March 2010 E-Newsletter
March 5, 2010
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Johnson Consulting Group | 8095 North 85th Way | Scottsdale | AZ | 85258
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November 2009 Management Insights Newsletter
November 25, 2009
From the Chairman’s desk:
Welcome back. Happy Thanksgiving. It’s truly a time for us to give thanks for our families, friends, associates and all the blessings bestowed upon us. We, at Johnson Consulting, are very fortunate to have the many clients and friends that we work with each day and throughout the year.
Our year has been a very busy one. We relocated our corporate offices to give us additional space to better serve our clients and make room for our product enhancements and some new innovative products that have been well received in the marketplace.
We are very fortunate and excited to have added three widely recognized individuals as new associates to the Johnson Consulting Group: Alan Creedy, Rich Sells and Manny Francisco. Rich and Manny’s highly successful careers in pre need funeral and cemetery marketing and operations have given us the opportunity to expand our services in this area. Our first client is a large cemetery operation in Mexico.
2009 has been a very interesting year for us in funeral service. Our economy has had some effect on average funeral value. Cremations are still increasing. Credit is beginning to loosen up, but not back to where it needs to be. Our new Loan Sourcing Program has helped several of our clients. We had an excellent year in our M&A division, but it came more from quality than quantity. And then there is Wal-Mart entering the casket business. If they win, we only have ourselves to blame.
A few issues ago, we added a survey to our newsletter and we received an excellent response from our first one. Last issue we ask just one question: “This summer our nation lost two very influential and trusted public figures, Walter Cronkite and Ted Kennedy. We ask you: Who, in your estimation, is the most influential living person in the funeral service industry today?”
I must be candid: our responses were underwhelming to say the least which may have said a lot. “I just cannot think of “the person” The one that got the most votes was nameless but a very powerful and influential individual in our society: THE CONSUMER. We better all listen to what they are saying.
Since we are fortunate to have a large subscriber list that is made up of both funeral home owners and associates as well as suppliers, we thought we would ask you to respond to a few questions pertaining to the supply side. We will again make it short and easy to reply. We sincerely appreciate you taking the time to respond.
As we begin to close out the year 2009 and put it in the record books, my perspective will be that it was a challenging, but productive year. We worked with several firms that made a commitment to change and make improvements to their operations. Their potential worst of times turned into much better times and for them the best is yet to come. Doing more with less and doing the right things, right will make all the difference.
We hope you enjoy this issue …
Regards,
Tom Johnson
Chairman
Year end tax tips from our tax service partners
Johnson Consulting does not provide tax advice, but relies solely on the experience and expertise of:
Tax Services
As the year end approaches, now is the time to start planning for your 2009 income taxes. Conventional tax planning calls for deferring income into 2010 and accelerating tax deductions into 2009. However, these are anything but conventional economic times. With large federal deficits and an expanding federal debt, we see increased tax rates in the future. The only question is how high and when will these tax increases take effect. Much will depend on how the economy performs in 2010. If the economy continues to struggle in 2010, we feel that the tax cuts scheduled to expire at the end of 2010 will simply be allowed to expire. However, if the economy improves during 2010, we think that we could see increases as early as 2010.
Most taxpayers have thus far experienced lower taxable incomes in 2009. Many taxpayers have large capital losses generated in 2008 that are being carried over to 2009. Investment income in 2009 will most likely be lower. This means that for many taxpayers, their marginal tax rates will be lower in 2009 than they expect to have in 2010. Therefore, it may make sense this year to accelerate income into 2009 and defer deductions into 2010. When looking at any tax strategy, the alternative minimum tax should be considered. Continue Reading Funeral Home Tax Tips>>>
Feature article
Johnson Consulting highly recommends that you survey your families that you have served. It is a gold mine of valuable information that will help you formulate your marketing plans and strategies….
2010 – THE BIG QUESTION – “DO WE REALLY KNOW WHAT IS GOING ON?” Todd Van Beck
This is a powerhouse of a question for funeral service and cemetery work. Do we really know what is going on out in the world? Of course we do, certainly we keep tabs on how the community is changing, we keep our fingers on the pulse of the funeral/cemetery environment; of course we do, been doing it for years.
These responses are predictable and totally natural and understandable. However they do not answer the question – do we know, really know what is going on out there? It might be that we don’t know precisely the details, and the realities, and nay the unpleasant news that might be, could be, and is most probably is floating around our communities about you and me.
Here is an example. I once had occasion to perform a focus group for a particular funeral home. Most everything was changing for this particular funeral home and unfortunately the owners were in psychological denial. In other words they truly and honestly “thought” they knew what was happening but in reality there were many gaps in their “knowledge” base. So they asked for a focus group. Continue Reading about the value of Funeral Home Surveys
Product Highlights for 2009 and What we will be featuring in 2010 ….
