The feasibility of running a physiotherapy facility in Malta

Abstract

Objective: Physiotherapy is a health care service gaining popularity in an era of increasing levels of health consciousness. it helps to keep people active in their day to day life, in the work force following injury, and assists in the maintenance of a healthy lifestyle. Locally, physiotherapy is provided by both the public and the private sector. The study aimed to examine whether there are financial grounds for constructing and running a private physiotherapy facility in the South of Malta. Methodology: the study commences with an analysis of the macro and micro environment of the physiotherapy health services, and an analysis of the questionnaire results. The study then proceeds to estimate the capital expenditure required, together with the operating revenue and expenditure expected for the first ten years of operation. The financial projections were then prepared, comprising of the Income Statement, Tax Computation and Cash Flow Projections. A financial appraisal was then carried out using both traditional and discounted investment appraisal techniques, followed by a sensitivity analysis. Results: from a marketing point of view, the market was found to have potential which was complemented with positive financial projections. However, the results of investment appraisal and the sensitivity analysis were negative. Conclusion: Based on the projections presented through this dissertation, the project is deemed to be uneconomical due to the hefty capital requirements and poor cash flows.