November 2008 Management Insights Newsletter
November 12, 2008
Welcome back. It’s November, 2008. My day is like many of your days … busy with too much to do. When you receive this newsletter we will have a new President, Congress and Senate. We can only hope our new leaders will bring leadership and the wisdom necessary to lead our great nation back to more prosperous times. Enough on politics …
We have been busy and as a result we have many new and exciting things to share with you.
Thanks to all of our many clients and the support they have given us, we will be moving to a new office building this month. A formal announcement with all the details will be coming your way soon.
For those contemplating our accounting services, we are now offering stand alone traditional monthly accounting service. You may continue to use your existing management software, i.e. TDAW, Mortware, Mims etc. You would capture your expenses with our QuickBooks Enterprise edition. We are also adding a new independent tax service to enhance our accounting services to our clients.
We have listened to clients and the market place and have now responded with even more services as your Total Solutions Company.
This issue we will highlight all of our services to explain what they are – how they work – and most importantly how each service ties to the other to provide a Total Solutions Approach for our clients …
We hope you find this issue informative and helpful in knowing whom we are and what we are all about. As you review our flow chart below, you will see how a Total Solutions Approach makes sense and the value-added we can provide from understanding the entire process is unmatched in the funeral industry.
In closing this message, I want to take this opportunity to wish you and you family the best of the Holiday Season.
Call us or reply to us if you have questions, we look forward to hearing from you.
Accounting Services
Legacy Management and Accounting Services, a Johnson Consulting Group company is one of the few companies offering a complete web-based accounting solution to the funeral professional. Drawing from our own experiences and past processes, we have developed an accounting service and system that allows access to the accounting software to the client. This allows total flexibility to our clients who wish to have reporting capabilities at their fingertips. Along with our service, comes a financial statement designed with the funeral professional in mind. Average sale, call counts, a cash flow line (EBITDA), and benchmarked sections to our 100’s of clients doesn’t leave you guessing on how well you are achieving your goals. This service is for all sizes of firms at a fraction of the cost of hiring an accountant internally or outside of the business. Call today for a free assessment to see if Johnson Consulting Group can help you with your goals!
Management Services
How will you know how you compare with other organizations without a Performance Analysis. This Johnson Consulting service looks at all areas of your business, not just the financial side, to determine if your company’s processes and structure is maximizing your success in the Marketplace, Workplace, Customer Service, and Financial Management. After this assessment, we offer a strategic plan with specific tactical actions that are customized to improving your firms operating performance. We have proven success in enhancing the business environment, which ultimately affects the bottom line. The following is a short list of some of our offerings.
- Current Operating Performance Analysis
- Customer Service Assessment
- Workflow Analysis
- Competitive Marketplace Assessment
- Financial Analysis
- Web-based Family Satisfaction Survey and Sales Analysis reporting
- Customer Service Training
- Arranger Training
- Collections Training
- Management Development Training
- Employee Development Training
- Accountability Management Programs
- Employee Satisfaction Survey
- Customized Incentive Plans
- Employee Recognition Programs
- Phone Shopping Survey
- SWOT Analysis
- Marketplace Price Comparison Matrix
- Market Share Trends Analysis
- Master Marketing Plan
- Revenue Analysis
- Expense analysis
- Accounts Receivable Analysis
- Cash Management Strategies
- Strategic Pricing Plans
- Annual Business Operating Plans
- Strategic Planning
- Monthly Performance and Accountability Management Meetings
Business Valuation
“If you can not afford a valuation, you can not afford to be in business” Most people have a better understanding of what their personal stock and cash values are than their own business value in which their life’s work is involved. Having a detailed valuation and assessment of the financial and market conditions of the business is key to successful business decision making.
Johnson Consulting Group is quickly becoming the leader in the business valuation arena. We have analysts on staff who are creating business valuation packages for both funeral homes and cemeteries daily. Our strength comes from our experience and processes. Having bought, sold, operated, and started our own funeral businesses in the past, we have a keen sense of how funeral businesses are operated. From this experience we also assess the “non monetary” values of a business that can make one business more valuable than another. We call it the Johnson Consulting Value Matrix. With our involvement in Mergers and Acquisitions, we have a daily perspective on business values and what the market is willing to sell or buy a business for. We go yet one step deeper through our underwriting experience to help determine how financing constraints can affect the value on a firm. Through our proprietary web-based datasite, we can show you a demonstration of our valuation package. Call today for a free assessment to see if Johnson Consulting Group can help you with your goals!
Mergers and Acquisitions
“You’ve worked hard for every penny, so don’t leave any on the table” Whether a company is expanding through acquiring other business or selling their business, professional advice on value and structure is critical.
Johnson Consulting Group is the leader in the Mergers and Acquisitions arena having completed 100’s of transactions both on the funeral home and cemetery side. Our strength comes from our experience and processes. Having bought and sold our own businesses in the past, we have a keen sense of the gives and takes of transaction negotiating. We also utilize our proprietary web-based marketing data site to ensure a streamlined and confidential process that ensures that the transaction is completed in a timely manner. Our ability to find financing for buyers also greatly assists us with acquisition assistance as well as bringing forth qualified buyers to our selling clients. Call today for a free assessment to see if Johnson Consulting Group can help you with your goals!