2009
1. JCGPerformanceTracker™ Web-Based Customer Survey and Sales Analysis Program
2. Accounting Services Growth
3. Management Service Growth
4. Expanded services in Preneed Consulting Through Rich Sells and Manny Francisco Coming on board
5. New Enhanced website with client portal
6. Introduced our Funeral Business Performance Analysis and Improvement Package along with Summary Strategic Plan
7. Busiest year ever at Johnson Consulting for Private funeral home acquisitions and divestitures
2010
1. Web-based client access and interactive menu for reviewing funeral business customer ratings and sales performance
2. Summit Meeting in early 2010 (March)
3. Johnson Consulting Group’s (Memorial Classic Golf Tournament in Las Vegas, NV)
4. Monthly benchmarking reports for our accounting clients (new enhancement to accounting)
5. Johnson Consulting Group funeral study group financial analysis package for study group’s wishing to make the most of their financial discussions
6. Expansion of the already extensive training library
From all of us to all of you have a great Holiday Season
Feature Article – 2010 – THE BIG QUESTION – “DO WE REALLY KNOW WHAT IS GOING ON?
November 24, 2009
Johnson Consulting highly recommends that you survey your families that you have served. It is a gold mine of valuable information that will help you formulate your marketing plans and strategies….
2010 – THE BIG QUESTION – “DO WE REALLY KNOW WHAT IS GOING ON?” Todd Van Beck
This is a powerhouse of a question for funeral service and cemetery work. Do we really know what is going on out in the world? Of course we do, certainly we keep tabs on how the community is changing, we keep our fingers on the pulse of the funeral/cemetery environment; of course we do, been doing it for years.
These responses are predictable and totally natural and understandable. However they do not answer the question – do we know, really know what is going on out there? It might be that we don’t know precisely the details, and the realities, and nay the unpleasant news that might be, could be, and is most probably is floating around our communities about you and me.
Here is an example. I once had occasion to perform a focus group for a particular funeral home. Most everything was changing for this particular funeral home and unfortunately the owners were in psychological denial. In other words they truly and honestly “thought” they knew what was happening but in reality there were many gaps in their “knowledge” base. So they asked for a focus group.
A focus group as most know is simply an elaborate survey of the attitudes and opinions of the community concerning a funeral home/cemetery operation. They are extremely valuable, but not used very much in this line of work – for a variety of reasons.
Before the focus group started the owner took me to dinner and with great confidence proclaimed that in “my town, my name is synonymous with funerals.” I sat quietly sipping my drink.
Family surveys, community focus groups, in fact any type of truly inside information that we a glean about our operations is today terribly important, in fact I can’t remember a time in funeral service when this importance was not greater.
Years ago most funeral homes had their clientele. That was it. The Catholics went here, the Protestants went there, the Jews went here, the rich went there and the poor went here, the Masons when there, the American Legion went here, and so on. It was indeed what the marketing guru’s call a “niche” market. Not so today.
The culture is and has been homogenizing itself for years, and make no mistake this social movement which units many different cultures, traditions, beliefs, mores, and folkways has had a tremendous effect upon funeral service. Because of the tremendous effect, focus groups and family surveys have emerged as the most economical, safest, and more accurate method for any operation to gauge just what is actually going on in their world instead of depending on speculation after speculation, random opinions, and finally idealized hopes and dreams which are not based in reality.
Here is a case in point. I have a good friend who is a manager of a large Jewish funeral home on the East coast. This firm has over a 100 year history of being the Jewish funeral home and is known throughout the United States. I took my friend to dinner in Manhattan one evening. In the course of conversation the issue of Jewish funerals came up, and my friend quickly shared this experience of reality which was happening in his very funeral home. He told the group that the greatest challenge to the future of Jewish funeral service was of all things inter-marriage between Jew and Gentile, and these unions in the next generation basically eliminated the firm connection that generations of Jewish families had towards this historically Jewish funeral home.
I asked my friend where he got this information from and he simply replied family surveys and random focus groups.
The information which is taken from such outside sources is indispensible for obtaining a true and realistic portrait of what is the state of the state of any funeral/cemetery operation. In fact the longer the survey the more accurate the information, and remember my friends when a negative survey comes in it means that 25 other people thought and/or experienced the same thing and said nothing – except to all their friends.
Surveys work. Focus groups work. Mystery shoppers work.
In tough economic times the two main expenses which are usually cut are advertising and training and education. While this is common business practice, the commonality of it does not equate into the practice being right or wise.
