For doctors in South Africa, years of study and clinical training are focused on one thing: caring for patients. For many, that remains the driving force behind establishing a private practice – creating an environment where they can deliver the care they believe in while building something of their own. But running a practice also brings a set of business decisions that sit alongside the clinical ones, from managing cash flow and staffing to deciding when and how to invest in growth.
South Africa’s ongoing healthcare needs to create space for doctors to establish and grow practices that meet patients’ needs. In an October 2025 briefing to Parliament, the Minister of Health estimated combined public and private healthcare expenditure at roughly R570 billion annually, equivalent to about 8.5% of GDP. This scale of spending points not only to the importance of healthcare to the South African economy, but also to the significant commercial opportunity within the sector – and the opportunity for doctors to grow practices that respond to the needs of the communities they serve.
“Doctors enter this profession because they care about people and want to make a difference to their patients’ lives. When they establish a practice, they are taking on the additional responsibility of running a business alongside delivering that care,” says Jodi Hunter, Head of Sales and Direct Growth at Merchant Capital. “Understanding the commercial side of a practice can help doctors make informed decisions about when to invest, how to manage cash flow and how to support the growth they want to achieve.”
Understanding the business opportunity
When a doctor considers expanding their practice, the decision goes beyond whether there is demand for another consulting room or a new service. They also need to understand what the investment will cost, how quickly it will generate additional income, and whether the current practice can carry the expense while that growth takes place.
A practice can be busy and still have very little room to spend. Once salaries, rent, suppliers, and other running costs are covered, the owner needs to know what is genuinely left before taking on another commitment. That difference often determines whether an investment strengthens the practice or pressures cash flow.
Planning how to fund growth
For an established practice, growth may mean adding another consulting room, opening a second location, bringing in additional practitioners, or investing in equipment that allows more care to be delivered on site. These investments require capital upfront, often well before they begin generating a return.
Doctors frequently fund growth from personal savings or cash held in the practice, but this can tie up working capital needed for day-to-day operations. Alternatively, saving enough cash to fund an investment can delay growth and mean opportunities are missed. External funding can provide another option, but the funding decision should start with the investment itself: what is being funded, what return is expected, and over what period will the return be realised.
“The funding decision should come after the investment has been clearly defined, rather than starting with a funding solution and trying to fit the investment around it,” says Hunter. “The cost of the investment, expected return and timeline should inform the funding structure. For example, if an investment is expected to generate a return within 12 months, it may not make commercial sense to structure the funding over five years. The term and repayment profile should align with how the investment is expected to generate cash, while still leaving the practice with sufficient working capital to operate.”
Matching funding to the practice’s income
Medical practices also have a unique cash-flow dynamic. In many practices, the doctor is the key revenue generator, meaning income can be closely linked to the number of patients seen and the claims generated. At the same time, payments from medical aids may only arrive after the service has been delivered, while salaries, rent and suppliers still need to be paid.
This makes the timing and flexibility of repayments particularly important. Rather than treating funding as a fixed monthly cost, doctors should consider whether the repayment profile reflects how their practice actually earns its income.
“Medical practices are not always consistent month to month. A doctor may have a strong trading period followed by a quieter one, or take time away from the practice without generating the same level of income,” says Hunter. “The funding structure should recognise that reality. Where repayments can be aligned more closely to the practice’s trading performance, the doctor has greater flexibility to manage the investment alongside the normal demands of running the practice.”
This is particularly relevant when investing in growth. A new consulting room, additional practitioner or service may take time to build demand, so the practice needs to be able to absorb the investment while maintaining its existing operations.
Doctors already understand their patients and their practices better than anyone. The opportunity is to apply the same discipline they bring to clinical decisions to the commercial decisions that support the next stage of their practice.
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