The common held belief in the funeral and cremation services business is that people will always need death care professionals to execute the lawful disposition of the deceased.  However, another trend that has been taking place over the past ten years is that a larger percentage of the client families that you serve will be opting out of any organized funeral or memorial service conducted or staged by the disposition funeral home.

Many families are just choosing not to have a service and many others are looking to their churches or other organization to help with that service that used to be the exclusive domain of the funeral home.

So, you really enjoy being in the business, but as more client families choose less services you can see revenue eroding from your establishment and you have less margin dollars to operate the business.  You still want to provide 24-hour service and be able to employ others so that you, as the funeral home owner, are not the 24-hour workaholic.  What is the answer you are looking for?

One thing you can do is raise prices on the services that you continue to be called for.  That is probably a short-term solution however, because as you raise prices you may invite other competition to come into the market or allow current competition to undercut you to pick off your price conscious clientele, leading to even worse problems.

Many proprietors of funeral homes own one location and can easily see cremation, and especially direct cremation, growing as a percentage of your services and cutting into the more profitable full service funerals that helped you raise dollar margin.

If that describes you, you have either two choices.  You can cut costs to remedy the situation or you can expand to try to grow the situation.  Expansion, through acquisition, can be very profitable if you look to your neighboring vicitinity to purchase funeral homes where you can then  combine costs.

Think of it.  Where there was once two businesses operating and having two different people on call, you now can have one person on call.  If the media areas are the same you can combine advertising costs.  If you can eventually combine under one name and be in a small enough geographic area, you can sell a property and combine all plant expenses.  This is exactly how Pierce Brothers Mortuary built a powerhouse in Los Angeles in the 1960s and 1970s. . . . they purchased adjoining neghborhood mortuaries one at a time.

So often when revenue goes down the first thing to look at is cutting costs.  Maybe a better way is to look at the situation and see if you can grow the revenue rather than cutting costs.

If there are mortuaries near yours that have an owner near retirement age or you know the business is losing revenue maybe it is time to talk to that person and see if there is a way to grow out.  The death care business is worth keeping and expanding if you enjoy the work.  Don’t just let less revenue get you down. . . . find a profitable solution.

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