Training of the staff is essential to prepare for dealing with the future – they go hand in hand. Training of the staff improves what Dr. Deming called “invisible numbers.” You know things like being self-directed, autonomous, excited, dedicated, goal-oriented, practical common sense improvements. In bad economic times any business needs and should want this to happen instead of the opposite which actually can destroy morale, destroy loyalty, destroy commitment, destroy quality service, destroy, destroy, and destroy. Do we even need to give examples of this in recent United States business experience and history?
Training creates a new environment, an escape from the day to day. Training allows the staff to express deep feelings which are just as valuable to the future of the business as is any family survey and/or focus group. Training can be fun and entertaining.
In fact just last week, for the first time in my training career, I had an owner ask for a “fun” seminar. No doom and gloom, no end of the world FTC or OSGA stuff, no feat mongering, none of that old standard seminar stuff. This one was just light and fun. In fact I personally almost did not know how to begin because for 35 years most of the seminars I have presented appeared to be in the realm of funeral crisis management, when in reality the funeral profession chugged ahead in a mighty fine way with or without my deadly serious seminars.
The fun one however elicited laughter, giggling, shoulder poking, smiles, applause and a variety of real nice emails after the seminar was completed.
Training is basically the connection to the people, the vital people who make up the organization and in whose very breath the future of the organization rests upon. Possibly a funeral home/cemetery might survive without the umpteen thousand dollar Yellow Page ad very well, but without training – I personally would not take the risk. It is time and money well spent, for it all goes to people – our people.
Year End Tax Tips from Our Tax Service Partners
November 24, 2009
Johnson Consulting does not provide tax advice, but relies solely on the experience and expertise of:
Tax Services
As the year end approaches, now is the time to start planning for your 2009 income taxes. Conventional tax planning calls for deferring income into 2010 and accelerating tax deductions into 2009. However, these are anything but conventional economic times. With large federal deficits and an expanding federal debt, we see increased tax rates in the future. The only question is how high and when will these tax increases take effect. Much will depend on how the economy performs in 2010. If the economy continues to struggle in 2010, we feel that the tax cuts scheduled to expire at the end of 2010 will simply be allowed to expire. However, if the economy improves during 2010, we think that we could see increases as early as 2010.
Most taxpayers have thus far experienced lower taxable incomes in 2009. Many taxpayers have large capital losses generated in 2008 that are being carried over to 2009. Investment income in 2009 will most likely be lower. This means that for many taxpayers, their marginal tax rates will be lower in 2009 than they expect to have in 2010. Therefore, it may make sense this year to accelerate income into 2009 and defer deductions into 2010. When looking at any tax strategy, the alternative minimum tax should be considered.
On the estate tax front, the estate transfer tax is scheduled to expire at the end of 2009. We do not feel that Congress will allow this to occur. We think that the $3.5 million estate tax exemption and 45% tax rate in effect for 2009 will continue into 2010.
Taxpayers should remember to take advantage of the annual gift tax exclusion. The annual exclusion for 2009 and 2010 is $13,000 per donee. The exclusion applies to each donee. In addition, unlimited medical and educational gifts can be made on behalf of a donee provided the gift is paid directly to the medical provider or educational institution. Care should be taken when considering gifts made late in the calendar year. Time should be allowed for checks to clear the bank so that two years worth of gifts are not deemed to have been made in the same calendar year.
The one wild-card in the tax arena is health care overhaul legislation. Various health care plans have been proposed. We feel that some type of health care bill will be passed in 2009 or early 2010. It is still too early to determine how any new health care plan will be paid for and how this will impact tax rates.
If you have further questions, we would be glad to get you the answers…. Just give us a call
August 2009 Management Insights Newsletter
August 27, 2009
From the Chairman’s desk:
Welcome back. This will be a summer to remember. It has brought record high temperatures in the west and northwest and record low temperatures in the Midwest. The rain fall in the mid west has been way above average. July was a record month for the stock market. Our economy has shown some positive signs of recovery although we have a way to go. When we close the books on 2009, the year will be one for many record books.
Fortunately, we have been very busy this summer bringing on new clients for our Accounting, Tax Services, Management Services and M&A. We have two new services, Sales Analysis Program and Families Surveys that will be ready to introduce in Boston at the NFDA Convention. Our M&A activities have picked up considerably and we are experiencing good results working with the buyers and financial institutions.
We want to thank our hundreds of subscribers for giving us valuable feedback on how we can better serve you and the many of our subscribers that participated in the Survey we did in the last issue. Bill Bischoff has summarized the results and highlighted the answers to the two questions we asked.
What is the greatest challenge to your business?
What new products or services have you introduced that have achieved success?
