Last month, I provided a postmortem of the most common causes leading to the death of a funeral business. Here, I share a few thoughts on eulogizing those firms.
Funeral directors are mission-driven people, not profit-driven people. Just as a church can fail if its revenue does not exceed its expenses, so, too, can a funeral home. Unlike other for-profit businesses, funeral providers cannot generate more revenue by advertising or somehow “stimulating” business. At-need services cannot be driven.
The death of many iconic businesses can be tied to technology. Do funeral homes face the same risk? Big-box retailers were hurt by technology, for example, and Amazon is now the independent-business killer that Walmart was accused of being 30 years ago. That said, Amazon can’t even deliver caskets in a timely manner, so I doubt it could handle cremation very well if it tried.
Anyway, once the autopsy is complete, then it is time to write the eulogy. You have probably written hundreds or even thousands of them for your patrons but never for a business. I have. When a business dies, it does not get buried – it gets liquidated, usually under the supervision of the U.S. Bankruptcy Court in its district. And while human deaths bring mourners together, business deaths cause only bankruptcy and credit lawyers to assemble.
Whether for a life or a business, however, the eulogy is essentially the same. It includes a date of birth, a date of death and, of course, that most famous component of a eulogy – the dash. “The Dash” is a poem made famous by poet Linda Ellis. In case you’re unfamiliar with this literary delight, Ellis focuses on the “dash” engraved on a headstone between the birth and death dates. She suggests that what the dash represents is a person’s lifetime and how he or she expressed it. (This is one of my favorite poems, by the way, along with Robert Service’s poem, “The Cremation of Sam McGee.” Do you see a theme here?)
Your business eulogy will have a dash separating the date of its creation and the date of its liquidation. That dash will represent all the days you, and perhaps previous generations, tried to carve out a place for your business. Indirectly, it also covers the families you served, the employees you employed, the businesses you supported with your patronage and the community that you might have educated.
Yet in spite of your patronage, staffing and community benevolence, your business will still cease to exist someday. All businesses will cease to exist. Of the more than 20,000 funeral homes presently, only two can fight it out as “continuously operated” since the mid-1700s: Kirk and Nice in Philadelphia, Pennsylvania, and Bucktrout of Williamsburg in Williamsburg, Virginia. All other firms have either written their dash or are still living within that dash.
During my lengthy career, many long-heritage businesses have died. While your first reaction might be that they were put out of business by a large national operator, you would be wrong! In fact, I don’t think I have ever seen that. I have seen national operators lose market share to local, privately owned businesses, but never have I seen a national operator take business away from a privately owned firm. Usually, the death of a long-heritage business is due to the failing of its present owner.
I have seen two or more large national companies compete with each other, but usually this is a combo-operation fight to the finish, along the lines of Gorgo Vs. Godzilla. It usually takes place in large markets as well, not suburban or rural business locations. Moreover, just being big does not postpone the advent of a business death. In the past 25 years, we have seen large businesses cease, such as Loewen, Stewart, Prime Succession and others. We have also seen the three largest casket companies sold. Again, size does not protect a company from dying in funeral service or in any other business.
Meanwhile, private, family-owned businesses have their succession hurdles to overcome. The math of private-business succession focuses on the factor of 30%, which means that the chance that a business passes from generation one to generation two is 30%.
Next, the odds of that business transferring to the following generation is 30%.
In other words, if you start with 1,000 first-generation businesses that then transfer to the next generation, by the time you reach the fifth generation, only eight of those initial 1,000 would probably still be owned within the founding family.
In the 1970s, we learned that personal and corporate goodwill can be transferred, and since then, more than 10,000 funeral homes have been sold to new owners at least once! Even those two long-running funeral homes I mentioned are no longer in the same family as their founders. One was acquired by national operators and the other is run by a regional consolidator. I like to think that these businesses, as well as other long-heritage businesses, are still living within their dash right now.
Depending on the age of inception of your business, the phrase “casket maker,” “carpenter” or “livery service” might be within your dash. This tells me that providing for the dead was not the first objective of your original business. Nonetheless, it is now the greatest consumer identification of your brand.
For some now-dead businesses, the owners/managers made decisions that led to those deaths at some point during their dash. In most cases, the owner at the time failed to do the right thing, such as not moving the business even though the families the firm served had moved.
I grew up in Philadelphia, and around the time of my 13th birthday, as part of my bar mitzvah, my father took me to the site of his bar mitzvah. The community had changed by then, however, and as he pulled up in front of an African Methodist Episcopal church, he said, “This is where I was bar mitzvahed.”
I thought he was joking until I looked at the engraving above the church doors – Hebrew! This was a synagogue when it was built, but as the Jewish population moved to the suburbs, leaders of this congregation sold the building and relocated.
Similarly, I have seen some funeral homes successfully reposition themselves as the families they served moved. That takes guts to accomplish.
Cremation has been a big fear among funeral licensees during my career. Funeral home managers throughout the 1980s and ’90s did not embrace this growing “fad.” As I have said many times, the question is not “Why has cremation grown so fast?” but rather, “How did whole-body burials survive for as long as they did?”
Unfortunately, funeral home managers during the past 50 years reacted improperly to the growth of cremation. They thought it was a matter of price, when in reality it was a matter of value. Consumers rejected spending large sums of money for a casket that, in their minds, was only “used” for a few days. Once buried, the casket’s use is to protect the body and not to make a statement for the mourners. Those that failed to adapt to the cremation consumer’s needs or, worse, allowed themselves to hold onto the casket sale mindset probably reflect on their dash right about now.
Do you remember when ophthalmologists performed vision testing and then sold their patients glasses? Back then, the service provider was in charge. At some point, eyeglass stores started hiring ophthalmologists, so the retailers oversaw the relationship with consumers. Could this happen in funeral service? Ah, it already has!
The purpose of every funeral service is to get the body where it must go and get the living to where they should go. Even if your company’s DNA involves a livery barn, it doesn’t mean you should feature cars on your website. Likewise, your previous generation’s carpentry skills don’t mean you should print “Casket Salesman” on your business card.
Many more business eulogies will be written because owners focus on their buildings while failing to offer quality service within those buildings. What will you do differently if high-end hotels start offering their food, buildings and services directly to consumers for end-of-life gatherings?
When a business dies, the eulogy is usually the same and consumers say three predictable things: 1. They were good people; 2. They helped me in my time of need; and 3. I wonder what happened?
Every business will die someday. Mine has now passed into its second generation and it’s wonderful what this next (non-family) generation has done. I wish two things for each of you present business owners. First, I hope your dash reflects a long time between your business inception and its death. Second, I hope its passing does not happen on your watch.