Small town funeral homes. . . going concerns, satellites, or gone?

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Woodstock Music Festival 1969

Last week as I was perusing death care articles for future stories an interesting name popped up and I dived in to learn more about what was happening.   The name was “Woodstock” and the article pertained to developers trying to maneuver a way to purchase what had now become the last funeral home property in Woodstock, New York, and get that purchased zoned correctly to operate a hotel on the premises.

To those of you who are my age or older, you will remember the community of Woodstock, New York, as the proposed host for the Woodstock Music Festival in August of 1969.  The festival was eventually held about 60 miles away (you can read why here) but the community of Woodstock has continued to be associated with the iconic three day music festival.

While the name “Woodstock” originally piqued my interest, it was the articles that I read in the Woodstock area Daily Freeman paper that held my interest.  As you can see from this Wikipedia entry, Woodstock-the center of a rural community- had a population of 5,884 people in the 2010 census.  However, the funeral home property in question for this development had been the last operating funeral home in the community and was now closed.  To be honest, there had been some unique circumstances in the closure such as the operating funeral director passing away in 2019.  However, the end result is the same. . . . a community of almost 6,000 people with no operating funeral home.

Here is one of those articles.

If you go to the funeral home website, that you can access here, you will see that the funeral home announces a merger with a two-branch funeral home with its branches located to both the west and east of Woodstock.  It would be all speculation on my part to guess if that funeral home bought the existing funeral home sans the real estate, but it did make my mind wander about the question, “How many calls does a funeral home need to be profitable in 2021?”

America has had a pretty consistent death rate of about 8 people per thousand dying, albeit higher in small communities with a population skewed to older ages.  Here’s an article on the 2020 death rate spike.

So, a community like Woodstock with 5,884 people would be expected to have about 48 deaths.   Let’s assume that half of those deaths have complete funerals with burials and the price for each of those is $10,000.  That would bring in $240,000 in gross revenue (24 x $10k).  And, the other 50% were some sort of cremation with an average mixed revenue of $3500 per case.  That would bring in $84,000 in gross revenue.  So, that is a total of $324,ooo in gross revenue.

Depending on what the funeral homes margins are, I would look at that number and surmise that it is more than likely that is a profitable number for a one person operation, but the trends are that there are less people who want to be in one person operations and that a higher percentage of cremations will follow over time.  Those trends, if correct,  would tend to reduce revenues and increase expenses over time.  And, its no secret that reduced revenues and increased expenses will obliterate profits over a time period.

It’s also no secret that communities the size of Woodstock, in general, are losing population to those communities I call Regional Centers (30,000 or more in population) and to large urban centers.

Are we coming up on the time when small town, individual operated funeral businesses will no longer be part of the American landscape?  The people in those communities will need death care, but will their funeral home be one in a larger city outside of their small community?  Or, will a larger city funeral home offer a satellite location in these small towns?  Market forces will eventually make that decision and if it eventually goes the way I see it trending, then small town America will be losing one of its most respected and historic locally-owned businesses along Main Street . . .  and that will be a great loss not only for the profession, but for small communities in general.

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One Comment

  1. I completely agree with your observations. But I think your income numbers are very generous. $10,000 average on a full service funeral is probably about $2000 too much. And my guess would be that there will be direct cremation companies nearby that would market to the community at $1095 or there about resulting is less cremation income too. So the Gross income will be more like $250,000 or less which is not enough cash to make the business viable, even for a single man operation. And a Satellite operation would also be a stretch to make it work. More rooftops mean more headaches. It’s unfortunate but small town funeral homes may disappear just like hometown hardware stores.

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