We did not see any real surprises, but there is no doubt that the economy and the growth of cremation are a big concern to many. There appeared to be a high degree of pessimism in the responses. What was encouraging for us at JCG is the fact that we have been there with clients and we have helped them significantly improve their situation. We did some very interesting work with funeral homes that had these concerns, especially in the areas of account receivables, accounting, and improving their operational efficiencies.
Last month I wrote an article on this very subject which I want to share with you in this newsletter. Most firms that we talk with have some idea of what they need to do, but they just don’t know how to do it. And then, there are times when we do a thorough Performance Analysis, we both discovery that what we thought was needed was entirely different. The exciting thing is that the results have been excellent and we all had a lot of fun making the necessary improvements and bring more dollars to the bottom line.
See an excerpt of my article below
We hope you enjoy this issue. We feel we are making progress, in everything we do, as we strive for perfection. We sincerely appreciate all of your feedback.
Until next time… the best to you and your family.
Regards,
Tom Johnson
Chairman
We Value Your Opinion…
(Do to the tremendous response to the Industry Survey from the last newsletter, we are going to seek your opinion on various topics in the future, and we are usually looking for a response of just a few words.)
This months question:
* This summer our nation lost two very influential and trusted public figures, Walter Cronkite and Ted Kennedy. We ask you: Who, in your estimation, is the most influential living person in the funeral service industry today?
Click here to fill out the online form: Monthly Survey
http://www.johnsonconsulting.com/funeral-service-industry-survey/
Or simply press REPLY to this email and let us know.
When the right Improvements are made… the Worst of times can become the Best of times…
We have heard the expressions to determine if one is an optimist or a pessimist; ‘Is the glass half full or half empty?… If you have lemons you make lemonade …when the pessimists sell the optimists make money… and so on.’
Our economy is struggling, unemployment is at an all time high, businesses are closing their doors, banks have stopped lending, cremation is on the rise and families are becoming more conservative in selecting a funeral service. Does that mean the glass is half empty? I definitely do not think so …Well then – what do I think?
Funeral Service Industry Survey Results
Thank you to everyone who participated in the survey, to see the results to the following questions, please visit:
http://www.johnsonconsulting.com/survey-results-summer-2009
1. What is the greatest challenge to your business?
2. Has the death rate in your market area….
3. Do you see the current decline in the national death rate as a blip or a trend?
4. Have you had to lay-off employees?
5. Has your receivables increased?
6. Are traditional families choosing cremation or spending down on merchandise and services because of the current economic conditions?
7. Are Green Burials becoming a part of your service offerings?
8. What new products or services have you introduced this year that have achieved success?
9. Do you see Chinese caskets growing or declining in the USA?
10. Do you see Costco growing or getting out of the casket business?
11. Will other Big Box discounts enter the casket business?
12. Has your preneed sales suffered in this economy?
13. How do your preneed fulfillments compare to your current at need sales?
14. Where do you see your revenues in the next 5 years?
15. Does your firm have a succession plan in place
http://www.johnsonconsulting.com/survey-results-summer-2009
Exceeding our Client’s Expectations’:
Danville, VA. – Swicegood Funeral Home and Barker Funeral Home, both of Danville, VA, have been sold to a new firm managed by A.J. Daoud of Cox Needham Funeral Home in Pilot Mountain, NC. After operating the firms for many years after the death of his father, Turner Swicegood decided that it was time to find someone else to carry on the tradition of the firms.
Brooks Cowles of the Johnson Consulting Group represented Turner Swicegood in the transaction, which closed on August 3, 2009. Turner Swicegood says, “Brooks has advised me on various planning and estate matters for many years. When I decided to consider a sale, I knew that’s who I wanted to advise me. From advice on value, marketing and negotiation, Brooks and the team at the Johnson Consulting Group were there every step of the way, including finding the final buyer, who I had not previously known.”
As an experienced operator, with other locations nearby, A.J. Daoud plans to build on the traditions of these firms to continue as the market leader in Danville and Pittsylvania County. “I am excited about joining the Swicegood – Barker family and especially want to thank Brooks Cowles for seeing through a complex deal to conclusion.”
When the right Improvements are made… the Worst of times can become the Best of times…
August 27, 2009
We have heard the expressions to determine if one is an optimist or a pessimist; ‘Is the glass half full or half empty?… If you have lemons you make lemonade …when the pessimists sell the optimists make money… and so on.’
Our economy is struggling, unemployment is at an all time high, businesses are closing their doors, banks have stopped lending, cremation is on the rise and families are becoming more conservative in selecting a funeral service. Does that mean the glass is half empty? I definitely do not think so …Well then – what do I think?
