If you have followed my articles for any length of time you know that I enjoy business and the many facets that enter into being a profitable company.  I like to think I know the funeral home business pretty well as I operated my own funeral home for 33 years creating budgets that lead to increased profitability almost every single year.

However, I also have had the opportunity to be involved in other businesses in either an ownership capacity or board member capacity and I enjoyed putting together the puzzle that led to profitability in those businesses too.  I’ve owned businesses in the college sports tournament and travel business, the insurance business, the commercial real estate business, the residential real estate business, a minor league pro sports franchise, and have served on boards in the banking, health care, and land grant university realms.  I also enjoy mentoring, encouraging, and even helping finance young business entrepreneurs striking out on their own.  And, I’ve learned that there are a lot of business strategies that you learn in one endeavor that can easily be transferred to another business endeavor.

And, so it goes with a couple of articles that I read in the Minneapolis Star Tribune over the weekend.

The first article deals with your banking relationship.  It’s imperative that you have a good banking relationship at all times because when you really need a bank, you don’t want to be at the bank’s mercy for acceptance.  You want to have built up a relationship of trust prior to getting to that point.  This article deals with how some smaller Minnesota banks used the Payroll Protection Program to solidify their relationships with businesses who were maybe seen as too small for some of the big banks.

Quite frankly, back in about 2009 I felt a little unloved by one of the big banks and sought out a smaller bank.  I couldn’t have been happier with the results and I still continue to use the bank into my retirement.  If the big guys jack you around, don’t be afraid to look for a smaller bank to deal with who appreciates you as a customer.

Article:  PPP work helped Minnesota’s community banks gain ground on the bigger banks.

The second article deals with mergers and acquisitions making companies very big. . . and questions what is too big?  It’s an interesting question when you think of the death care industry.  We have a couple of big companies that dominate the casket business in Aurora and Batesville probably making up over 75% of the casket market.  However, there is a lot of smaller regional players that pull in a good share of the market in their specific regions to keep those big companies in check.

The retail funeral business also has public companies Service Corporation International, Carriage Services, Park Lawn Corporation, and StoneMor that make up, from our research, slightly over 20%, and growing, of all funeral homes in the country. That’s no where near the casket company domination or what the article tells us about other industries such as the oriented strand board (OSB) better known as basic lumber where the top two companies control 44% of the United States market.

The large funeral companies do, however, have a larger percentage of the business in certain major metropolitan areas.  And, it is an interesting conundrum because sharing costs such as staffing and fleets can bring down the cost of business and can lead to lower prices for the death care consumer.  Until, other firms have been driven out by the competition and then the monopoly firm can raise prices that are damaging to the consumer.

Did you hear the news from Amazon last week?  They are now going to be establishing bricks and mortar stores.  Interestingly, their web business has driven many of those stores out of business and now they plan to fill that void left by those businesses leaving.  Create the vacuum. . . then backfill . . . . will Amazon get too big?  Will dominant metropolitan funeral homes or successful web based cremation start-ups aim to do the same?

Article:  Time we ask if the big companies are getting a little too big. 

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