Valuation Isn’t Just About Numbers—It’s About Story
When most practice owners think about “valuation,” they immediately jump to spreadsheets, revenue multiples, and EBITDA calculations. That’s important—but it’s not the whole picture. In reality, investors (and patients, staff, and even your future self) invest in a story. They want to see a narrative of growth, mission clarity, and strategic vision.
The truth is, whether you’re actively seeking investment or not, your practice always has an investor: you. You’ve poured time, sweat, and capital into your business, and the return you get—financial and personal—depends on the story you craft and live by.
Let’s break down how to build that story in a way that maximizes value and sets you on a path toward lasting success.
Crafting Your Practice’s “Investor Story”—Even If You’re Not Pitching
Every investor wants to know one thing: Why should I believe in this business?
That belief isn’t built on numbers alone. It’s built on the narrative that surrounds those numbers:
Mission clarity: What problem are you solving? For a physical therapy practice, it’s not “we treat patients.” It’s, “We help people regain the freedom to live their lives without pain.” That’s the emotional driver.
Growth trajectory: Where are you headed? Investors want to see that you’re not just surviving but building momentum. A practice that can show year-over-year growth in visits, new patient evaluations, or completed plans of care has a story that commands attention.
Strategic vision: How do you plan to get there? Investors respect a roadmap. Even if the financials look good now, they want confidence you’re steering the ship toward greater horizons.
Take Bear Lake Physical Therapy as an example. Their business plan doesn’t just talk about weekly visit numbers—it talks about consolidating underperforming sites, hiring strategically to reduce owner burnout, and aligning with long-term succession planning. That’s a story that goes beyond numbers.
And here’s the kicker: even if you’re not sitting across from a private equity firm, your story matters. Patients invest in it when they choose your practice over the competitor down the street. Staff invest in it when they decide to stay and grow with you. Referral sources invest in it when they send patients your way.
Your investor story is your north star—and without it, the numbers eventually flatten out.
Setting 1-, 3-, and 5-Year Targets With KPIs to Match
A story without milestones is just wishful thinking. The most powerful investor narratives tie directly into measurable progress. That’s why I emphasize building 1-, 3-, and 5-year targets with corresponding KPIs.
Here’s how that might look for a practice:
Year 1 Targets:
Grow visits at primary locations from 50/week to 65/week.
Implement phone scripting to reduce cancellations.
Owner takes at least 2 full weeks off without disruption to operations.
KPI focus: weekly visits per clinician, % arrival rate, net profit margin.
Year 3 Targets:
Hire an additional PT to reduce owner clinical hours by 50%.
Increase net profit margin by 10% through improved reimbursement negotiations and efficiency.
Build a marketing “faucet” system to control new patient flow.
KPI focus: EBITDA margin, referral diversification, % of completed plans of care.
Year 5 Targets:
Fully implement succession plan with business less reliant on the owner.
Reach $300K+ annual post-tax profit.
Increase practice valuation by positioning as “best in class.”
KPI focus: practice multiple (valuation), staff retention rate, patient satisfaction (NPS).
The practice debug checklist we use reinforces this exact thinking. You start with production stats (like charge per visit and % prescribed treatment), monitor collections (calls, claims, OTC), and then push into new patient generation. It’s a sequence that aligns operations with strategy.
Think of it this way: numbers without context tell you where you are; numbers within a story tell you where you’re going.
Why Storytelling in Data Improves Decision-Making and Team Alignment
Too often, practice owners fall into one of two traps:
They look only at the numbers—revenue, visits, collections—but lose the bigger picture of why those numbers matter.
They tell only the story—“we want to help people!”—but don’t connect it to objective measures.
The sweet spot is where data and story meet. That’s where teams align and decisions become obvious.
For example: imagine your cancellation rate jumps. You can tell your team, “We’re losing $2,000 a month from cancellations.” That’s a number, but it doesn’t move hearts. Now pair it with the story: “Every cancellation means a patient’s recovery slows, and they may never finish their plan of care. We’re here to change lives—let’s protect that.” Suddenly, your front desk has a reason to stick to the script, and your clinicians understand why rescheduling matters.
Storytelling in data transforms raw stats into purpose-driven action. It reinforces the mission, creates buy-in, and ensures that every staff member feels like they’re contributing to something bigger than themselves.
This is also why we encourage practices to survey patients and capture success stories. A stat like “85% plan-of-care completion” is powerful. But when paired with a patient story—“Before PT, I couldn’t play with my grandkids; now I’m back on the floor with them every weekend”—that stat becomes a rallying cry.
And the same applies when positioning for an exit. Private equity doesn’t just want clean books; they want confidence your story is sustainable. That comes from a combination of hard KPIs and a narrative that shows how those KPIs tie to mission, growth, and future opportunity.
The Investor Mindset: Why This Matters Even If You Never Sell
Here’s the reality: most private practice owners don’t wake up thinking about multiples and exit planning. They think about making payroll, serving patients, and carving out a vacation week.
But here’s the insight I’ve learned through 20+ years, from running my own practice to helping Alliance PT Partners grow to 100 clinics: when you operate as if investors are watching, you automatically build a better practice.
Why? Because investors don’t pay for chaos. They pay for systems, clarity, and scalability. And those same qualities that make your practice more attractive to investors also make it more enjoyable to own.
A clear investor story makes your staff proud to work there.
1-, 3-, and 5-year KPI-driven targets give you confidence and direction.
Storytelling in data keeps everyone aligned on why their work matters.
And when the day comes that you do decide to sell—or hand off to the next generation—you won’t just have a collection of financial statements. You’ll have a business that commands attention, respect, and maximum valuation.
Closing Thought
Valuation isn’t just about what’s on the balance sheet. It’s about the story behind the numbers—the why, the where-to, and the how-we-get-there.
As a practice owner, you’re not just building a business. You’re building a narrative that patients, staff, and even investors can believe in. Craft that narrative, align it with the right KPIs, and tell the story through your data. Do this consistently, and you won’t just increase your valuation—you’ll create a practice you’re proud to own every single day.