There has never been a better time to be in funeral service than there is today. For those who are willing to take a hard look at their business processes and are willing to seek professional advice and willing to make the necessary changes to gain improvements in productivity the long term pay outs can be enormous. Now, if you don’t believe me, I will be glad to give you the names of the many optimists that we have worked with over the last few years.
Unfortunately, the expressions of doom and gloom are what I am hearing more and more these days from all sides of funeral service. The glass is definitely half empty in many camps. If we are not careful and if we don’t take a more positive approach to our current situation … I will guarantee you it will become a self fulfilling prophecy.
The methods and processes that need to be used are not ones that have been recently invented to meet the current business challenges. They are the basic principles that should be applied to every business in good times as well as challenging times. It is just a matter of applying them. It is as simple as that…
So what do we do? … Where do we start and how do we turn our current situation into lemonade. Let me start by sharing with you a statistic that I read recently. On average, 30% of the costs of doing business is tied to inefficiencies and employing non value-added processes in everyday business routines. I am sure this number does not apply to all funeral home businesses or you might be thinking that does not apply to my business.
But this much I can assure you: We are all creatures of habit and we gravitate to the routines where we are most comfortable. Associates and managers/owners perform like automations by repeating how they do things repeatedly until it becomes institutionalized in the daily operations of the business. The question is: “Why do you do it that way? … and the answer is: Yep! “Because we have always done it that way…
Where do we start …
My professional career started in the banking industry. Accounting, budgeting, expenses, revenues, margins, cash flow, and profits were my guides and indicators of how a business was performing. As I entered the funeral service industry, I applied my knowledge and experience to funeral home operations. When I became CEO of a large funeral home chain until today, where I own and operate 3 very successful funeral homes, there were certain principles that became standard operating procedures. They are the basics to managing any successful business.
Before I discuss making improvements to a funeral home’s operations, I want to stress the importance and value of employing a professional accounting firm that understands the funeral home’s business. In all candor, I have evaluated too many funeral homes’ businesses that had their accounting and tax work done by a local firm. They provide standard accounting principles, but the problem was they applied the same principles to all businesses they did accounting work.
The key is to have the right chart of accounts, breakdown the revenues by call and type funeral, have trend lines to compare months, quarters, years of revenues. Most accounting firms provide a report card. What you need is a management tool that pinpoints your strengths and focuses on areas to improve. Without that type of analysis and information, it may be difficult to find the right starting point. Then once identified: what does the business need to do to improve those areas.
Here is a conceptual model of how the Process works once the financial analysis has been completed:
My recent experience working with independent funeral homes has been enlighten, enjoyable and I, must say, very rewarding to see the changes we mutually agreed to do and how those changes contributed to significant increases in productivity, cost savings and profits. The most gratifying, through, was to see how the changes were accepted and embraced by the ownership, the management, and the staff. Families benefited the most, as evidenced by the feedback received from post service surveys. You do follow up surveys, don’t you? If not, you are missing a golden opportunity to get valuable feedback from the families you served.
Here are a few simple rules to follow when implementing change:
- Keep changes small and with ones that are fairly easy to make and have a high payoff. Achieve success out of the gate.
- Make sure you have buy in from all the members of the firm. Teamwork is key.
- Reward people for doing what you want done.
- People respect (do) what is inspected (measured) not what is expected.
- Encourage your associates to be innovative and come up with ways to improve in all areas of the business.
Every person on the planet sees things differently. There are six and a half billion of us and six and a half billion versions of reality and if you’re married you know what I am talking about…it’s the same with funeral homes and their owners and staff. Having open discussions, allowing for everyone’s input, gaining consensus and designing the improvement plan with 100% buy in and agreement to make the changes is paramount to achieving maximum success.
Focus on Consistency — building trust with each other and the families you serve — reaching out where it is needed — listening — going the extra mile — streamlining your processes – don’t be afraid to ask for help – all of these actions and interactions are necessary to instill a culture and a mindset that is passionate about being the best that you can be. It’s exciting, fun, very rewarding and puts your business in the top performing companies.
In my several decades of working in the funeral industry, I have seen and experienced a lot of change. The 80’s challenges became the 90’s opportunities. Where our economy is today will change for the better. It’s only a matter of time. There may be some pain in initiating change, but I can assure you, if the right changes are made the gains will be well worth the pain. It’s a matter of doing the right things and doing them right with consistency.
Survey Results Summer 2009
August 22, 2009
Please select which of the following applies to you:
2. Has the death rate in your market area…. 
3. Do you see the current decline in the national death rate as a blip or a trend? 
4. Have you had to lay-off employees? 
5. Has your receivables increased? 
6. Are traditional families choosing cremation or spending down on merchandise and services because of the current economic conditions? 
