How Much Does It Cost to Start a Medical Practice?
Starting a medical practice is a significant milestone for many healthcare professionals, but it comes with a complex array of financial considerations and strategic decisions. Understanding how much it costs to start a medical practice is crucial for planning and financial stability. From purchasing essential medical equipment to securing a suitable location, the expenses can vary widely. Whether you are contemplating buying an existing practice or establishing a new one from scratch, knowing the expenses behind each move is imperative.
This guide aims to provide a comprehensive overview of the expenses involved in starting a medical practice, highlighting the differences between buying a business-only practice and purchasing a freehold medical practice with real estate. By exploring these options, along with the specific costs associated with small, medium, and large practices in Australia, we aim to answer the question: how much does a medical practice cost?
These tips will equip you with the knowledge needed to make informed decisions and successfully navigate the financial landscape of starting a medical practice.
Buying the Business Only vs. Buying Medical Practice with Real Estate
When considering the acquisition of a medical practice, one of the primary decisions is whether to purchase the business alone or to buy it along with the associated real estate. Each option comes with its unique set of advantages and challenges, impacting initial costs, long-term financial stability, and operational control.
Aspect | Buying the Medical Practice (Business) Only | Buying a Medical Practice with Real Estate (Freehold) |
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Assets Included |
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Lease Agreement |
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Capital Requirements |
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Risk and Responsibility |
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Control and Stability |
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How Much Does it Cost to Buy a Medical Practice in Australia?
The cost of buying a medical practice in Australia varies widely based on several factors, including location, size, and speciality. Whether you are considering a small, medium, or large practice, understanding the financial requirements and associated expenses is crucial. This section will provide an overview of the key factors influencing the cost of purchasing a medical practice in Australia.
Small Medical Practice (Business Only)
Aspect | Details |
---|---|
How much does it cost to buy a medical practice (small)? | Typically ranges from AUD 100,000 to AUD 500,000 |
Number of Practitioners | 1-3 |
Types of Medicine | General practice or specialized |
Equipment | Basic medical equipment, examination rooms, office supplies |
Patient Base | Smaller patient list, often in a localized area |
Revenue | Lower annual revenue, reflective of a smaller operation |
Medium Medical Practice (Business Only)
Aspect | Details |
---|---|
How much does it cost to buy a medical practice (medium)? | Typically ranges from AUD 500,000 to AUD 1,500,000 |
Number of Practitioners | 4-10 |
Types of Medicine | General practice or specialized |
Equipment | More advanced medical equipment, multiple examination rooms |
Patient Base | Moderate patient list with a broader reach |
Revenue | Higher annual revenue, indicating a well-established practice |
Large Medical Practice (Business Only)
Aspect | Details |
---|---|
How much does a medical practice cost (large)? | Typically exceeds AUD 1,500,000 |
Number of Practitioners | 10+ |
Types of Medicine | Multi-specialty practice |
Equipment | State-of-the-art equipment, multiple operatories, advanced diagnostic tools, and possibly an in-house lab |
Patient Base | Large and diverse patient list, possibly with multiple locations |
Revenue | High annual revenue, reflecting a large and thriving practice |

How Much Does a Medical Practice Cost with Real Estate (Freehold)?
Small Medical Practice with Real Estate
Aspect | Details |
---|---|
Price Range | Typically ranges from AUD 500,000 to AUD 1,000,000 |
Real Estate Value | Cost of the property, which can vary significantly based on location, size, and condition of the building |
Number of Practitioners | 1-3 |
Location | Urban vs. rural areas, with urban locations typically commanding higher prices |
Types of Medicine | General practice or specialized |
Equipment | Basic medical equipment, examination rooms, office supplies |
Patient Base | Smaller patient list, often in a localized area |
Revenue | Lower annual revenue, reflective of a smaller operation |
Medium Medical Practice with Real Estate
Aspect | Details |
---|---|
Price Range | Typically ranges from AUD 1,000,000 to AUD 2,000,000 |
Real Estate Value | Larger or more strategically located properties will increase the price |
Number of Practitioners | 4-10 |
Building Condition | Newly renovated or modern buildings may cost more |
Types of Medicine | General practice or specialized |
Equipment | More advanced medical equipment, multiple examination rooms |
Patient Base | Moderate patient list with a broader reach |
Revenue | Higher annual revenue, indicating a well-established practice |
Large Medical Practice with Real Estate
Aspect | Details |
---|---|
Price Range | Typically exceeds AUD 2,000,000 |
Real Estate Value | Large commercial properties, potentially with multiple floors or additional facilities |
Number of Practitioners | 10+ |
Prime Locations | High-demand areas, such as city centres or affluent suburbs, which significantly increase the value |
Types of Medicine | Multi-specialty practice |
Equipment | State-of-the-art equipment, multiple operatories, advanced diagnostic tools, and possibly an in-house lab |
Patient Base | Large and diverse patient list, possibly with multiple locations |
Revenue | High annual revenue, reflecting a large and thriving practice |
Additional Financial Considerations
Legal Fees:
- Costs associated with legal advice and contract reviews during the purchase process.
- Due diligence expenses to ensure compliance and avoid potential liabilities.
Transition Costs:
- Expenses related to integrating new systems, rebranding, and marketing efforts.
- Training for new staff or transitioning existing staff to new management.
Technology Upgrades:
- Investment in electronic health records (EHR) systems and other medical software.
- Ensuring cybersecurity measures are in place to protect patient data.
Insurance:
- Comprehensive insurance coverage, including malpractice, property, and business interruption insurance.
- Potential increases in premiums based on practice size and location.
Professional Fees:
- Accounting and financial advisory services to assist with budgeting and financial planning.
- Consultancy fees for practice management and operational efficiency improvements.
Licensing and Accreditation:
- Costs associated with obtaining necessary licenses and accreditations.
- Regular renewal fees and compliance costs.
Community and Market Research:
- Understanding the local healthcare market and patient demographics.
- Assessing competition and identifying opportunities for service differentiation.

Find the Right Medical Practice with Palladium Business Broking
With a deep commitment to client success, Palladium offers personalized services tailored to meet your unique needs. From seamless transaction management to strategic planning, we ensure a smooth and successful acquisition process. Trust Palladium Business Broking as your partner in achieving your professional goals.
Browse through our medical practices for sale in Melbourne and Victoria.
Contact us today for more details
View our other guides for more helpful tips:
- Buying an Existing Medical Practice Vs Starting Your Own Medical Clinic
- How to Sell Your Medical Practice
- How to Increase Your Dental or Medical Practice Selling Price
Written by
Dr Philip Baker
As a former healthcare professional of 28 years, Dr Philip Baker is now a registered Sales Agents Representative and Business broker. Philip has been involved in numerous sales and purchases of large successful dental clinics. Philip is a Licensed Agents Representative and a member of the REIV and is also a member of the Australian Dental Association (35 years), Australian Institute of Business Brokers. Phil’s extensive experience and knowledge, along with his professional manner will help his clients achieve their ultimate aims and help achieve successful sales and purchases for their health care businesses.

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