GP practice sale readiness: frequently asked questions
A GP practice is sale-ready when it can produce lodged tax returns for at least two years, a normalised EBITDA statement with documented add-backs, current signed GP agreements with novation clauses, evidence of payroll tax compliance, a lease with adequate remaining term, and documented KPI trends. Most practices that fail in sale processes fail because of documentation gaps, not viability.
How do I know if my GP practice is ready to sell?
A practice is sale-ready when it can produce on request: at least two years of lodged tax returns, a normalised EBITDA statement with documented add-backs, current signed facilities and services agreements for every GP, evidence of compliance with payroll tax obligations, a lease with at least three to five years remaining and clear assignment rights, and documented KPI trends across billings, staff costs and EBITDA. The Medius Global sale readiness diagnostic assesses all five domains against buyer expectations.
What documents does a buyer require during due diligence?
Buyers typically require: three years of lodged tax returns and BAS statements; a normalised EBITDA statement with supporting workpapers; current signed GP service agreements with novation or assignment clauses; lease documents with remaining term and options confirmed; AHPRA registration certificates for all practising GPs; WHS policies and training records; payroll tax compliance documentation; and PSR audit history and resolution status if applicable. Missing documents delay due diligence and signal gaps that buyers reprice.
How long does it take to prepare a GP practice for sale?
Preparation takes 12 to 24 months for a practice with identified gaps. Financial documentation and compliance remediation can often be completed in three to six months. Workforce stabilisation (filling unfilled sessions, replacing departing GPs, building registrar pipelines) typically takes six to 12 months in metropolitan areas and longer in regional locations. Owners who begin preparation with less than 12 months before their target sale date accept more transaction risk and reduced negotiating strength.
What is a sale readiness diagnostic and what does it cover?
A sale readiness diagnostic assesses a practice across five domains: financial documentation completeness, compliance and regulatory status, operational KPI visibility, infrastructure and systems capability, and succession planning clarity. The output is a graded assessment identifying gaps by domain and recommending a remediation sequence. It is available as a free online tool taking 15 to 20 minutes, or as a facilitated diagnostic with practice review for more complex situations.
What is the most common reason GP practice sales fall through?
Most GP practice sales do not fail because the business is unviable. They fail because the owner cannot produce the right information at the right time. Missing financial records, expired GP agreements, unresolved payroll tax exposure and short lease terms are the most frequent causes of buyer withdrawal or price renegotiation during due diligence. These gaps are addressable with preparation but become very difficult to resolve once an active sale process has begun.
Further reading: GP sale readiness checklist: what you will need to complete the assessment
How do I find out what my practice’s EBITDA trend looks like?
Ask your accountant to prepare a profit and loss comparison across the past two to three financial years, with owner-specific costs and one-off items removed from each year. A rising trend signals cost control and sustained demand. Flat or declining figures prompt questions buyers will ask: revenue leakage, cost growth, workforce instability, or dependence on the principal GP’s billings. Owners who cannot describe their EBITDA trend present a significant readiness gap in any buyer conversation.
Further reading: Financial benchmarks buyers use to assess GP practices
What KPIs do buyers benchmark my practice against?
Buyers benchmark: GP retention rate (the practice’s share of total billings after GP payments), staff wages as a percentage of total billings, total annual billings by scale, normalised EBITDA margin, CCM billing percentage relative to eligible patient base, DNA rates, and tax return lodgement currency. The Prosperity Health benchmark survey reported average staff wages of 19.7% of total billings, with top-performing practices at approximately 14%.
Further reading: Financial benchmarks buyers use to assess GP practices
What is a data room and what should mine contain?
A data room is a structured repository of documents made available to the buyer and their advisers during due diligence. It should contain: three years of lodged tax returns, BAS statements and profit and loss reports; the normalised EBITDA statement with supporting workpapers; all current GP service agreements; lease documents; AHPRA registration certificates; WHS policy records; PSR correspondence if applicable; and material contracts with pathology, allied health or other subtenants.
How does my practice’s accreditation status affect the sale?
Current RACGP or AGPAL accreditation demonstrates that the practice meets recognised quality standards and is eligible for Practice Incentives Program payments, including PIP QI. Buyers treat an accreditation gap or an impending reaccreditation cycle as a management risk and a potential disruption to PIP income. Practices with current accreditation in good standing present lower compliance risk and reduce due diligence complexity. Buyers will ask for the accreditation certificate and expiry date.
What is the difference between a sale readiness assessment and a financial readiness diagnostic?
The sale readiness assessment covers all five domains: financial, compliance, operational, infrastructure and succession. It produces a graded overview with gap identification and remediation priorities. The financial readiness diagnostic goes deeper into the financial domain only: tax lodgement status, EBITDA normalisation clarity, compliance and documentation gaps affecting valuation, and key financial ratio benchmarking against sector norms. It requires three years of P&L statements, recent BAS statements and current lease documents as inputs.