7. Are Green Burials becoming a part of your service offerings?
9. Do you see Chinese caskets growing or declining in the USA? 
10. Do you see Costco growing or getting out of the casket business? 
11. Will other Big Box discounts enter the casket business? 
12. Has your preneed sales suffered in this economy? 
13. How do your preneed fulfillments compare to your current at need sales? 
14. Where do you see your revenues in the next 5 years? 
15. Does your firm have a succession plan in place 
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What is the greatest challenge to your business?
Accounts Receivable
- The present economy has made it very difficult to get paid for the service
- Volume is good, receivables are way up
- Need help in training staff to get payment commitment at time of service
Traditional Services/Operations
- Creating new services that have more appeal
- Having to do more with less staff
- Treading away from traditional to cremation
- Families are only looking at costs
- Showing Value for what we do
- People want less calling hours, more chapel viewing and cemetery viewing
- In a traditional market, my cremation could go to 60% this year
- Where and when to start to improve overall operations
- Need to grow or sell
Staff Recruitment and Development
- Motivating the staff to deliver superior services
- Keeping good staff from leaving the industry
- Breaking old and bad habits
- How to recruit good and productive employees
- Paying a competitive wage with benefits
- Dealing with burn out, apathy and bad attitudes
- Hiring a good manager
Marketing
- Looking for new ways to generate revenues
- Staying ahead of competition
- Choosing a funeral solely on price
- Need to increase volume
- How to increase prices and stay competitive
- Pricing alternative services
- Communicating the value of the funeral to the community
- Merchandising services instead of caskets and vaults
- How the community perceives my services
Finances
- Refinancing my loans at today’s rates
- Increasing my profits by being more efficient
- Increasing my cash flow
- Getting financing to expand
Competition
- Hospice
- Low price providers
- Third party casket providers
- Community buildings and churches used for visitation
- Competitors using Chinese caskets
- Former staff opening a new funeral home in the community
Preneed
- Trusting any preneed provider
- Guarantee the future price
- Dealing with large shortfalls
- Generating leads
- Lower preneed sales compared to at need
- Keeping good counselors
What new products or services have you introduced this year that have achieved success?
Products and Services
- Offering more cremation packages
- Put in a viewing room for cremations
- Using cremation pallbearers for burials in cemetery
- Using “Life Stories” to celebrate a life
- Pet burials and cremation
- Green Burial Packages
- Did a market study of my community
- Graphic designed brochures
- In house tributes and slide shows
- On line videos
- Put in a new accounting system
- Kiosk in selection room to show more caskets
- Changed showroom to Chinese caskets
- Webcasting
- Memory portraits
- Aftercare services and using a survey to get feedback on services
- Personalized head panels
- Using a sales tracking system
- Paying incentives to arrangers
- Added a reception center
- Added a new collection program with good results
June 2009 Management Insights Newsletter
June 24, 2009
From the Chairman’s desk:
Welcome back! July is upon us and summer is officially here. Our economy is still fighting its way back but we have a long way to go to regain the confidence needed to get all segments on the same page, “Singing from the same hymnal”, as the saying goes. … But we do see signs of improvement.
Our government intervention in the main stays of our economy like banking, automotive and healthcare has certainly the potential to change the dynamics and the rules of the game. I will reserve my comments for a later issue.
What I read and learn from listening to individuals from all parts of our industry is that revenues are down in both the supplier and provider side of the business and the outlook for the immediate future is more uncertainty than optimism.
Here at Johnson Consulting, our Financing Division has seen first hand how the economy has impacted banks’ ability to finance or refinance funeral home businesses. In this issue, we have included an article on this very subject. We have identified the “Hurdles” that exist between the start and the finish line as to what is required and how to best prepare to jump over each one.
Unemployment is currently above 9% and is forecasted to exceed 10% before we begin to see a decline. Our industry is somewhat unique in the fact that our challenge is retaining mortuary school graduates. One mortuary school dean gave me a startling statistic a while back that over 80% of the graduates leave the profession after two years because of the long hours and weekend work requirements. Yet good well-qualified funeral directors are hard to find. We have also included an article in this issue on “Attracting Great Employees”.
Johnson Consulting is very privileged to have over a 1000 subscribers to our newsletter. Many are our industry’s “Thought leaders”. Bill Bischoff, the Editor of our newsletter, thought it would be interesting and insightful for us to send along a brief 15 question survey to get your thoughts and business perspectives on today’s economy and the impact it is having on your business. Our goal is to get a very high percentage return. We sincerely appreciate your response. You can be assured all responses will be kept confidential. We will write a summary report of the results and publish the findings in our next issue.
