brooks-cowlesSuccession planning for your business really is like a puzzle in many ways.  For one, there are many pieces that have to fit together.  Depending on your view, it can look impossibly confusing or deceptively simple.  The fact is, just the basic elements present in every plan, including valuation, structure and documentation, present many challenges.  Succession planning for funeral home owners has changed a lot over the last several years.  Most established businesses still have excellent prospects to provide the owner and their family with a secure future.  And there are many capable purchasers out there.  Most of their last names are not “Inc.” or “Group” or “International” anymore.  But overly-high values are a thing of the past, and financing is almost always an issue.  Legal skills and local market knowledge have become more important than ever.  Too many owners decide they are ready to transfer and then get a painful and expensive education in reality.  Here are a few tips:

  • Understand what your firm is worth and why.  Have realistic expectations, but don’t accept less than you expect without good reason.
  • Screen potential purchasers.  Want to sell for all or even part cash?  You need a buyer with investable cash equal to not less than 15% of the total purchase price, at a minimum.
  • Understand the role of real estate.  Real estate value is critical today in structuring and financing a deal.  Consider a lease.
  • Ask your attorney or accountant whether industry specific expertise would be helpful.  Many professionals welcome a team member with experience and expertise in funeral home transfers.
  • Give yourself adequate time to make good decisions.  Generally, if you are older than 50, you need to at least have an outline of your thoughts and options.  If you are older than 60, you need specific identification of possible successors, which should be communicated to family and advisors.  After that, getting started is up to you.
  • EVERY OWNER SHOULD HAVE A VALUATION CONDUCTED AT LEAST EVERY 5 YEARS.

Get Ready for Summit 2021 March 1-4.