Expanding and growing businesses is one of the indicators of a successful business. How a company expands can be the difference between great success and failure. Typically, funeral professionals operate businesses that have been with the family for generations. Due to this, they are in a debt position that is more conservative than in a new venture. When acquiring a new business, it is paramount to know what the fair market value is and create the right structure for success. Determining the correct loan size and the forecast or budget for years to come is critical to success.
Divestitures
When selling, It isn’t just about finding the right buyers, it’s about knowing what the fair market value is and developing a structure that will maximize what the seller wants! This is the single most important transaction the seller will be involved in. Wouldn’t it be smart to have a company on your side that has helped hundreds of sellers in this situation? You Bet!
Succession Planning
Transferring a funeral business to family members or key employees has been occurring for many years. Setting up that structure correctly to ensure success of the next generation while still maximizing value for the seller is critical. Structure in a transfer such as this is very important.
Tax Services
It’s just good business to have your taxes prepared by a firm that specializes in tax work and has a clear understanding, in depth knowledge and experience working with small businesses. Our accounting system and reports have been tailored to provide a very smooth and easy transfer of the quarterly and yearend financials to help expedite the preparation and filings.
Until Next Time
Now is the time to think about what you want to achieve for 2009 …
It’s pretty simple: if you are not satisfied with your results, but you keep doing the same things, it is almost guaranteed you will get the same disappointing results. We have help hundreds of funeral homes achieve their desired success. We can help your achieve your desired results and more …
We hope you found this issue informative, helpful and useful if you are contemplating taking the right steps to improve your performance and productivity.
From our perspective here at Johnson Consulting, there has never been a better time to be in funeral service than today.
Sincerely,
Jake & Tom Johnson
Jake Johnson talks about the Economy and the Importance of Cash Flow
November 12, 2008
In the second part of the conference call with Jake , together with Scott Meierhoffer of St. Joseph, MO, and Robin Heppell, Jake shares his thoughts on the economy and the importance of having a healthy Cash Flow.
Jake’s Perspective on the Economy
Click the Play button at the left of the silver bar >
Jake Emphasizes the Importance of Cash Flow
Click the Play button at the left of the silver bar >
Return to the November 2008 Management Insights Newsletter
September 2008 Management Insights Newsletter
October 1, 2008
From the Chairman’s desk:
Welcome back… It’s hard to believe that autumn is upon us and school is back in session. Our economy has taken quite a few twists and turns these last few weeks and now Congress is bailing out the private business sector. The Chinese proverb “May you live in interesting times…” certainly applies to our present day challenges…
We continue to get new subscribers to our newsletter and our feedback has been very positive. Thank you for your participation. We have asked for ideas and suggestions for various topics to discuss and we have received some excellent suggestions. One suggestion read:
Tom, you have a wealth of knowledge and experience in all aspects of funeral service, why don’t you devote an issue giving your perspectives on the challenges and opportunities we in funeral service face today…
We thought about it and decided to act on that suggestion. So this issue will be just that… I will address and share with you our perspectives as we view the landscape in funeral service at Johnson Consulting. Recently, I wrote an article that I believe addresses the current situation and my thoughts and ideas as to how to best address them.
We have had several suggestions to hold an annual educational meeting to share our perspectives on the state of funeral service and what successful funeral service owners and operators are doing to succeed in this challenging economy. We have improved the performance and financial results for each of our clients this past year and we want to share those same methods and processes with our audience. We are working on the details, as we speak, and will be announcing our plans soon.
In addition to sharing my perspectives in this issue, we want to let our subscribers know what we will be featuring in Orlando at the NFDA convention. We hope to see you there…
Regards,
Tom Johnson
Chairman
Current Economy and its Effect on Funeral Service: Tom Johnson
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 financial 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.
Read the rest of Tom’s article Funeral Service Industry Economy
Jake Johnson talks about Keys to a Successful Funeral Operation: Audio Recording
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.
Listen to the excerpts at: Successful Funeral Home Operations
Note from Jake: “If you plan to attend the NFDA convention and you have questions or would like more information on what I discussed, stop by our booth and I will be glad to answer your questions.”
2008 NFDA Convention, Orlando: Visit Us At Booth 2303
We are excited about all we have to show you at our booth at NFDA this year. It has been a very busy and productive year for our organization. We have earned business from many new clients and have continued to serve our existing clients employing several new enhancements to our products and services.
We are all facing new economic and operational challenges that require methods that we never had to employ in the past. As I mentioned in the article, accounting systems are vital in these times to guide you and help you pinpoint the areas that need attention and strengthening. Our accounting systems are actual management tools designed and tailored to do just that- Web-based and available to you 24/7 with current information.
Owners and lending institutions are relying on our expertise to provide a thorough and in-depth Business Valuation of a funeral home’s total worth. The tightening of Credit has made it more challenging to obtain in all segments of our economy. Funeral Service is no exception. We can help.
Our M&A business is strong and growing. We have earned the market leader position and have all the expertise you may need.