We want to call your attention to our newest program which we are featuring in this issue. It is a state of the art sales tracking and analysis system that will give you timely and vital information to best manage your business. The system will also provide you with a score card to see how your business compares to others in the industry.
In closing, we hope you enjoy this issue and we hope you will take the time to complete our survey. …Until next time “The best to you and your families…”
Regards,
Tom Johnson
Chairman
The 7 Hurdles to Funeral Home Financing
.. The hurdles may have been raised, but not insurmountable … It just takes a different approach …
Dating back to the Great Depression, banks have viewed funeral home businesses as low risk borrowers of money. Whether it was for renovating an existing funeral home, building a new location, or even purchasing an established business from another funeral director – banks always felt that lending to the funeral business was a safe bet.
Over the last two decades, the landscape of the “funeral business” changed. Mergers and Acquisitions went into over drive – with the likes of SCI, Loewen, Stewart, Carriage, and other private acquisition firms. PreNeed’s hyper-growth initially changed the future financial outlook of a firm and now may in some cases be seen as a liability. Now, with the current economy and tightened lending practices, the situation has heightened.
This isn’t meant to be all Doom and Gloom, but with a picture painted like that, how else would outsiders see our industry without our rose-colored glasses. Like it or not, we have to overcome the high lending hurdles that we helped erect. But there is hope…
If you are looking for financing for renovations, expansion or acquisitions, you will need to deal with each of these 7 lending challenges [hurdles] in a new and creative way. We can help you, as we have helped other clients come out on the winning side, with financing in hand! It’s all about the process, knowing what the banks are looking for and how to best present your case. A well thought out plan, carefully crafted with sound and factual data will greatly enhance your chances of securing that needed capital.
Johnson Consulting Group introduces an Industry First
Now you can have an essential and extremely valuable management tool that gives you up to date sales analysis on your business, both pre need fullfillments and at need, and how your business compares to others in the industry. It can also be used to track pre need sales mix and average sales as well.
This revolutionary system is all web-based and gives you 24/7 access. It provides accurate analysis and pinpoints your areas of strengths and weaknesses, gives you a trend line by month, quarter, year to date and last year’s results.
http://www.johnsonconsulting.com/survey-program/
Attracting Great Employees – Mark Jorgensen
-in 2009 it’s more challenging than ever before
Synopsis: Despite the economic downturn and widespread unemployment it’s still a “seller’s market” for those with experience in funeral service. Learn more about the challenges owners face and potential solutions for locating and hiring outstanding funeral directors and managers.
http://www.johnsonconsulting.com/attracting-great-employees-mark-jorgensen/
Exceeding Your Expectations:
Virginia Lorenzen, June 15th, 2009
Dear Mr. Johnson:
First of all thank you for sending me your letter of engagement so promptly…I also wanted to let you know that your valuation report was outstanding in helping me resolve many issues. Your report was invaluable and used by the Public Guardian attorneys and our CPA in establishing a value for the mortuary and the basis for trying to work out a settlement with the contingent beneficiaries. Opposing counsel accepted your report without any major disagreements. I am confident had I not had your report my team would not have been able to reach a suitable agreement…I believe you and your company’s work was outstanding and cannot express my appreciation and gratitude for your support. I especially appreciate my interaction with you and your staff. It has been a pleasure working with you.
Sincerely,
Lucille Lyon
Division Chief
http://www.johnsonconsulting.com/lucille-lyon-says/
Survey Program Announcement
June 24, 2009
Johnson Consulting Group introduces an Industry First
Now you can have an essential and extremely valuable management tool that gives you up to date sales analysis on your business, both pre need fulfillments and at need, and how your business compares to others in the industry. It can also be used to track pre need sales mix and average sales as well.
See Larger Images Below
This revolutionary system is all web-based and gives you 24/7 access. It provides accurate analysis and pinpoints your areas of strengths and weaknesses, gives you a trend line by month, quarter, year to date and last year’s results.
Here are just some of the features:
- Sales analysis by:
1. Case types (as many case types as you want to track)
2. Arranger
3. location
4. Company - Includes:
1. Bar graphs
2. Comparisons
3. Easy to read and interpret - Compare your sales performance against all JCG clients, particular groups you may have (such as your study group) or geographical regions
This exclusive program is completely automated and ready to start for your company or location(s) today!
Benefits:
- Everybody has surveys, however this survey was designed with continuous improvement at the funeral home in mind. We pinpoint any issues, as well as positive trends, which enhances management’s ability to positively affect change and recognized excellent performance.
- Website based with individual client logins (company and/or location logins)
- Run your own reports whenever you wish to see how you are doing.
