Finance Column Collection

March 29, 2022

Finance 301: Chapter 3: A Preneed Game Plan

In last month’s column, I outlined the questions you must address for preneed to serve as a positive part of your business and planning. As noted at the end of that article, I intend to answer those many questions in this month’s article, so please, read on. Today, between 20% and 30% of the average funeral home’s annual calls originate from preneed. Now, if you thought that one person in your community would account for 20% to 30% of all your calls in a given year, would you be cavalier about the financial status of this person? Of course not. You would want to know their net worth, their ability to pay in the future, etc. The concept of preneed involves getting consumers to make advance directives, thereby informing their loved ones and the funeral home of the services and […]
February 24, 2022

Finance 301: Chapter 2: A Preneed Overview

My Knowledge Transfer Plan Chapter 2: A Preneed Overview The first large-scale speech I gave at an NFDA convention was in Orlando in the 1980s. In the room next to me was an industry “expert” whose presentation denounced the use of funeral directors as salespeople and asserted that preneed was an inferior way of promoting funeral home services. From then until 2019, preneed sales rose in almost every category you can look at it. Overall number of contracts sold by the profession increased at least 300% during that 40-year period. The annual number of preneed contracts served increased almost 500%, and the backlog of preneed contracts as “inventory” for future service by any funeral home also increased by at least 100%. In other words, the presenter in the room next door had been wrong. Despite the onset of the pandemic, […]
January 26, 2022

Finance 301: Chapter 1: The Future is Cremation

My Knowledge Transfer Plan Chapter 1: The future is cremation Two issues ago, I turned 68 years old. I mention this because I feel I bear a responsibility to this profession, one that has allowed me to build a company and serve more than 3,000 of its members during my career. While I have written more than 500 articles and four books covering many topics, I now want to systematically share all I have learned for the benefit of the next generation of business owners. I call this my Knowledge Transfer Plan (KTP). We human beings know we are not immortal, and I do not want to take any more knowledge with me to the grave than reasonable. (Yes, I will be buried.) With that said, please note that this column is now called “Finance 301.” This is the graduate-level […]
December 20, 2021

Chapter Twelve: The Economics of Preneed Theft

Competition is good, but theft by deceit and unfair business practices is anti-competitive. Sadly, the words “preneed” and “theft” can go hand in hand. I’ve seen people steal preneed deposits, falsify insurance claims and fail to make deposits into various trusts. These people, of course, are crooks. The thing is, they themselves would tell you they are crooks and knew they were breaking the law. There are others, however, who could be stealing preneed funds, but these individuals don’t think they’re doing anything wrong. They even commit their misdeed in the open, and if caught, will not be prosecuted. Who commits these nefarious acts, you ask? Some employees, when they leave a place of employment, choose to co-opt confidential business property and goodwill, then use it to try to convince consumers to move their established preneed arrangements to another funeral […]
November 22, 2021

Chapter Eleven: Protecting Your Investment

Estimating case count during/after a pandemic. Creating and implementing a strategic plan starts with estimating your revenue. While calculating revenue involves a simple formula, estimating it during a pandemic is very difficult. More on that later in the article. So, as I said, revenue involves a simple formula, R = C x $, in which revenue equals calls multiplied by $ or average dollars/call. For example, if you expect to serve 100 families annually and your average dollars/call is $6,000, then your revenue will be $600,000. Now, during normal, non-pandemic times, you would need to make two basic assumptions to calculate your revenue: Normal Assumption 1: Upon how many calls should I build my budget? Most people use a three-year average, while others look for trends up or down and make a pro forma estimate based on those trends. I […]
Call Now Button