We will be front and center anxious to say hello and show you our new product enhancements and answer any questions that you may have regarding our products and services. We will be featuring services ranging from:
- Management and Operational
- Performance Analysis
- Benefits of a Business Valuation
- Mergers and Acquisitions
- Succession Planning
- 24/7 Web-based Accounting
- Web based Customer Surveys and Sales Analysis
- Management Services
Be sure to stop by our booth and say hello to the Johnson Consulting team. We look forward to seeing you…
We realize the cost of travel these days may influence the attendance at the convention this year. We want to assure you that if you will not be attending, we can very easily bring our convention messages directly to you. How? Just give us a call or reply to this newsletter and request any information you need and we will respond promptly.
If you plan to attend, have a safe trip to Orlando.
Exceeding Your Expectations:
“Family Appointment”
If this family had called our P.M. receptionist this time last year, no way would we have said all the right things to help this family at a very difficult time. The JCG / Van Beck training has showed an immediate impact on the way we respond to our families (RACM) and created that important and lasting first impression. Thanks again for all you guys do for us.
- Anthony Guerra, Guerra Gutierrez Mortuaries, Los Angeles, CA
* * * * * * * * * * * * * * * * * * *
“JCG Web-based Accounting System”
JCG 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
Until Next Time:
Now is the time to think about what you want to achieve for 2009 and let us know if we can help you achieve your goals.
We hope you enjoy the recordings and articles and would appreciate your feedback. If you could do us a small favor - let us know what you would like us to cover in future issues.
Sincerely,
Jake & Tom Johnson
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
Click the Play button at the left of the silver bar >
Jake’s Parting Thoughts
Click the Play button at the left of the silver bar >
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.
Return to the September2008 Management Insights Newsletter
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.
Return to the September2008 Management Insights Newsletter
2008 NFDA Convention: Visit Us at Booth 2303
September 28, 2008
We are excited about all we have to show you at our booth at NFDA this year. It has been a very busy and productive year for our organization. We have earned business from many new clients and have continued to serve our existing clients employing several new enhancements to our products and services.
We are all facing new economic and operational challenges that require methods that we never had to employ in the past. As I mentioned in the article, accounting systems are vital in these times to guide you and help you pinpoint the areas that need attention and strengthening. Our accounting systems are actual management tools designed and tailored to do just that- Web-based and available to you 24/7 with current information.
Owners and lending institutions are relying on our expertise to provide a thorough and in-depth Business Valuation of a funeral home’s total worth. The tightening of Credit has made it more challenging to obtain in all segments of our economy. Funeral Service is no exception. We can help.
Our M&A business is strong and growing. We have earned the market leader position and have all the expertise you may need.
We will be front and center anxious to say hello and show you our new product enhancements and answer any questions that you may have regarding our products and services. We will be featuring services ranging from:
- Management and Operational
- Performance Analysis
- Benefits of a Business Valuation
- Mergers and Acquisitions
- Succession Planning
- 24/7 Web-based Accounting
- Web based Customer Surveys and Sales Analysis
- Management Services
Be sure to stop by our booth and say hello to the Johnson Consulting team. We look forward to seeing you…
We realize the cost of travel these days may influence the attendance at the convention this year. We want to assure you that if you will not be attending, we can very easily bring our convention messages directly to you. How? Just give us a call or reply to this newsletter and request any information you need and we will respond promptly.
If you plan to attend, have a safe trip to Orlando.
Return to the September2008 Management Insights Newsletter
July 2008 Management Insights Newsletter
July 24, 2008
From the Chairman’s desk:
Welcome back! Our subscriber list is growing. We have now welcomed over 700 subscribers and we continue to get good responses on our format and more importantly our content.
In my years of operating funeral homes on a national scope, July was the month of our fiscal year that served as the benchmark and indicator for how well we were performing against our annual plan. The results of the first two quarters are usually a good indicator to how we would finish the year. When we were behind the curve, the good news was we had time to make adjustments where it was necessary and we were fortunate to have the financial reports to pinpoint our weak areas and take corrective action. Today, we employ the same successful processes, not only for our own locations, but also for our many valued accounting clients.
In this issue, we will share with you our thoughts on what we feel are the critical features of an accounting system. We have chosen to pose our “Top 10 Questions” to ask to evaluate your current account system. Immediate access to current financials is not only important; it is critical to managing a successful business. Receiving a summary analysis of the key financial drivers with industry benchmarks to compare, we feel, is a must have. Our philosophy here at Johnson Consulting is straightforward: you deserve more than a monthly financial report card, you need that, but in addition, a management tool to identify where you need to focus.
In addition to our focus on accounting, we have asked Glenn Gould, CEO of MKJ Marketing, to share his thoughts on another critical information source that a funeral home operation needs when contemplating an expansion or building a new facility. Doing your homework, asking the right questions are the wise first steps before starting to draw up the plans.
In closing, we leave you with this quote from Francis Bacon …
“A prudent question is one half of wisdom.”