- Use them for meetings and bonus programs (JCG can provide the bonus program if you choose)
- Easy to start up and very low cost compared to the value received
Call or email us for a demo today!
Johnson Consulting Group
“A Total Solutions Company”
Mergers & Acquisitions · Valuations · Accounting · Management Services · Financing
8095 North 85th Way · Scottsdale, AZ 85258 · Phone 888.250.7747 · Fax 480.556.8501
www.JohnsonConsulting.com
Click on image for larger size
Attracting Great Employees – Mark Jorgensen
June 24, 2009
Attracting Great Employees
—in 2009 it’s more challenging than ever before
Synopsis: Despite the economic downturn and widespread unemployment it’s still a “seller’s market” for those with experience in funeral service. Learn more about the challenges owners face and potential solutions for locating and hiring outstanding funeral directors and managers.
By Mark Jorgensen, President
Global Recruiters of Batesville, Indiana
A barrage of headlines assaults us daily about declining business and rising unemployment in our global economy. Local media detail layoffs and job eliminations across a wide array of industries as unemployment rolls grow weekly. From all indications, it’s a “buyer’s market” for skilled, professional talent–except perhaps in the funeral service and cemetery professions.
In my daily conversations with funeral home owners and managers across the country I continue to hear that finding qualified, experienced funeral directors is one of the most vexing challenges. Simply stated, the supply of great candidates isn’t keeping pace with growing demand. So while thousands of folks may be looking for work each week attractive job opportunities in funeral service go unfilled, often for months at a time.
In this profession there’s no “magic bullet” solution for those looking to hire. If you’re seeking someone from outside your immediate market area a major consideration will now be relocation. During the past six months, increasing numbers of qualified candidates are expressing reluctance to sell their homes below market value and then venture into the mortgage market for that next house in the new community.
Careers of spouses and significant others pose a similar challenge during relocation. Those with marketable skills and experience, who may have easily obtained employment in 2008, are likely faced with a longer, more difficult search in 2009. That may mean deferring or even eliminating the possibility of that household’s much needed second income.
In view of these challenges, it’s a good time to reevaluate your “value offering” to prospective employees. While your balance sheet may not allow you to exceed a set amount in terms of base salary, hiring that next funeral director will likely require some creativity. You may consider some of the following tactics that have worked successfully for others not only in attracting employees, but keeping them on the team long term:
- Financial incentives- Greater earning potential through a bonus program that is funded when individual or company objectives are achieved. Structured correctly, it will guarantee you increased revenue sufficient to fund those bonuses while increasing total compensation to a valued employee;
- Non-cash incentives- For many “time” is valued as highly as a few more dollars– a more generous vacation plan, an extra day off every 2nd or 3rd weekend, rotations on night coverage or flexible scheduling to allow for participation in leisure or children’s activities or to be the caregiver for aging parents;
- Spouse/significant other assistance- Leveraging your extensive network in the community to identify referrals for job opportunities for that spouse or significant other who may be unfamiliar with your area. Your efforts here signal a strong commitment to the whole family in navigating through the career transition.
Of course the ultimate challenge for both parties in the hiring process is the time it requires out of your demanding schedule. You can’t be actively recruiting when families in need step into your funeral home seeking your help on a moment’s notice. Being short staffed only exacerbates that problem.
On the candidate side, the outstanding funeral director you’re looking for is likely to be actively employed and serving families in another community. She or he is probably too busy to be posting a resume on career websites. In fact, some of the best candidates may not even have a current resume.
That’s where the services of a professional recruiting and search firm like mine come into the equation. Unlike some staffing firms that simply harvest resumes of the unemployed and forward them to your inbox, our firm engages in “direct sourcing.” Working from the largest database of any company in our profession, we reach out to funeral service and cemetery professionals across the country to seek first person recommendations. We’re then able to identify, screen, interview and conduct reference checks before we brief you on the candidate’s qualifications for your specific job opportunity.
The old truism, “Time is money,” is appropriately applied to professional recruitment. While your time is focused on running your business we work in parallel to bring you outstanding candidates. By taking time (and chance) out of the process, a search firm can play a vital role in your continued success and be money well spent as good people become ever more difficult to find.
Mark Jorgensen owns and operates Global Recruiters of Batesville, Indiana, a recruiting and search firm specializing in funeral service and cemetery professions. Mark’s career has spanned thirty years of senior level sales and marketing positions. He has spent thirteen of those years in the funeral service industry in senior level management positions at The Forethought Group. There he was Vice President and General Manager.
Global Recruiters of Batesville
374 Northside Drive, Suite A
Batesville, IN 47006
(812) 932-1290 Office
(812) 932-1292 Fax
mjorgensen@grnbatesville.com
www.grnbatesville.com
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