Business, Finance

A rise in case counts — Jake Johnson on how that can impact funeral home value

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Editor’s Note:  A recent article that we published on the increasing United States death rate brought commentary from Jake Johnson of Funeral Director Daily sponsor Johnson Consulting Group.  Here’s Jake’s take on what increasing death rates may mean to your funeral home:

A recent article by Funeral Director Daily was published on the national death rate in the U.S., with the expectation of climbing and no signs of normalizing soon. According to the Trustees of the Social Security and Medicare programs, “The federal government expects U.S. mortality rates to be elevated by 15% over pre-pandemic norms in 2021 and not return to normal until 2023.”  Another article also mentions that between 613,000 and 783,000 more Americans have died than would have been expected in a pre-Covid pandemic world. So, what does this mean for the death care profession? Elevated case counts.

A rise in case counts can greatly impact the value of a funeral home or cemetery business. For instance, a common occurrence is being understaffed when they are busy and overstaffed when they are not. As an owner, it’s easy to think that your experienced staff can handle a large call volume, and when slower times come there is room for flexibility and creativity. When call volumes start to pick up and the staff begin to be stretched too thin, a natural instinct would be to hire more people. But what positions? How can your business manage the elevated case count? By keeping a business understaffed you risk the inevitable burnout, resulting in lackluster customer service and employee buy-in.

When a funeral home and/or cemetery owner chooses not to invest in their employees, their business can be jeopardized. When employees experience burnout due to being understaffed, ultimately customer service suffers, leading to average sales failing and negatively impacting their bottom line. Not only can high case counts and understaffing affect the operational side of business, but it can also be a mirror to the risks a potential buyer will see.

Jake Johnson
Johnson Consulting Group

If a funeral home or cemetery business is being bought or acquired by a new owner, there can be concerns with customer attrition, key influences within the business, or even whether the new owner has plans to slow down and take a hands-off approach. Typically, the buyer has a game plan in how they will systematically put processes in place that could distribute that load of the previous owner’s work among the staff. It’s hard to grow a funeral business, so when you look at death case counts to be elevated through 2021 and beyond, the case count could help you weather the “transitional time” storm.

When a business is busy, that creates confidence among the staff and community. It helps mitigate risk for the buyers. Having a strategic plan in place is important. The good news is there’s no way a new owner can do everything themselves. The funeral home and cemetery businesses need their employees, and it’s important for buyers to assess operations and challenges within the business in order to run a successful company through times of low and  high call volume.  As a new owner, it’s important to know if the previous owner kept up with call volume and staffing needs. How was the previous owner marketing the business? How about customer surveying? Did the previous owner survey during times of elevated call volumes?

It’s not a stretch to say we are going to see elevated case counts through 2023, in fact, it seems certain. There will also be an uptick in families coming in at-need that have no previous planning experience. We need to make sure you are ready to handle that call volume. Enter Johnson Consulting Group. We can help your company thrive from the top down. Whether it’s assessing your operational needs and business value or helping you buy or sell a funeral home or cemetery business, it’s crucial to have a plan in place to take action rather than become reactive.

Through our combination of business broker services, consulting, financial management, and advanced tracking metrics, we have the expertise and the flexibility to help any funeral business grow, or plan for your exit strategy. Reach out to a member of Johnson Consulting Group today to learn more.

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