At Johnson Consulting, we believe we have the other half … the answers. We hope you enjoy this issue and find it informative and helpful. If we can answer any questions or assist in any way, give us a call. We are here to help…
Regards,
Tom Johnson
Chairman
Best Practices: Accounting Program
Top 10 Questions you should ask about your current accounting system …
10. Does your accountant know and understand the funeral business?
9. How detailed is your annual budget?
8. How detailed are your monthly reports showing your results against the budget?
7. Does your system break out each location and give you a consolidated report?
6. Does your accountant offer management services to improve your financial results?
5. Do you have to wade through rims of paper to get the monthly results?
4. What’s the average time it takes to get month end financials?
3. Do you have 24/7 access from anywhere to see your current financials?
2. Is your system constantly updated throughout the month?
1. Is your biggest resistance to change the perceived hassle and disruption?
~ Al Asta
Solutions to Common Problems: The Cost of Marketing
The cost of marketing-by-assumption can be enormously high, particularly when an organized market profile study can easily prevent mistakes. When people know rather than assume they will make significantly better decisions. Market research will pin-point consumer groups who may not be aware of your funeral firm or could be attracted to patronize a particular funeral home if they were made aware of the special services provided, such as on-site crematories, reception and children’s rooms. Creating advertising that will impact decision making is far easier once the consumer’s hot buttons have been identified.
Another benefit of a market analysis for existing facilities is to determine the importance of certain criteria in the selection of a funeral home. In some regions, consumers are very familiar with their funeral home options and are likely to refer to their own experience when selecting a funeral home. But, in a highly mobile society where as much as 20% of residents relocate annually, there are many consumers with no local funeral home experience upon which to base a decision. In these cases, it is important to have an understanding of the role the clergy, yellow pages, internet, print and broadcast media advertising play in funeral home selection.
Exceeding Your Expectations:
The Johnson Consulting Group has been extremely helpful and supportive in helping me to understand how to manage my business and to work within a budget.
The Johnson accounting system has provided me with the type of real time record keeping that I need to run my business. With a very specific funeral industry chart of accounts I am able to get important details that I would not get with any other accounting company. It is important to me to know where my cash balances are at all times and this system helps me to manage that as well.
The support staff at Johnsons is all outstanding. They are all very knowledgeable, industry trained people. We can call them any time and get instant answers to any questions we may have.
One of the big benefits they provide is a month end review and analysis of my financial statements. I am able to go line item by line item with an operations specialist and learn to use these statements to manage and make decisions for my business.
I know that my style of managing a company has been different to say the least. I can appreciate the fact that as owners and managers of Funeral Homes, the Johnson Consulting Group has seen and heard it all and has a solution to most of what I will encounter. I respect the Johnson Consulting Group.
- Linda Mitchell, Black and Clark Funeral Home, Dallas, Tx
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After purchasing my funeral home in 2006 I chose Johnson Consulting to handle my funeral business accounting needs. I needed a partner that understood the funeral industry that would provide me with accurate and timely reporting and Johnson Consulting does just that. The monthly reports that I receive give me the proper information to help me make decisions and run my company. I am able to focus on growing and managing my funeral home and not be bogged down with paper work for accounting. The professional staff at Johnson Consulting has taken care of me and my funeral home and I look forward to a long partnership with them.
- Jason McDougal, McDougal’s Caldwell Chapel, Safford, AZ
Until Next Time:
We hope you found this edition to be interesting and informative. Any suggestions for future issues are always welcome.
If you wondering how a blog could help you connect with your community, Robin Heppell (the architect of JCG website / blog / newsletter), together with 3 other funeral bloggers are hosting a free Funeral Blogging 101 teleseminar on July 30. Visit here to register >>>
We believe so strongly in the need to have an annual plan and an accounting system that ties to that plan. A system that provides ontime data, tracks the results and pinpoints the areas to focus.
Yogi may have said it best:
“If you don’t know where you are going you’ll end up some place else…”
Enjoy the days of summer…
Sincerely,
Jake & Tom Johnson
About Our Accounting Services
July 22, 2008
“Operations Experience”
Principals have a combined 400 years in funeral business experience. They have spent their careers owning, operating and managing funeral and cemetery operations large and small and have faced virtually every conceivable funeral business challenge in operating hundreds of funeral homes and cemeteries across the country. Currently they own and operate funeral homes as well. They know what it’s like to make decisions as an owner while operating under debt constraints, an ever-changing industry, competition, and employee issues.
“Large Company”
Johnson Consulting has a corporate office based in Phoenix, Arizona. We have multiple analysts, operations personnel, administrative personnel, and accounting staff based in the home office. Johnson Consulting Group also has field representative based around the nation. These field personnel are also former funeral operations individuals themselves.
“Funeral industry leaders”
Staff is comprised of previous and current funeral home owners and executives of national funeral and cemetery companies as well as national funeral supplier operations executives and board of directors. With the largest base of personnel and knowledge to draw from we can find the answer or the solution to virtually every problem that has been faced in the funeral business.
Value Identifiers compared to other Accounting firms
Function
- Web based with 24/7 access from anywhere.
- All software maintenance and training are handled by us.
- Client does not have to go to multiple individuals or talk to non-industry personnel for help.
