Finance Column Collection

August 25, 2022

Finance 301: Chapter 8: Recruiting and Retaining Talent

Nothing is worse for a columnist, especially one in the darkening days of his career, than to repeat himself or herself endlessly. If you do that, you become the print version of that elderly uncle who tells you for the seventh time in two days the same story from his glory days. I use “uncle” instead of being gender neutral or defaming an aunt because men tend to live in the past more than the fairer sex. When an elder female family member wants to belabor a point, she just reminds you that she already told you something, averts her eyes and goes back to her mah-jongg tiles. Anyway, as that aging uncle, I won’t remind you that your profession must rebuild funeral service licensure and education for the future. (See my previous columns for discussions on that.) I will […]
July 24, 2022

Finance 301: Chapter 7: Gender, Race and Funeral Professionals

I have seen many changes in the funeral service profession during my career. Some of these changes created challenges to the business plan with which funeral directors were indoctrinated, such as cremation and funerals without merchandise. Some involved operating trials, such as the rise of price-focused competitors. Others arise from cultural challenges that have changed the consumer’s paradigm, such as natural burial, alkaline hydrolysis and other new-fangled horticultural burial offerings. Any/all of these factors could change the future of funeral service by impairing your profit. There is one change moving along at full speed, however, that could be part of the future in a positive way: the rise of women and minorities coming into this business. The single largest problem the funeral service profession must deal with is who is going to serve families. I love that technology now allows […]
June 26, 2022

Finance 301: Chapter 6: The Truth About Compensation

The single largest cost of running a funeral home comprises salaries, benefits and employment taxes. Together, they make up employee compensation. In the 1980s, when some casket companies spent $250,000 on their NFDA booth build-out and another million dollars on an extravagant cocktail party during the convention, the cost of goods was about 20% to 25% of revenue while compensation typically ranged from 26% to 40%. Yep, you could eat and drink for free in those days thanks to the casket companies, but the people paid to run the businesses were getting the bulk of the revenue! As noted above, compensation consists of three key components: Salaries This includes those you employ, full and part time, licensed or non-licensed, as well as any third parties you pay to supplement your staff for removals and body prep. It also includes the […]
May 29, 2022

Finance 301: Chapter 5: Estate Planning and Business Succession

I got my start in the financial services world by selling life insurance across the kitchen table to young families. Once, as I met with a 20-something couple, the husband told me it was ironic we were meeting because they had just found out the day before that his wife was pregnant. Sensing an opportunity, I immediately started to explain a family life insurance policy that offered coverage on the husband, the wife and any and all children once they were born. The premium was $25/month, however, which was a lot of money for a young couple in 1980. The husband said, “We will probably wait on this until the baby is born.” In hindsight, I now understand why my reply caused them to evict me from their home: “Why wait? Do you want to see if you like the […]
April 28, 2022

Finance 301: Chapter 4: Pricing Considerations

As I attempt to transfer the knowledge I’ve learned over five decades in funeral service, I find I must ask questions as often as I answer them. Q1: Why is it important to set prices accurately? That sounds like a childlike question, but the way this profession sets prices would be an insult to most fifth graders. In 1985, the Federal Trade Commission (FTC) forced funeral homes to change from a “package pricing model” (the family buys the merchandise and everything else is thrown in) to an “itemized service fee and merchandise-pricing model.” This caused owners to start by guessing how to allocate their fees on the 16 Funeral Rule-required itemized goods and services to account for the loss in revenue caused by dropping the markup on merchandise from about five times to roughly two times. To make matters worse, […]
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