Business Reality Check: When Waiting Costs More Than Selling

Marty Blackwood, age 75, had spent his life doing what few others could: running a small-town funeral home operation in the rural South nearly single-handedly. A lifelong servant of his community, Marty had built a reputation as both dependable and deeply personal in his care for families. Over the years he had expanded his single location into a three-rooftop business. Together his funeral homes served just over 100 families a year, a manageable volume for decades, but now the demands of middle-of-the-night calls and increasingly complex operations were wearing him down.

Marty knew it was time to plan his exit. The challenge was understanding what his business was actually worth.

One of his longtime advisors suggested a $2.5 million valuation, a number that sounded good, perhaps too good. The business produced about $300,000 in annual cash flow, meaning that figure represented an 8.3x multiple, a valuation level more suited for much larger businesses, urban markets or strategic rollups, not a multi-rooftop funeral home in a rural community.

When Foresight was engaged to perform a professional valuation, our analysis brought expectations back to market reality. Based on normalized performance, local demographics, and knowing there would be a limited buyer pool, we estimated the business’s fair market value between $1.7 million and $2.0 million.

Though disappointed, Marty agreed to move forward with marketing at that range, hoping that a buyer might stretch toward the upper end or even surpass it.

The Market Speaks

Initial outreach generated some solid interest. A few regional operators and several locally owned funeral homes reviewed the opportunity, but only one came forward with a serious offer: $1.8 million, squarely within the expected range and at a fair multiple for the size and risk profile of the business.

But Marty hesitated. The number didn’t sit right. After all, he had been told not long ago that the business could be worth $2.5 million. Convinced that the right buyer simply hadn’t been found yet, Marty opted to keep the business on the market, reaching out to more and more potential acquirers over the following months. The problem: most of them said no, and while time passed, so did performance.

When Performance Slips, So Does Value

As months turned into nearly a year, Marty’s workload didn’t get any lighter. His health and energy waned, and with no licensed staff beneath him, the day-to-day operations began to suffer. Call volume dipped, overhead crept up, their presence in the community slowly started to diminish, and the financial picture changed.

When new financials were provided to buyers, the business was now generating about $225,000 in annual cash flow, a 25% decline from just a year earlier. That shift fundamentally altered the math and how any buyer would look at this opportunity.

The $1.8 million offer was withdrawn. The best new offer on the table was $1.5 million, representing roughly the same earnings multiple but on a smaller base.

At that point, Marty recognized the reality: the business wasn’t going to rebound under his management, and further delay could mean further decline. After allowing even more time to pass, he ultimately accepted the $1.5 million offer and moved forward with the sale.

Lesson 1: Valuation is a Market, Not a Wish

Business owners often hear numbers from well-meaning advisors that don’t align with market evidence. Valuation isn’t based on sentiment or service reputation alone; it’s grounded in cash flow, risk profile, and buyer appetite.

In Marty’s case, $2.5 million simply wasn’t supportable. A business serving 100 calls per year in a rural market has limited scalability and thus will not have as many buyers that may be interested. The gap between what an owner hopes to get and what the market will pay can be wide, and time spent chasing the higher number can erode real value.

Lesson 2: Time is the Enemy of Aging Operations

Once Marty declined the first offer, the clock started ticking. Every additional month meant more wear on him and his business; this coupled with the turn in owner health had the business struggling to perform. The decline in call volume and operational efficiency directly reduced the company’s value.

In many small business sales, especially owner-operated funeral homes, the owner is the business. When that owner slows down, so does revenue. Buyers see that risk immediately, and it translates to lower offers or no offers at all.

Lesson 3: The First Fair Offer May Be the Best One

In a healthy market with multiple suitors, turning down an early offer can make sense. But in rural death care markets, buyer pools are narrow. An offer at fair market value, particularly one aligned with independent appraisal, is often the best available outcome.

The regret in Marty’s story isn’t that he sold for $1.5 million. It’s that he could have sold for $1.8 million when the business was stronger and waited too long trying to chase an unrealistic price.

The Final Outcome: A Respectful Exit, a Hard Lesson

Marty ultimately closed his sale at $1.5 million, meaning a reduction in 16% below the first legitimate offer representing more than a quarter million dollars under the number he once could have achieved. The transaction provided him the ability to retire and step away from the daily strain, but it came with a valuable, but painful, lesson.

Key Takeaways for Funeral Home Owners

1. Know your real market value early. Independent valuations grounded in cash flow, operational performance, and buyer dynamics are your best compass, not hearsay or emotion. It is important to have someone with experience perform your valuation.
2. Don’t wait for perfect timing. If you’re aging out of the business, delay only accelerates decline. Value fades faster than most owners expect and often happens quickly once you’ve mentally decided to transition out.
3. Act when interest is genuine. A fair, market-supported offer is worth far more than a speculative higher number that never materializes. Remember, that offer you received years ago may not have any relevance in today’s environment.
4. Plan before exhaustion sets in. Successor recruitment, staff development, and advisor engagement should start years, not months, before you plan to sell. If you are in a situation where you a sole operator, take the time to make the business as turnkey as possible for someone new to take over.
5. Understand that multiples follow performance. When profits slip, even if multiples stay the same, total enterprise value falls.

Closing Reflection

Marty’s story is a reminder that timing and realism define successful exits. He didn’t fail; he achieved what many owners never do, he transitioned out of his business, preserved his community’s trust, and ensured continuity for the families he had served for decades. Yet his experience underscores a truth that every funeral home owner eventually faces: the market rewards preparedness, not procrastination.

Had Marty acted when the opportunity first presented itself, he could have exited on stronger terms, both financially and personally. Instead, like many owners who wait for “one more good year,” he learned that value fades quietly when energy, performance, and buyer enthusiasm begin to slip.

For funeral home owners nearing retirement, the takeaway is simple: the best deal isn’t the highest number, it’s the one that lets you walk away with confidence, dignity, and peace of mind. Knowing when to say “yes” can be the most strategic decision you ever make.