- “JCG is continually updating your data throughout the month to where owners can see current balances, revenues, expenses etc…”
Advantages
- Clients can run financials at any time on their own without waiting
- Reports are received no later than 30 days after the previous month end. (they will be reconciled also)
- Financials are posted on JCG’s secure data website for easy and quick access.
- JCG offers management services that are integrated with the accounting services to track productivity improvements including a customer survey program which draws directly for the data input in the accounting systems.
- JCG offers other services in all areas of funeral home operations offering a Total Solutions approach to a funeral business owner.
- Incorporate all locations giving a complete and comprehensive analysis for multiple location businesses.
- Set up costs are far less and time consuming than trying to do it on your own.
- A web based high powered server that handles all the funeral homes’ financial functions for all locations. Very expensive to do it on your own. It would be cost prohibitive for most owners.
Easy to get Started and Use
- All setup is done over the internet, no travel required. All training handled over the internet.
- JCG does all the set up and can have a client connected to their company and up a running in less than 5 working days from the signing of the engagement.
- Paperless which means client does not have to copy and send all contracts and invoices as with other accounting companies.
Knowledge of the Funeral Industry
- We know the industry as opposed to a local accountant that probably will not have another funeral home client to draw experience from.
- Trend analysis (Modified P&L) is more detailed than competition. All valuable information is on one summary report instead of having to look through multiple reports.
- It is not just accounting, it becomes a management tool that provides budgets, trend analysis, industry standards and benchmarks, pinpoints areas to focus on and improve.
Call us today for a no obligation consultation to see if our Funeral Home Accounting Program is right for you!
Return to the July 2008 Management Insights Newsletter
Making Better Decisions is a Matter of Having Better Information - Glenn Gould
July 17, 2008
Every four years American voters’ most intimate social and political thoughts are picked and studied as politicians develop platforms, positions and talking points. This is where the period of peak demand for research services, but also where theory and practical application meet. Politicians will pay whatever is necessary for new research techniques that will reveal data competitors will not have. The success of these ideas filter into commercial applications after they have been proven in the political arena.
Tightening profit margins in funeral service are causing funeral business of all sizes to develop strategic plans. Long term and short term plans that involve succession planning with younger generations acquiring family businesses, advertising budgets, acquisition and sale of businesses or properties. All important, perhaps life changing, decisions.
Management consultants meet with family business owners to assist in this process, and they ask important questions; what is your market share, why do people use your firm versus competitors, and vice versa? Is your location, facility, staff, prices, services, name awareness, image, and pre-need competitive in the market? Too often these questions are answered based upon perceptions, or misperceptions, family members have held for generations, starting with great, great grand daddy.
Too often these marketing plans simply reinforce existing assumptions. Owners and managers will assume that everyone believe like they do about services, competitors, prices and facilities. The reality is without some source of objective data, developing a long term strategy without market research is like getting a physical without a blood test.
How Market Research Contributes to Planning
The cost of marketing-by-assumption can be enormously high, particularly when an organized market profile study can easily prevent mistakes. When people know rather than assume they will make significantly better decisions. Market research will pin-point consumer groups who may not be aware of your funeral firm or could be attracted to patronize a particular funeral home if they were made aware of the special services provided, such as on-site crematories, reception and children’s rooms. Creating advertising that will impact decision making is far easier once the consumer’s hot buttons have been identified.
Another benefit of a market analysis for existing facilities is to determine the importance of certain criteria in the selection of a funeral home. In some regions, consumers are very familiar with their funeral home options and are likely to refer to their own experience when selecting a funeral home. But, in a highly mobile society where as much as 20% of residents relocate annually, there are many consumers with no local funeral home experience upon which to base a decision. In these cases, it is important to have an understanding of the role the clergy, yellow pages, internet, print and broadcast media advertising play in funeral home selection.
Using Market Research to Plan New Facilities and Acquisition
The tradition of funeral service is to take uncalculated risk when expanding or building a new funeral facility. Through pure tenacity on the part of owner/operators, many of the nation’s newer funeral homes have remained open when business volume did not merit the cost. Most of these unnecessary and expensive facilities could have been avoided by a moderate investment in consumer market research.
Many funeral homes have been built because an operator in a neighboring community felt the funeral homes in the area did not provide quality services, or their facilities were inadequate. These assumptions ignore a fundamental element of funeral service: that funeral business, like many other businesses, is more about personal relationships than any other single factor. Judging a funeral business by its building or service is the same as judging a book by its cover. Typically, the existing firms in an area meet the local clientele’s expectations. It can take years for a new facility to build volume simply because residents like the owners of a competitive firm, regardless of the building or prices.
A market research study during the planning stages of a new facility will reveal information about prospective consumers by focusing on they really want from a funeral home; what factors they consider when selecting a funeral home. Accurate and specific consumer attitudinal information about a prospective trade area can predict at-need volume and assist funeral home owners and managers in determining the demand for a particular facility. Fundamental questions like location, building design and size can be answered.
Over the past five years, only one of every two clients conducting a prospective trade area study has decided to move ahead with new facilities. This means that half of the time owners that were prepared to invest millions of dollars in new facilities were dissuaded from moving ahead based upon information they learned from market research, such as:
- What influences a family to choose one funeral home over another?
