Adding a new service to your practice without careful planning can lead to costly mistakes for your business. You must ensure that any addition to your range of services is compatible with your team’s expertise and your clients’ needs, and that it is economically viable.

Whether you are considering adding estate planning, tax planning, insurance advice or another type of work to your existing range of services, you will need to do some research.

Knowing of 10 other advisors who have added a particular service to their practices is not reason enough for you to do so, says Joanne Ferguson, president, coach and consultant with Advisor Pathways Inc. in Toronto. Instead, you need to think carefully about how that added service would fit into your current business model.

Ferguson offers these five tips to help you ensure adding a new area of work is the right decision:

1. Ask yourself “why?”
Consider your reasons for adding a new service, Ferguson says, and how it will fit with your current business model. How will the new function relate to your area of expertise?

As well, consider the level of importance the new service will take on in your business. For example, if you are adding succession planning for business owners, will it be treated as a secondary “menu item” or will it be an integral part of your core client service?

2. Do your homework
You should always perform due diligence before making a significant change to your business, Ferguson says.

Your research can be as informal as simply talking to other advisors who offer similar services to find out the opportunities and challenges they have experienced.

3. Talk to your team
Call a meeting to get your team’s opinion on the proposed new service offering.

Let your team know what you are thinking of adding to the business, Ferguson says, and why. Ask team members for input and come to a consensus as to whether the group believes it will be a viable addition to your practice.

Team members can provide you with important insights, Ferguson says, such as whether clients have been asking about a particular service.

4. Ask your clients
Find out whether your clients would be interested in a particular service.

If you have a client advisory board, Ferguson says, raise the topic at your next CAB meeting. Or you could conduct a client survey to find out whether your clients are looking for any additional services that you don’t offer.

5. Promote your new service
Once you have adopted a new service, tell the world.

Part of your plan to add the service should include a communication strategy, Ferguson says, to re-introduce your business to clients. For example, send a letter to your clients. Mention the new service on your website, on your brochure, in your welcome package and in other marketing materials.

Make sure your added service becomes a regular part of your conversation with prospective clients, Ferguson says. And make your centres of influence aware of your expanded range of services.