In this industry spotlight, we want to highlight key insights into business succession.
Every business will be sold or liquidated someday. Given the choice, sold is usually much better. Today there are about 19,000 funeral homes in the United States. This is down from about 21,000, only 20 years ago. To understand business succession metrics, you need to understand the following:
We lost these businesses as active businesses because three dynamics:
Of the remaining 19,000 funeral homes they serve about 2.8 million death calls in a non-pandemic year meaning the average funeral home serves about 150 families a year. This group is divided up between (approximately):
The marketplace is quite dysfunctional with this many various owners. The average age of a funeral homeowner is assumed to be between 55 and 60 years old. The average funeral home is valued (business and real estate) at about $1.8 million. That totals about $28.8 Billion in total enterprise value of the privately owned locations. Based upon the age means that 100% of the $28.8 Billion will change hands over the next 20 years or about $1 billion of value a year.
Who is going to buy these businesses?
What is certain is that current owners, regardless of whether they have identified their buyers or not, need:
What is equally certain is that the people assuming they are going to be the succession need:
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