Jake Johnson talks about Keys to a Successful Funeral Operation
September 29, 2008
Recently Jake Johnson, together with Scott Meierhoffer of St. Joseph, MO, was on a conference call with Robin Heppell.
The three of them were talking about how to be successful in the changing and this somewhat difficult time for funeral service. We have two excerpts from the interview. Robin asks Jake to elaborate on the keys of a successful funeral operation and then asks Jake to sum up his thoughts of the conversation.
Jake’s Keys to a Successful Funeral Home Operation
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Jake’s Parting Thoughts
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For more information about our Management Services, see the article: Funeral Home Management Services
Stay tuned for more excerpts from the interview – we will let you know as soon as we have them uploaded.
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Current Economy and its effect on Funeral Service – Tom Johnson
September 29, 2008
We are often asked by our clients, what it is the best strategy to employ in an economic downturn and how has this downturn affected my funeral home’s value? These are tough questions to answer but funeral directors can take some comfort in the fact that funeral service in general is one of the more “recession proof” businesses in the United States. There are many of our constituents in other fields that don’t have it so good right now. Home builders, commercial construction, real estate, trucking, automobile dealerships and restaurants to name a few are in particular feeling the hard times.
Funeral service marches on as families continue to need our services. The best way to handle the downturn is to work harder and smarter than you have in the past. Go the extra mile with families. While your competitor may be crying the blues it can separate you from the pack. Especially from an image standpoint and will pay dividends in years to come.
It is also amazing to me that many funeral homes really do not have an accounting system. They tend to just gather information and send it to their accountant so they can get year end taxes completed. There is no more important time to get your financials affairs in order than now. No matter who you use, get a professional accountant to assist you in not only handling your accounting but also doing some financial planning and budgeting. It is one of the hallmarks of our company now as our accounting division has grown rapidly during the past year.
There may be some families that opt for cremation because of the economy but I do not believe that is wide spread. If this happens it is probably the families that were sitting on the fence with this decision and economics push them over the edge. You may also have some families that do not select as much as they might have in good times, but in my 30 years of funeral service and having gone through this a few times, that really wasn’t much of a factor in the funeral homes I owned. Some funeral directors say that they extend terms on their contracts during these times but I really do not think it is a good idea unless absolutely necessary and then secured.
The funeral homes it affects the most are the ones that were struggling before the economy turned. It’s probably pretty tough for them right now. They may make it or may not. Time will tell. However, for the majority of funeral homes in the United States, it’s a good time to look at all of your expenses and maybe get rid of some of the “fat” in your organization that you have been putting off. As we do our “Performance Evaluations” around the country, we often can assist funeral directors in this effort. In nine times out of ten, the savings or enhancements that are created more than cover our costs. My caution is that the savings should not be in areas that are service connected as I firmly believe it’s time to give the best service you can.
There is a scene in the movie the Godfather that I think back to during situations like this. It was when the gang families were about to go to war to take over each others turf. Michael Corleone asked Clemenza (one of his father’s soldiers) “What happens during a time like this.” Clemenza retorted by saying “These things happen from time to time, don’t worry about it. Things will eventually get back to normal.” It’s true with our business. Things will get back to normal. The question is when?
With regard to the economy’s effect on the value of funeral homes, let me say this; The major way the economy has the affected the value of funeral homes is that the tightening of credit has had a limiting effect on the number of buyers. In our profession, where prices are primarily market driven, this will have an effect on value. The more “willing and able buyers” there are, normally the higher the price. However, this negative is mostly felt by smaller to mid size operators. Premium firms will always command a good price as long as it fits the demographics of the major buyers.
Finally, the best way to maintain or build the value of your funeral home is to continue to offer great service in your community while maintaining your property and grounds in excellent condition. Make sure you are following up with your families. If your call volume and revenues are maintaining or increasing you will be maintaining the value of your firm in the long run.
Hopefully, those who read this article noticed the number of times I referred to the word “service.” It is not an accident. As I have owned or operated over 300 funeral home or cemeteries in the past, the level of service given to the community is the hallmark of any successful firm I have had the pleasure of being associated with. With our many clients it is the same. Some give great “lip service” to the word, but really are just going through the usual motions. It is the funeral directors who are always looking towards “continuous improvement” in their service level that eventually lead the way.
I hope this has given you some insights and ideas that you can bring to your organization. As we know and sometimes say, It’s not rocket science, It’s doing the little things, paying attention to the details and getting back to the basics.
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Brittni Dye says:
September 28, 2008
(Johnson Consulting Group’s Web-based Accounting System) gives us real-time, accurate accounting specific to the funeral industry. No accountant compares to the innovative reporting JCG can do. Their experienced staff has helped us manage our 7 locations, providing us with up-to-date information we need to make our daily business decisions. Whether its financials, surveys, contract analysis or simply getting advice on issues we face, JCG is always there exceeding our expectations, so we can manage our funeral homes.
Brittni Dye, Legacy Funeral Homes, Anchorage, AK
Anthony Guerra says:
September 27, 2008
If (this family) had called our P.M. receptionist this time last year, no way we would have said the right things like this. The JCG / Van Beck training has showed an immediate impact on the way we respond to our families (RACM). Thanks again for all you guys do for us.
Anthony Guerra, Guerra & Gutierrez Mortuary, Los Angeles, CA
Lindsay Jones says:
September 27, 2008
Thanks for the great on-site session. I’m very impressed and pleased with quality and comprehensiveness of the Valuation, Performance Analysis and proposed Strategic Plan.
Lindsay Jones, Lawrence A. Jones & Sons, Kansas City, MO.
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