Servicing one particular type of client can be good for business, but make sure you know your market and have the right people to back you up, suggests one Ontario advisor.
If you build it, they will come. But it will take a team of people to get you there, says one financial advisor.
About seven years ago, Mike Lakhani from Tax Matters for Dentists (TMFD) of Mississauga, Ont. decided to pick and choose his clientele. So much so that he and his team now only service dentists, offering a wide-range of services including retirement planning, investment strategy, risk assessment, tax planning, accounting and bookkeeping, among others.
Lakhani saw a common need – complicated tax planning – in a few of his clients, all of whom were dentists. “Ontario dentists were only allowed to incorporate about nine years ago, whereas the other provinces had been doing that for a long time,” he explains. “That opened up a whole lot of opportunity for dentists to restructure their businesses, incorporate (their practices), have family members as shareholders etc.”
So, Lakhani jumped on the bandwagon and helped them make the transition. He met with the four or five dentists that made up his book (there’s more than 300 on the roster now) and explained how he could save them thousands of dollars in taxes.
“I remember meeting when this was first allowed to be done,” he says. “I could sit with a dentist and I could say at the end of the half hour, ‘I’m going to save you $80,000 in taxes,’ and that was true. We did it every time.”
But his niche business didn’t happen overnight and it certainly wasn’t a solo project. (continued.)
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“It’s taken a long time,” he says. “It’s a team effort, not a one-man show. When you have a niche market it takes all kinds of people to help you get there.”
Not only this, but each group comes with its own set of unique problems. Dentists, for example, have every issue of a small business including recruiting and retaining quality staff, standing out from the intense competition (there's a dentist in every mall and on every street corner, as Lakhani points out), not to mention the typical accounting and financing issues.
“They (dentists) need help way more than anybody else does,” he says. “A good dentist is generally not a good manager.”
As for that high suicide rate rumour…?
“In my experience, it’s absurd and not true,” he says. “I don’t know where it comes from.”
If you want to specialize in a niche market, Lakhani recommends taking a good look at your current book to establish if a bulk of your clients are working in a specific industry. If so, make sure you like the industry and the clients, and then find out everything you can on how to serve them holistically. “Become an expert (in that area) because there is a lot more going on if you go after specific markets,” Lakhani says.
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