Selling a funeral home: What holds an owner back?

June 28, 2023/Business/

Back in mid-May Funeral Director Daily published this article entitled “Thinking of an ownership transition? Here’s some straight-forward advice on getting started”. It was an article predicated on advice from the folks at accounting and business strategy experts Clifton Larson Allen (CLA).

We recently noticed another article from the people at CLA entitled, “What’s Really Holding you Back? 4 obstacles to a peaceful business transition”. You can read that article here.

I’ve sold my funeral home business and over the years I started some other businesses, almost all of which I have exited by this time. At 65-years old I don’t want the day-to-day responsibilities of operating a business with employees, real estate, regulations, and other parameters. Outside of operating Funeral Director Daily, I’m very happy to simply be a minority partner or stockholder in businesses today.

What was common with each business I sold is that I had to create a plan to do so. Most of the time that plan included knowing why I wanted to sell the business and that could be as varied as “too little” money for the effort or “too much” work (even if I’m being financially rewarded), or even “the future may not be as good as the past” so let’s liquidate and not worry about that issue.

However, even when I knew I wanted to sell or exit a business I seemed to “drag my feet” for awhile in getting started. I think that is just human nature. As a matter of fact, I run 2 1/2 miles six days a week and once I get going on the jog I do pretty well. . . . . There is, however, a commonality between my daily run and selling a business. That is, “the first step always seems to be the hardest”.

Tom Anderson
Funeral Director Daily

We’ve heard now for about a decade that many funeral homes will be in ownership transition at this time or soon. That mainly stems from the fact that so many funeral homes are owned by those who are between 55 and 70 years of age and the percentage of children following their parents footsteps into the business has been declining over the years. Couple that with the pandemic experience and the seemingly difficult times in finding great employees and you can see why there is that belief about upcoming transitions.

So, it would seem that opportunities will abound for local, regional, and national operators to take a look at greatly expanding their networks. Of course, they have their metrics on geography, size of operations, and profitability that they will be looking at. Your firm may fit those criteria but even if it doesn’t don’t forget your local competitors as potential suitors.

What does Clifton Larson Allen see as issues that might hold you back from moving forward and taking that “first step”. They say the following four items get business owners stuck from moving forward as they ponder their future without funeral service.

Will I have enough money?
Will my business be okay?
Will my family be okay?
Will I be okay?

Those are all valid questions and questions that an owner should get answered and feel good about before moving forward. In my case those questions were part of a “fluid transition” in which I didn’t know if I would have enough money until I knew an approximate value of my business. . . . As you move forward in finding answers, by taking that first step, the future seems to become clearer on what needs to be done or not done.

I’ve had instances when I found some answers and then decided it was not the time to sell. But, I would not have known my situation if I had not taken that first-step. So, like running, it is the first-step that is probably the key step.

If you are an owner looking into transitioning from ownership to sale of a property in the next couple of years, make sure you get an expert on your side when you take that first-step. The people at Johnson Consulting Group were able to help me answer many of the questions that were holding me back a little. You can learn more about Johnson Consulting Group here.

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