Market Update: Insights into the UK Physiotherapy Sector 2024

11 Jan 2024

We recently conducted an analysis of our data relating to the UK private physiotherapy market, which has revealed some interesting statistics. Although derived from a modest sample size, this data offers a valuable insight into the sector.

The average turnover for physiotherapy practices is £326,906, with average pre-tax profit sitting at £86,552. With an average net profit margin of 26%, these figures suggest that physiotherapy services are not only viable but also profitable ventures. A deeper look into the data shows practices with turnover under £250,000 achieved the highest net profit margins at 41%, but this was associated with the owner contributing more of the income. In contrast, those with turnover between £750,000 – £1M achieved a lower net profit margin at 15%, likely as a result of the impact of escalating infrastructure costs at higher turnover levels, but still a healthy margin.

On average, owners spend 23.5 hours per week on day-to-day operations, suggesting a semi-active role in their businesses. Although this can enhance owner earnings in the short term, high owner involvement may potentially impact the saleability and exit value of the business.

In terms of staffing, 42% of practices employ clinical staff, while the remaining 58% continue to operate an associate model more traditional in the sector. This was a surprising find given tighter restrictions around gig economy working and an increasing preference among workers for contract security.

Interestingly, only 16% of practices have contracts with the NHS or corporate entities, indicating significant potential for expansion in these areas. Given the reliability and repeat revenue such contracts bring to a business, opportunities for growth in this area are substantial.

95% of practices have implemented electronic database systems, reflecting a sector-wide commitment to modernisation, and enhanced patient management.

The presence of a practice manager in 89% of the practices underscores the emphasis on effective management and administrative efficiency as key components of a successful practice.

Only 21% of practices operate across multiple clinics, pointing to challenges in scaling and possible underinvestment in the sector. This finding also reinforces the opportunity for consolidation within the sector.

Disappointingly, only 42% of practices offer gym access, a missed opportunity for enhanced rehabilitation services and a more holistic approach to wellness. This shortfall is primarily attributed to the prohibitive costs of rent, rates, and the spiralling expenses involved in fitting out larger facilities.

Overall, the UK physiotherapy market shows good financial health, an increasing embrace of technology, and structured practice management. Nonetheless, there remains scope for growth in employment of clinical staff, access to better facilities, and sector consolidation. These areas represent promising avenues for both existing and new market entrants to innovate and thrive.

*The above insights are based on a sample of 50 practices across the UK that requested a valuation in preparation for exit so may not not be reflective of the whole private physiotherapy market. Turnover and profit data is self reported and have not been adjusted for the owners hours / role in the business.


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