- What families see as assets and liabilities of one facility versus another?
- The proportion of consumers owning a pre-paid funeral.
- The proportion of families who are unsure as to which funeral facility they will patronize.
- Sources used to select a funeral home.
- Present and projected volume of deaths in an area.
- Demographics, i.e.: age, income, length of residence.
Prior to purchasing property for a new facility, research will indicate whether or not there is sufficient at-need volume to support a proposed facility or if one site would be more productive than another. By understanding the consumer’s priorities, marketing efforts are made more efficient and productive. A funeral firm can be assessed in terms of:
- How well known and liked is the staff by local consumers?
- How does the firm’s reputation compare to that of others in the area?
- Does the firm meet the consumers’ expectations as far as flexible costs and services?
- Is the firm associated with one religious group more than another?
- Do consumers see value in special services such as aftercare, pre-need or rental caskets?
Having conducted 600 market research studies and moderated hundreds of focus groups and test panels for funeral homes, cemeteries and death care industry vendors, the most amazing phenomena is to observe an intelligent business manager make a business decision with significant long term implications in direct contradiction to hard research data. It’s impossible to list all of the instances when this has occurred, but the following are typical:
- A mid-west funeral home owner commissioned a research study to determine the prospects for a new funeral home in a relatively large city. The research data demonstrated that the client already pulled most of the business from this area and because the population was so young and transient, the number of deaths from the area would not increase for many years. The client chose to proceed with the new facility under the rationale that he had two sons and wanted each to have their own business. The client was apprised that what he was actually doing was digging an expensive hole from which his son would spend the rest of his career trying to emerge, but the facility was built. Fifteen years later it has yet to conduct a sufficient number of calls annually to meet the overhead cost.
- A major industry vendor was considering a personalization product to replace a more generic standard product that all funeral homes use. The proposed product had merit as it was more attractive, but the nature of the product made it very cumbersome for funeral homes as it would require them to carry extensive inventory. The client observed two focus groups of funeral directors, each of which made it very clear they would not purchase the product because of the need for a large inventory and because the product is so specific as to limited the opportunities for use. None the less, the client ignored the research finding and pursued the product. The product failed miserably and contributed to the president’s termination.
- A funeral home client in a mid-western city had not initiated a pre-need marketing effort even as competitors experienced good success with their individual efforts. The client conducted a research study which clearly demonstrated that the competition was gaining market share among younger adults (age 55+) primarily through their pre-need sales efforts. The research also demonstrated that consumers did not believe the client offered pre-need and had reluctantly shifted their preference to other firms that did offer pre-need. As the age 55+ consumers aged into the age 65+ generation, the client funeral home has steadily lost market share among families preferring traditional burial and now has a far higher cremation rate than the competition. The very high cremation rate has resulted in lower profit margins, and the owners have lost tremendous equity as the acquisition value of the firm has declined.
- Funeral home owners often consider building a new funeral home too near a major competitor under the assumption that being located near a major competitor is a good strategy for pulling business from the competitor. Research and experience has demonstrated just the opposite. Consumers need a good reason to change their funeral home preference from one firm to another, and simply locating near their preferred funeral home is not good enough. A market research study was suggested to a client that had intentions to do exactly the above. The research was conducted and the results demonstrated that a new facility in another area of town would be far more successful. None the less the client built the new facility on property near the competitor. Today that facility is law offices.
- A funeral business has two facilities that operate with similar, but different names. One of the facilities has never performed as well as the other. The owner commissioned a research study to determine why one building was so much more successful then the other. The results demonstrated that consumers did not know the two buildings were owned by the same company and held negative images perceptions of the less successful facility. The solution was obvious; change the name of the less successful facility to reflect the common ownership and promote the two facilities under one name. Management was reticent to drop the heritage names associated with the underperforming facility, and to date, the facility continues to underperform.
- A large manufacturing company commissioned test panels to create a merchandising system that would sell more profitable product. The research results dramatically indicated that the product line was to broad and that sales would improve by deleting lower end products, implementing a “good, better, best” merchandising strategy, and using a presentation book or computer based presentation as opposed to the current selection room merchandising strategy. Although investing in excess of $100,000 in the study, the results were never implemented; product mix continues to be the company’s primary challenge.
Perhaps the same mentality explains why so many funeral homes and cemeteries pursue courses that run contrary not only to research findings, but empirical data as well.
- Funeral businesses nationally have installed reception rooms with outstanding success when funeral arrangers are trained to present their catering services, yet the great majority of funeral homes fail to take advantage of this obvious opportunity.
- Funeral home profits are declining precipitously from cremation, but so few firms are implementing arrangement room strategies such as packaging, and presentations systems that have proven to increase sales and customer satisfaction.
