In the wake of the pandemic, the funeral industry is experiencing unprecedented change. Once a business in which you could rely solely on reputation and relationships, death care is now seeing rising cremation rates, a preference for “green” burials, and the increased popularity of alternative celebrations of life.
That’s why it’s important to stay on top of these trends, allowing your funeral business to flourish in both the present and future. Luckily, staying relevant doesn’t mean splurging on a new cremation facility. Instead, consider these small actionable tips that will ultimately set your business on a course for success.
1. Get an Annual Valuation
Valuations are often associated with selling a business, but they should be done annually. The reason for this is awareness. It’s important to always have an idea of where your business stands in terms of value.
Getting a valuation will not only help you prepare for retirement and simplify your taxes, but it also gives you the hard truth about where your business stands. While a low valuation might not meet your expectations, it can point you toward the types of changes you need to make in order to reach your ideal value.
While there are several quick ways to obtain a valuation, the most common method for funeral homes is multiple analysis. By doubling your revenue or multiplying your cash flow by five, you’ll start to get a rough idea of what your business is worth. Alternatively, you could consider hiring a professional to conduct the valuation for a more nuanced number.
2. Create and Update a SWOT Analysis
Used in all lines of work, a SWOT analysis helps you determine where your business is currently situated and how it stands to move––both positively and negatively. When it comes to planning, a SWOT analysis is a great place to start.
The acronym SWOT includes four components:
- Strengths: This field refers to any exceptional aspects of the business that separate it from the competition. Loyal families, specialized services, and strong preneed portfolios could all be strengths.
- Weaknesses: Any current shortcomings of a funeral home. High employee turnover, outdated facilities, or declining revenues, for example could all be considered weaknesses.
- Opportunities: Opportunities refer to any external factors that could give your funeral home a competitive advantage. This could refer to a growing population, a shuttered competitor, or increased interest in your services.
- Threats: Contrasting with opportunities, threats consist of external factors that might harm your business. For example, weakened supply chains or a lack of suitable employees might pose threats for a funeral home.
Similar to a valuation, a SWOT analysis should be conducted on a yearly basis, giving you a clearer picture of where your business stands and how to proceed.
3. Focus on Preneed
When determining the value of a funeral home, few variables impact this total as much as your preneed sales. An extensive backlog of preneed sales indicates both loyalty to your business and a promise of future prospects.
If your preneed program is currently lacking, then devoting more effort to this avenue is a surefire way to increase the value of your funeral home. To increase your preneed sales, consider the following strategies:
- Tactfully touch on preneed offerings as part of your after care.
- Network with hospice organizations, nursing homes, and other community players to help spread the word about the importance of pre-arranged services.
- Train your sales team in pitching preneed services to families.
4. Make Aesthetic Changes
Other than a phone call, the first touchpoint for families comes when they enter your property. Because of this, you’ll want to be sure that your grounds, facilities, and decor are tidy, comfortable, and aesthetically appealing. Instead of spending tens of thousands on new french oak floors, consider making frequent small changes.
Lighting fixtures, curtains, rugs, and furniture can all be swapped out affordably. And while aesthetic preferences vary by location and individual, the key is to convey a professional and current quality. Update cheaply and gradually, rather than performing one expensive overhaul every ten years.
5. Get Expert Advice
Although funeral homes all help families honor their loved ones, each business serves different communities, exists in different environments, and thus faces different challenges. If you can’t see an obvious route through which to boost your funeral home’s value, then you might consider calling on some outside help from consultants.
At Johnson Consulting Group, one of the nation’s largest death care agencies, we have a team that understands all that goes into running a funeral home. Comprised of funeral directors, managers and owners, the JCG team can expertly analyze a funeral home and not only identify growth opportunities but also help create plans to execute them. Additionally, our team of accountants and funeral home brokers can also conduct an independent valuation of your funeral home.
For funeral directors, it’s important to understand where your business is going and how you’ll get there. For both needs, the experts at Johnson Consulting Group can help.BUILD YOUR BUSINESS VALUE