The Coronavirus pandemic has had a significant impact on the global economic environment. This unprecedented public health crisis has challenged social and cultural norms, and disrupted operations for small businesses and large corporations alike. Funeral homes have been some of the hardest hit of all, with funeral employees working overtime to provide services while maintaining the high level of customer care that families expect.

It is not easy to sustain a funeral business during a pandemic, but several initiatives and resources have been developed to help make things a little easier for funeral homes in these challenging times. Here are five essential tips for funeral home owners that are worth considering:

Take Full Advantage of COVID-19 Relief Programs

The U.S. Government has developed various COVID-19 relief programs and stimulus offerings to help businesses navigate the unique challenges brought on by the virus outbreak. Funeral providers should take full advantage of this assistance to maintain their firm’s economic position. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted at the end of March 2020, offers several benefits for funeral home owners:

  • Paycheck Protection Program (PPP) loans – a PPP loan provides cash to funeral home owners who maintain payroll and keep their staff employed during the coronavirus emergency.
  • Debt relief programs – the CARES Act includes economic injury disaster loans and emergency grants, as well as immediate relief for small businesses with non-disaster Small Business Administration (SBA) loans for six months.
  • Expanded bonus depreciation provisions – funeral homes can now accelerate depreciation on certain interior improvements such as drywall replacement or electrical and plumbing upgrades – which is a tax savings opportunity that should not be ignored.

The Funeral Service Foundation has also launched a COVID-19 Crisis Response Fund to provide grants for organizations providing funeral services and grief resources for families mourning the loss of a loved one due to Coronavirus.

Maintain Healthy Cash Flow

Maintaining a positive cash flow position is a key component of any company’s financial plan. In this unusual environment, funeral home owners should carefully evaluate their cash position to ensure they can effectively cover any short-term obligations. Tracking the inflows and outflows of cash in your business allows you to address material fluctuations and forecast future cash needs, which can be a make-or-break issue in the current economic climate. Due to this, funeral providers should carefully manage their cash reserves and explore options for access to additional cash if necessary.

Be Proactive with Sales Mix Adjustments

The COVID-19 crisis has led to atypical adjustments in the “normal” funeral home sales mix.  Social distancing guidelines, viewings and full traditional services have been replaced with livestreamed funerals and small graveside ceremonies. In addition, some funeral homes are experiencing a decline in cases while others are struggling to keep up with the rising demand. If changes to your sales mix are negatively affecting margins, consider making proactive adjustments to your funeral products and services to ensure your business stays healthy after the pandemic is over.

Stay Up to Date with Financial Reporting

In this crisis environment, timely and accurate financial reporting is more important than ever before. Don’t delay your monthly reporting process no matter how busy you get with daily tasks — it is crucial to have a clear understanding of your numbers. Additionally, if considering applying for any type of aid under the CARES ACT, keeping track of your business expenses is a requirement of the program. Therefore, your funeral home accounting system should enable you to evaluate your business activities and outcomes against prior year results and assess financial statement variances against budget projections. Holding true to a fiscal plan is a good way to achieve profitability and growth targets, even in these extraordinary times.

Use Industry-Specific Benchmarks for Analysis

When it comes to business management, you must use the right tools to get the job done correctly. For an accurate analysis of how well your funeral home matches up against other competitors, using industry-specific benchmark tools is the best way forward. Our team at Johnson Consulting Group (JCG) has worked with hundreds of funeral businesses across the country, providing strategic solutions and compiling large amounts of financial data to establish benchmark targets for funeral homes. Our JCG database offers an in-depth look at your funeral home’s performance vs. similar firms, as well as realistic reference points for strategic planning. In this crisis, knowing your overall position is key to forging a path forward after the pandemic is over.

We are the largest broker in the funeral industry, with seasoned experts ready to offer practical guidance on how to cope with the disruptive challenges caused by the Coronavirus pandemic. To learn more about our services, please contact us for a personalized consultation today.

 

 

Start planning for the future in just 3 minutes