Practice Management by the Numbers (7 of 7)

You can’t manage what you can’t measure, this has been one of our key messages ever since we launched Business Health in 2000. And while a lot has happened since then, this message hasn’t changed – it simply makes good business sense in our view to know your key metrics, track them over time and to know how you compare in the marketplace.

So, in an effort to contribute we thought we’d share with you our latest analysis of the key financial data provided by 300+ Australian practices – in a series of communications over the next couple of months. Hopefully, these will help you to paint a picture of your business – pretty or not. And, armed with this knowledge, we hope you’ll gain some insight and a few pointers towards a stronger, more sustainable practice. (<<Click here to receive a consolidated pdf copy of all communications – to be issued in December>>)

The following are marketplace averages. Factors such as the practice’s business model, development phase, size and location will impact your practice’s numbers.


Practice Management by the Numbers 7: Rent as a % of revenue

Marketplace average: 6.2%

Rent is a significant expense for most practices and, even though Australians have returned (most anyway) to the office, we’re sure that many business owners will be reviewing their performance during Covid 2020 and thinking very hard about their need for office space going forward. Is it all really necessary? Many staff have indicated that they would like to continue working at least some of the time from home, while many clients have willingly accepted virtual meetings.

If your % is higher
Perhaps now, as we emerge from working-from-home, it’s time to consider; am I happy to revert to the office set-up/arrangements which existed prior to lock down and social distancing, or should I take this moment to revisit?

  • Can I function effectively with less office space? Perhaps the meeting room can be replaced by virtual meetings (and a strong internet connection).
  • Would my staff be happy (and as productive) to continue working from home in some capacity?
  • Is my landlord prepared to renegotiate the various aspects of my lease agreement? Not just the terms but also fit-out for example?
  • Could I possibly sublet any surplus space?
  • Would a reduced physical presence still ‘appeal’ to my clients and referral partners?
  • How does a revised office set-up sit with my longer term plans for the business?

If your % is lower
A reassuring position to be in but it’s no reason not to further review this level of expenditure. As someone famous once observed; never waste a good crisis.

The bottom line
It is ‘best practice101’ to regularly review major expense items such as rent, to satisfy yourself that you’re achieving an acceptable ROI on your outlay and that your premises are ‘fit for purpose’, not just for the immediate but also for your longer term plans.

If you’d like to discuss in a little more detail and discover how your own business stacks up (and what you can perhaps do as a result), let us know <<click here>>.

Yours in best practice,

The team at Business Health.

Please note: ‘revenue’ includes licensee fee, excludes all grandfathered and/or volume related payments.


Head office:
Suite 77, Jones Bay Wharf
26-32 Pirrama Road
PH +61 2 9518 6966
FX +61 2 9660 8416

ABN 32 095 039 277