- Response to lead generating advertising has consistently declined over fifteen years as cemeteries try to sell traditional graves and mausoleum. Research indicates 80% of consumers that want burial already own cemetery space. Direct response advertising, particularly advertising that offers price discounts succeeds only when there is a pent up demand for the product. 61% of adults age 45+ are either unaware of cremation memorials at cemeteries are simply do not want memorials, as such the advertising fails simply because there is no audience. The objective of cemetery advertising should be to create a demand for cemetery memorilization instead of further deteriorating the perceived value of cemetery memorials as opposed misleading “free veteran space” advertising.
- There are too many funeral homes in the US; as a result weaker firms are becoming financially desperate. Because desperate people take desperate risks, pre-need and other financial scandals are rampant in the death care industry. There is an obvious need for legislation to protect the consumer from unscrupulous funeral home and cemetery operators, but the state and national associations have failed to take a proactive position by recommending regulation that could preclude the actions of a few from undermining the public’s confidence in all death care businesses while also protecting the public.
- Local ownership has been the most successful advertising strategy ever implemented in the funeral home industry at shifting business from one funeral home to another. In fact, local ownership advertising is one of the main reasons the corporations are selling off isolated facilities where they are at a competitive disadvantage with locally owned firms in deference to markets where corporate operated funeral homes dominate. Yet, independent funeral homes have convinced themselves consumers no longer care about ownership because they don’t hear them talk about it anymore. It is so apparent that consumers considered ownership important when advertising informed them of the local versus corporate issue. Consumers learn the issues they should consider through advertising so your advertising must raise the issues you want consumers to consider important; not the other way around.
Making Market Research Work
There are many methods for collecting consumer data, and each was developed to meet a specific need. Focus groups are becoming increasingly common in funeral service as management teams need qualitative data that can not be ascertained through telephone interviews. Focus groups bring residents of your community together to discuss issues important to you; such as special services, the consumer’s understanding of cremation, memorialization with cremation, columbarium niches, cremation scattering options in cemeteries, and other options.
Most funeral home research needs are quantitative in nature, meaning a large number of respondents must be surveyed. Quantitative research answers fundamental questions such as why one firm is preferred over another, why is volume down, what do consumers like about one firm, versus another, and what are the opportunities for market share gains.
It’s very easy to commission a research study that produces 200 pages of charts and graphs but no practical information, no recommendations or direction upon which to base a decision. One funeral home owner was convinced to conduct a mail out survey study. The questionnaire was sent to adult residents of his community; of which only 12 were returned, six of which were clergy members. A thick report was produced, which obviously had no value what so ever at reporting what the community thought about the local funeral homes.
Market research should be used to investigate specific rather than general issues. For example, the most common question business people will ask is “Why do consumers do what they do?” Determining “why” is deceptively difficult. When people are asked direct questions about what they do, they are inclined to answer with rationalizations rather than reasons because people want other people to believe they are reasonable. So, they search for ways to rationalize their behavior and make their actions acceptable to others. Answering “why” is not a realistic research objective; but knowing what consumers will do meets our needs as marketers. Market research should answer specific questions that contribute to specific decisions rather than a long list of generalizations:
“Is there a market for this new facility?”
“How much can we charge for our services?”
“How much opportunity is there in the market for volume growth?”
“What do I have to do to grow this business?”
“How is my pre-need program doing compared to others in this market?”
Involve all individuals with responsible positions within the firm to recommend issues that should be investigated by the research. Whether at-need, pre-need, or family follow-up, there will be important questions which, when answered, will allow this individual to better perform and may apprise the rest of the organization of special opportunities.
Make a commitment to accept the results of the research study even when they run contrary to held beliefs. The marketplace is full of misinformation. Consumers believe things to be true that you may know to be false. This does not mean the survey is wrong; rather, someone is misinformed. One of the greatest contributions of a market profile study is to reveal areas of misinformation so as to allow managers to make their promotion and advertising more effective and productive by realigning perceptions.
Conclusion
The dynamics of a sophisticated and diverse consumer market combined with high interest rates and construction costs and a fiercely competitive marketplace make a careful marketing plan for prospective or existing funeral facilities essential for success.
Every manager and owner in the funeral industry should be alert for ways to reduce the risks of a new facility and for ways to generate greater volume at existing facilities. As many funeral professionals have stated, “It costs too much today to make mistakes.” To avoid that end, market research can be a most helpful tool.
Remember, marketing-by-assumption leaves open the possibility that it may be you who is misinformed and not the consumer.
~ Glenn H. Gould, CEO, MKJ Marketing.
Glenn’s diverse management and consulting experience has contributed to MKJ Marketing becoming the leading marketing influence in the death care industry. His new book “Deathcare Marketing, 25 FAQ’s”; has recently gained NFDA endorsement, and is in use by mortuary schools. Glenn’s articles appear regularly in major death care industry publications, and he is a frequent presenter on death services marketing at seminars and conferences.
Glenn’s work experience includes executive positions with Bausch & Lomb, General Mills and the Batesville Casket Division of Hillenbrand Industries. In funeral service Glenn assists funeral homes and death care industry vendors in establishing marketing and advertising plans. He is recognized for his market research services having conducted over 500 positioning and prospective trade area studies for funeral homes throughout the US and Canada. In addition, Glenn has conducted quantitative research studies, moderated focus groups and/or consulted to:
- Wilbert, Inc.
