For funeral homes, increased value means you can expand your services, hire more employees, and more effectively serve your community. Increased value also means more financial gain when it’s time to sell.
Here are some surefire ways to increase the value of your funeral business.
1. Get an Annual Valuation
Often seen as a requisite step for selling a funeral home, valuations should actually be performed every year. Doing this will not only simplify your taxes, but will also form the foundation of your strategic planning. By obtaining a professional funeral home valuation––as opposed to relying on estimates or gut feelings––you can begin to determine where your business stands in relation to your goals and how to best move forward.
How It Helps Improve Your Funeral Home’s Value
While a valuation doesn’t inherently improve the value of your funeral home, it provides you the clarity you need to grow your business. If you plan to expand your business, for example, a valuation will also be necessary to attract investors and financing.
By obtaining a yearly professional valuation, you can track your progress over time and make sure that you’re reaching your goals.
2. Conduct an Annual SWOT Analysis
In addition to learning the value of your funeral home, you’ll also want to conduct an annual SWOT analysis before implementing strategic changes. To conduct a SWOT analysis, you’ll have to consider each of these as they apply to your business:
- Strengths: Areas in which your funeral home currently excels.
- Weaknesses: Aspects of your business that stand to grow or improve.
- Opportunities: Factors, internal and external, that could cause your business to grow.
- Threats: Factors, internal and external, that could harm your business.
How It Helps Improve Your Funeral Home’s Value
By conducting a thorough SWOT analysis, your funeral home can better understand its current performance and how this stands to change over time––both positively and negatively. When performed properly, this type of examination can help you seize opportunities and mitigate risks while maintaining optimal performance.
3. Implement Incentive Compensation Plans
Incentive compensation plans tie an employee’s earnings to products sold, the success of their team, or the overall success of the business. In the death care business, this could take several forms, including:
- Offering commission based on each sale.
- Providing a bonus for soliciting a certain percentage of feedback from families.
- Providing company-wide raises when revenue goals are met.
How It Helps Improve Your Funeral Home’s Value
Even the most driven employees can benefit from some extra motivation, and this is the core ideology behind incentive compensation. By rewarding the performance of your employees, you’ll not only encourage behavior that boosts your bottom line, but you’ll also increase their workplace satisfaction.
Moreover, when it comes time to sell your funeral home, having a high-performing team will make your business a more compelling buy.
4. Create Clear and Concise Cash Flow Reports
Carefully tracking cash movement through your business is a crucial performance indicator. That’s why it’s important to create accurate budgets, organize your financial statements through an accounting system, and potentially hire a dedicated accountant.
How It Helps Improve Your Funeral Home’s Value
Diligent cash flow management provides you the clarity you need to keep your funeral home profitable. By understanding each of your business’s cash inflows and outflows, you can more effectively monitor changes and fluctuations in your financial picture.
This becomes even more important when planning to sell as a disorganized financial picture is a surefire way to turn off interested buyers.
5. Build Community Partnerships
Like fire departments or public schools, funeral homes provide an essential service to the communities they serve. That’s why it’s important to develop partnerships with other businesses. Not only does this help get your name out there, but it also enshrines a degree of trust with families.
How It Helps Improve Your Funeral Home’s Value
Community partnerships help your bottom line in two main ways. Transactional partnerships––for example, with a local florist or crematorium––allow you to secure mutually beneficial deals on frequently needed services. Alternatively, there are less formal partnerships that serve to enhance your funeral home’s reach. Leading a workshop at a senior care community or hosting a fundraiser with a local Lions chapter will boost your reputation and inform your community of the services you offer.
6. Focus on Preneed Sales
If you haven’t developed an effective preneed strategy for your funeral home, then now is the time to start. By training your employees to sell pre-arranged services, you can develop a sales funnel that positively impacts your business both in the present and future.
How It Helps Improve Your Funeral Home’s Value
Preneed impacts value because it demonstrates the market share of your funeral home. A fleshed-out portfolio of preneed sales indicates that your funeral home will have continued business down the line, and it also speaks to the efficacy of your sales team––both of which make your funeral home a more appealing purchase.
7. Hire Funeral Home Experts
Naturally, every funeral director wants to maximize the value of their business; however, achieving this is neither simple nor linear. Making matters more difficult, you can’t lose touch with the day-to-day tasks of running your funeral home. If you’re unsure of how to most effectively boost the value of your funeral home, then it might be best to call in some expert help.
How It Helps Improve Your Funeral Home’s Value
A skilled funeral home consultant can holistically examine each aspect of your business, from employees and services to your greater positioning in the death care industry. From this observation, they can suggest strategic initiatives and even provide you with the scaffolding to achieve them.
At Johnson Consulting Group, our team of death care consultants has experience owning, operating, and selling funeral homes of all sizes. With our expert knowledge of the death care industry, we can create a growth strategy that allows your funeral home to appreciate in value over time.
INCREASE YOUR VALUE