Sometimes what seems like the obvious isn’t always the best.  Yesterday we wrote about trying to bring the volume of your services number to a larger number and how that could help by reducing your costs per service.  One way we suggested doing that was by an acquisition in the same geographic area of your existing firm.

Another way to increase volume, without the costs and commitment of an acquisition, is by establishing a facility in another part of town or in a close proximity community that you did not have a presence in before.  Until that new unit provides a foundational stable volume count it is possible that you could service it from your existing location to hold costs down.

We have seen this done many times in what we call Greater Minnesota where I live.  However, sometimes it is done not without great consequences in the case where the firm did not draw a minimum stable volume to support the move.  Many times the reason was not that the firm did not draw clientele.  We have seen a new firm draw clientele but  not cash flow simply because of the high costs that were put into a new facility.   When that happens, it not only puts the new facility in financial jeopardy, but your existing business as well.

If I was to put in a new location in an adjoining community I would look for a building on the market that I could possibly remodel into a funeral facility as compared to building new.  I would not necessarily buy the building but would look to lease for about 5 years with two five year options, giving me a total of 15 years to build my clientele without the risk of building and financing a single purpose mortuary building.  If things don’t look promising in five, ten, or even fifteen years of effort, I can then walk away with no residual costs.  Yes, there would have been operational costs as I tried to establish this location, but going forward there would be no costs for an empty building.

I thought of today’s article after I read this article in Business News Wales.  The article pertains to the Coles Funeral Directors and their purchase of a closing Barclay Bank building they are using to open a new location.  My guess is that by buying and remodeling, Coles Funeral Directors will have a new location at a lot less cost than acquiring land and building a new building.

I’ve seen old bank buildings, grocery stores, and even churches turned into some really nice death care facilities.

So, while it is not always the perfect solution, if you are looking for another location to add volume, don’t rule out the idea of purchasing an existing building and remodeling or of leasing and remodeling.  Sometimes, thinking outside of the box like this will not only allow you to get in at a lower cost, but also give you options into the future.

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