For many funeral home and cemetery owners, selling the business is a milestone event. Whatever the reasons are for wanting to sell, it’s never an easy decision and the entire process from start to finish can take months, or even years. A lot of planning, preparation, and communication is required in order to achieve a successful sale. If you’re getting ready to sell your funeral or cemetery business, here’s what you need to know.
There’s no way to accurately predict how long it takes to sell a funeral or cemetery business – the average time on market before final sale depends on a variety of factors including the size of the company, asking price, number of interested buyers, and market competition.
The best way to prepare is to start the process early as there are multiple steps involved and each one takes time, for example, you will likely need to get a business valuation, a property appraisal, and there may be legal issues to iron out. Plan ahead to avoid making rash decisions and be realistic about economic or financial impacts that may affect the timeline.
Get a Professional Valuation
A valuation is essential to knowing how much your funeral or cemetery business is worth. A business valuation analyses all aspects of the company to determine the economic fair value, which in turn provides a firm understanding of how to set the right selling price. Getting a professional valuation allows you to objectively measure all the hard work that’s gone into building your business and establishing goodwill with your families and your community..
An in-depth evaluation of your financial, operational, and managerial practices can also identify areas of improvement to work on before putting your business on the market. Small updates and enhancements implemented before a sale can boost the overall value of your cemetery or funeral home.
Organize Your Financials
It goes without saying that having detailed financial statements is a must when it comes to selling a business. Organize all your accounting records, especially the profit and loss (P&L), balance sheet, and cash flow statements. Most buyers and lenders will want to see at least three years’ worth of financial accounts and asset/liability records to get a clear picture of the monetary “ins and outs” of your funeral home/cemetery.
Other examples of important paperwork to collect include real estate documents, legal records, call volume reports, vendor/partner agreements, and a current list of employee compensation details. Review all the accounts carefully, and get a second opinion from an industry broker or consultant to identify potential issues. Think about what you as a buyer would want to see, then get everything ready and organized beforehand. Your records should clearly illustrate the investment potential of your business.
Communicate with Your Team
Employees are the essence of a funeral home or cemetery business, so it’s important to communicate your sales plans to them as soon as is reasonably possible. Buyers appreciate having a good team in place to continue running the business after the sale – this lowers their overall risk as long-term employees are key to maintaining productivity and preserving the company’s reputation. Keeping your team in the loop when you’re planning to sell the business also helps with morale. Make it a point to have honest conversations early and often, and elaborate on the details and timing to limit uncertainty.
Life after the Deal
Finding the right buyer and getting the maximum value for your funeral/cemetery business usually takes precedence when you decide to sell, but don’t forget about what comes afterwards. Think about life after the deal – will you want to remain involved in the business in some capacity, e.g., as a consultant or part-time employee? What if you don’t like the way the way the company is being managed? A buyer with money but no experience can ruin your legacy – what should do you if you experience a case of “seller’s remorse?”
Selling a funeral home or cemetery isn’t just about the numbers. Plan in advance for potential feelings of regret and emotional adjustment after the sale is final. If your whole life was invested in the business, you will need time to adjust to a new reality and find a way to move forward.
Partner with an Expert
Finding the right partner is crucial to the successful sale of your funeral or cemetery business. Johnson Consulting Group (JCG) is the largest broker in the funeral industry, and we’ve helped thousands of funeral homes and cemeteries get the highest value for their business. We specialize in funeral industry mergers and acquisitions and manage an extensive funeral home and cemetery buyer list.
Our experts offer personalized solutions and targeted advice to help you evaluate all the options and ultimately make the right decision for you and your family. To learn more about our funeral/cemetery business services, please contact us today for a free business valuation quote.