Finance Column Collection

In the last generation or so, the funeral industry has lost more than 2,000 funeral home rooftops – from about 22,000 to just under 20,000. How many more are on the brink of going under in the next decade? This month, I offer my assessment of why funeral home businesses die. Charles Darwin is well regarded as a naturalist and biologist, but his thought-provoking propositions dealing with evolution do not just apply to zoology. I believe they equally apply to economic matters. When it is too easy for people to make lots of money, a Darwinian “economic pall” will occur so that only the best and brightest can dominate the business landscape. In short, I think businesses must “migrate, mutate or die.” Some think prejudicially that cremation is a factor in funeral home failures. I disagree. Cremation is only the […]

The chemistry of funeral service is changing dramatically and I fear the profession is at the point of crossing the Rubicon, i.e., the point of no return. Funeral providers currently face declining funeral gathering rates, meaning they won’t need (and might not be able to afford) their 10,000-plus-square-foot buildings. Thus, the average revenue per call is declining because when a family doesn’t hold a gathering before the disposition, some five points of sale are eliminated from your general price list. Funeral service today is just that, a service. For you youngsters, prior to the early 1980s and the issuance of the Funeral Rule by the Federal Trade Commission, funeral homes were in the merchandise business. They sold the casket and all the other services – embalming, facility use, livery, etc. – were pretty much included in the price of the […]

Part One During the past five decades of my career, I’ve had to learn the funeral service profession’s key performance indicators. (We cool geeks just say KPI.) Many of them I had to disprove. Many I had to segregate based on operating factors. Many of them I had to defend from stupid but assertive people. This month, I will try to influence you to follow these KPI as of 2023 and for the foreseeable future. First, you need to know what a KPI is and why we, as business operators, use them. A key performance indicator is a uniformly accepted analysis point that helps you run your business. These analysis points usually involve a computation of at least two key points of operation. For example, dividing revenue by total cases results in a well-known KPI called average revenue per call. […]

Funeral home owners and staff, for the most part, are technophobic. Despite this, every reason exists for them to embrace and effectively use technology to improve both their business and their customer service. So, I beseech you to either embrace it or hire some 17-year-old kid to do it for you. Funeral service has always hated technology, however. The last technology this profession universally adopted was gravity! Cremation remained a limited service before we could automate a crematory. The first manually operated cremation in the 1880s actually took three days to complete. Even with the automation of the modern retort, a few fires still destroy the crematory, and sometimes the building, each year. Another technology – the telephone – helped save time but, most importantly, gave way to the answering service. Why? Because nothing costs funeral homes more money than […]