- The Woodlawn Cemetery
- Funeral Service Foundation
- Capital Holding
- Open Dialogue
- Columbian Financial Group
- Keystone Group Holdings
- Aurora Casket Company
- Consolidated National Life
Glenn has testified in multiple civil suits between funeral homes as an expert witness, served on the Board of Directors of the Pittsburgh Institute of Mortuary Science and instructed the Small Business Class for the St. Petersburg College, School of Mortuary Sciences. His biography appears in Who’s Who in America; he holds BA and MS Degrees.
Return to the July 2008 Management Insights Newsletter
June 2008 Management Insights Newsletter
June 26, 2008
From the Chairman’s desk:
Welcome! The month of May has come and gone and we are back with our June issue of Management Insights. We sincerely appreciate all the favorable feedback and comments we received from several of our subscribers last month. We feel our launch accomplished our goal of providing valuable and useful information. That’s the course we have chosen.
Now on to this month’s issue… Our economy continues to struggle and it would appear we are going to be challenged for quite sometime. But it is in these times when we are forced to take a harder look at our operations and evaluate what we are doing and how we can possibly do it better and more efficiently. That is the good news of a challenging economy. It compels us to question what we do and what value it has to our clients and families. Is there a better way?
The many calls on this subject that come in to us are fairly common: “I know I have to make some changes, but I don’t know where to start or how to go about it.” At Johnson Consulting, we have developed over the years a very thorough and productive tool to help our clients in this area. Our Performance Analysis process identifies the areas of your total operation that need attention and by applying proven techniques can produce amazing results in a very short period of time.
Clients ask us how we differ from our competition. Our answer is simple and straight forward:We fix what is wrong and keep in place what is working well. Our staff is comprised of funeral directors who have been there and done that … Believe me, that is a huge difference.
Call us if we can help…
Regards,
Tom Johnson
Chairman
Best Practices: Management Services
At Johnson Consulting there is no Gray Matter … we leave no Stone unturned… We use an exhaustive pre-site and on site analysis to accurately analyze and measure the client’s current performance and to thoroughly understand their business. Clients receive a Performance Analysis that includes a Customer Service Assessment, Workflow Analysis, Competitive Market Share Assessment, and Financial Analysis. We spend time getting to know the staff and we learn from their insights and experience.
Our philosophy is simple: We fix what is broken, not what is working. We use a bottom up approach where we engage the staff - get their input and build their confidence and trust. Other companies employ top down approaches which results in less staff involvement and a low buy in. This usually results in short term solutions that are not sustainable.
Read the entire description of our Management Services Program here …>>
Solutions to Common Problems: Knowledge Replaces Fear
In this issue of the newsletter is an article by Todd Van Beck on exploring the idea that “Knowledge Replaces Fear.” Van Beck discusses the theme of how operating a funeral home in such complicated time can create a sense of fear concerning the future.
Van Beck laments the fact that the graduate school of funeral service management does not yet exit, and he relays an interesting story concerning a confrontation he witnessed between a government regulator and a courageous funeral director at a large funeral directors convention.
The article ends with identifying Johnson Consulting as being an advocate of funeral service management which is made up of no funeral service “outsiders.” If you have ever gone to work and sat down at the desk and thought “What now?” this article is something to read.
Read the entire article here - - >>
Exceeding Your Expectations:In a time of unprecedented change and challenges for our profession, the Johnson Consulting Group has been invaluable in helping us clearly identify problems and concerns and have helped us develop a clear vision and plan for our future success.
With the ability to draw on the diverse backgrounds of all the Johnson Consulting Group, they are able to address all of our challenges and growing needs.
The advice of the group has been invaluable in providing concrete ideas, new processes and methods of improving and growing our business that propel us strongly into the future. It is our pleasure and privilege to have them as part of our organization.
- Carlos Guerra, of Los Angeles, California
Johnson Consulting was a bright spot in the acquisition process of my funeral home. I was new to the process. JCG took a personal interest in me and my funeral home. Every question was answered and every document was supplied me before I made my bid all in a two week span. They made a hectic time into a somewhat pleasant experience which I am very grateful. The bank was pleased at the information that was provided in a timely fashion. I would recommend that anyone interested in buying or selling use Johnson Consulting for the transaction if nothing else but for the expertise in their field.
- Robert H. Bell of Springfield, Tennessee
Until Next Time:
We hope you found this edition to be interesting and informative. Any suggestions for future issues are always welcome.Glenn Gould, CEO of MKJ Marketing, will share his many years of experience and expertise in marketing in our next issue “Making Better Decisions is a Matter of Having Better Information.”
We leave you with these words of wisdom from two proven business leaders. They apply to all of us that have the desire and objective to maximizing our productivity and achieving superior results:
“The most serious mistakes are not being made as a result of wrong answers. The truly dangerous thing is asking the wrong question.” - Peter Drucker
“Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion. We know where most of the creativity, the innovation, the stuff that drives productivity lies - in the minds of those closest to the work.” - Jack Welch
At the Johnson Group we ask the right questions and involve the entire staff …
Sincerely,
Jake & Tom Johnson