance, Public Liability Insurance, Workcover etc.

9. Apply for an initial Medicare provider number from Medicare, allowing patients access to rebates when being treated under certain programs.

This checklist is a guide only there may be additional requirements depending on your business. Please seek further professional advice.

6. Accounting

As a business owner, you are legally obligated to maintain records of all business transactions for a minimum of five years. Keeping well-organised business records can be beneficial in many ways, such as:

1. Streamlining the process of completing activity statements, annual income tax, and fringe benefits tax returns.

2. Monitoring the financial health of your business and making informed decisions, such as keeping track of outstanding debts and credit.

3. Managing your cash flow effectively, ensuring that you can make payments when they are due.

4. Providing a clear picture of your financial position to banks, lenders, and potential buyers of your business.

5. Reducing accounting expenses by presenting well-prepared records instead of a disorganised pile of paperwork.

A cloud accounting solution such as Xero and its affiliated apps can take out all the hard work when it comes to: - Storing bills and receipts - Paying contractors and employees - Reconciling bank feeds - Creating and producing valuable reporting to help assist in business operations - Plus much more!

We recommend Xero to all of our clients and are experts in the field.

Please reach out to us for further information or if you are thinking about starting up an allied health business. We would love to have a chat and see if we can turn your dream business into reality!

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To access the templates and checklists listed in this article please register your email above and we will send you out a pack including:

1. Full business plan template

2. Lean business plan template

3. Cash flow projection tool

4. Plus copies of our other suite of tools including

a. P/L tools

b. Break even calculators

c. Charge out rate calculator

d. Monthly cash flow tool

e. And more!