When Growth Becomes a Gamble: Why 63 Percent of NDIS Businesses Are Failing and What We Must Learn

Not long ago, I remember sitting in my car after a long day of back to back client visits, team meetings and late night paperwork. My phone buzzed with another email from the bookkeeper. Cash flow was tight again. It was a familiar feeling, one I never really got used to. Despite a full roster of clients and a team that was growing faster than I could keep up with, we were still on edge financially.

The truth is, the NDIS business model, while full of heart and opportunity, is also one of the most complex, unpredictable and at times financially unforgiving industries you can operate in.

And this week’s headlines prove it.

On May 19th 2025, The Australian released a powerful piece highlighting a deeply concerning trend. A 63 percent surge in insolvencies among NDIS and healthcare providers this financial year alone. That’s 362 businesses that have closed their doors, many of them having once turned over 3 to 5 million dollars annually.

Let that sink in.

These weren’t failing businesses. Many of them were booming, expanding fast, taking on more staff, scaling their services and ticking all the boxes of so called success.

But it wasn’t enough. Or more accurately, it wasn’t sustainable.

There are a few common themes. And if you’ve ever walked this path as an NDIS provider, you’ll know exactly what I mean.

1. Rapid Growth Without Solid Foundations

In the NDIS world, it’s easy to get swept up in rapid growth. The demand is there, the revenue streams can look impressive and it feels like the natural next step is to scale, scale, scale.

But what often gets overlooked in the excitement is what I call the “infrastructure gap.” Systems, leadership, financial planning and internal controls often lag behind the growth. And before long, what looked like success starts to unravel.

I’ve lived this. My business went from just me to a team of 50 in under three years. On paper, it was a dream. Behind the scenes? It was chaos.

2. Cash Flow Crunches and Delayed Payments

It’s one thing to earn the revenue. It’s another to actually see the money hit your account in time to pay staff, cover rent and keep the lights on. The NDIA’s payment processing timelines, combined with high upfront costs, can cause massive cash flow problems, especially for smaller providers or those delivering complex supports.

Even businesses with strong income reports can fall apart when cash flow doesn’t match the payroll cycle.

3. Compliance Overload

The compliance landscape in the NDIS is like quicksand. Always shifting. Keeping up with registration requirements, audits, policy updates and evidence obligations is costly and time consuming. Many well meaning businesses simply don’t have the resources to keep pace.

Without dedicated admin support, a risk management framework and external guidance, these requirements can be the final straw that tips a business into insolvency.

4. Underestimating Leadership and Strategy

Many providers enter this sector with big hearts. They want to help, serve and create impact. But good intentions aren’t enough to run a sustainable business. Leadership skills, financial literacy, team management and strategic planning are critical.

You can’t just wear your heart on your sleeve. You’ve also got to wear a CEO hat, even when it doesn’t fit comfortably.

This trend isn’t just about numbers on a spreadsheet. Every provider that closes represents:

• Disrupted care for participants

• Lost jobs for workers

• Broken trust in the system

And for those of us still standing, it’s a wake up call.

We can no longer afford to build our businesses on emotion and ambition alone. We need structure, strategy and support.

Here’s what I believe we must start doing now.

1. Normalise Business Education for Providers

Every NDIS provider should be taught how to read a profit and loss statement, forecast cash flow, set sustainable rates and plan for growth. These aren’t bonus skills. They’re survival skills.

2. Invest in Operational Infrastructure

Build your systems before you scale. That means:

• Clear onboarding processes

• Automated invoicing and payroll

• HR systems that grow with you

• Compliance checklists embedded into daily routines

3. Lead With Accountability, Not Just Empathy

We need more providers who can lead their teams with clarity and confidence. That means having tough conversations, setting boundaries, holding team members accountable and making decisions that protect the business even when they’re hard.

4. Create Space for Peer Support and Mentorship

The isolation of leadership is real and it’s dangerous. I’m a huge believer in peer mentorship and community support for NDIS business owners. If we can talk openly about what’s not working, we can build stronger businesses together.

Reading that article about the 63 percent increase in provider insolvencies hit hard. Not just because of the statistic, but because I’ve been there. I’ve faced the stress, the sleepless nights and the gut wrenching decisions. I’ve lost what I thought was my life’s work, only to discover that it was the lessons from the loss that became my greatest gift.

To every NDIS provider out there. You are not alone in this. But we must change the way we do business if we want to survive and thrive.

Let’s stop building businesses that only look good on the outside. Let’s build ones that are solid, sustainable and built to last. For the people we support, for our teams and for our own peace of mind.

And here’s something I’ve learned along the way, you don’t have to figure it all out on your own. I used to think asking for help meant I wasn’t capable enough. But looking back, every turning point in my journey came from the guidance of someone who had walked the road before me.

Whether it’s a mentor, a peer, or someone who just “gets it,” having someone in your corner who understands the pressures of NDIS leadership can make all the difference.

So if you’re in that messy middle, or staring down decisions you’re not sure how to make, know this, support is not a weakness, it’s wisdom.

Let’s keep rising together.

With heart,
Vanessa