In our second Industry Spotlight, we want to highlight the Pet Business. Why would someone want to take their education from mortuary school and their investment in a funeral business and go into the pet funeral/cremation business? Well, for many in urban and suburban communities, it is a great adjunct to your human funeral business.
Did you know:
85 million families (that is about two out of every three families in the US own a pet)
63 million families own at least one dog
65% of all pet owners are either Gen X or Older
The average lifespan of a dog or cat is seven years or less
Pet ownership in the US during the pandemic is rising across all age groups
95% of pet owners think of them as family members
45% of American pet owners buy their pet’s birthday presents
Based upon those numbers, when these pets die, what do urban or suburban pet parents do with their deceased furry family member?
There were almost 1.5 million pet cremations per year
There are about 1,000 pet crematories
That means the average pet crematory does about 1,500 pet cremations per year. With an average price of about $250 that is about $375,000 in revenue, but other than the fuel cost, that is all Gross Profit!
When a pet crematory is valued on its own, it might sell for about three times EBITDA. When a pet crematory is part of a human funeral business, it will be valued at the same multiple as the human business. Therefore, it might be valued at five to eight times EBITDA.
For most pet crematories the labor is a modest cost, unlike funeral service. Pet staffing is not licensed. The retort operator might be certified as a crematory operator but not necessarily. The pet business has three options for cremation:
Commingled: All pets are cremated together and if you want cremated remains returned to you, it will be a part of the entire group. This is the least expensive option.
Segregated: Several pets are cremated in the retort at the same time but may be separated by bricks so the return of cremated remains will be primarily your pet but there is some incidental commingling. This is more expensive than Commingled.
Private: Your pet is the only one being cremated. This is the most expensive option.
Most pet crematories offer their service based upon the weight of the animal. It might be a minimum rate for all pets and then a premium per pound or a premium by weight groups. This will be factored against the Commingled, Segregated or Private choice for the cremation.
The pet business exposes you to many families much earlier than the family might otherwise meet with you to choose a human funeral director. As our colleague John T. McQueen says, “If I do a good job with Fluffy, I am going to get the chance with the human family”.
The pet business is not “purrfect”, but it gives you a barking chance at expanding your income and marketshare.