Do you know how much your funeral or cemetery business is worth? A business valuation is the best way to answer this all-encompassing question. The valuation can be used for many purposes such as determining your baseline value, estate planning, succession planning and more. A professional valuation typically involves an in-depth analysis of various economic and financial factors to determine the true value of your business. The valuation process can be described as both an art and science, but the final product is invaluable.
As a funeral home or cemetery business owner, it might seem like a complicated and time-consuming exercise to invest in a professional business valuation on an annual basis. However, the results are well-worth the time and effort involved, and can help define a clear path towards growth and profitability for your company.
Johnson Consulting has helped thousands of funeral home and cemetery professionals achieve success, and we firmly believe that an annual business valuation is usually the first step towards driving positive results and improving your company’s competitive position. Here are our Top 5 reasons why you should get a business valuation every year:
Enhance Strategic Planning
Strategic planning is an integral part of effective business management and is especially important to the long-term viability of funeral and cemetery companies. Using estimates or relying on “gut feelings” can lead to costly operational missteps — a professional valuation provides real-time data and analysis to help you establish a business strategy and determine what operational actions are necessary to achieve your goals.
Maximize Sale Potential
Having a clear understanding of what your funeral or cemetery business is worth is crucial to evaluating sale options. Not only does a business valuation compare your firm to local competitors, it also reveals your position in comparison to the overall industry standings (utilizing benchmarks for expense accounts on your financial statements). Understanding where the profitability of your business falls, as compared to other operations, can assist in determining where improvements can be made now that will assist in maximizing your value when you’re ready to sell. This knowledge allows you to accurately assess potential purchase offers and maximize your bargaining power.
Attract Investment
Potential investors need to know how much your company is worth before they put any money into it, and a professional valuation offers an objective determination of where to put their investment dollars. In addition, if your strategic plan requires outside financing, you will need a current evaluation to demonstrate the financial health of your funeral/cemetery business.
Succession Planning
Many funeral and cemetery businesses are passed down to family members or company employees, which can be a major challenge for both the seller and the buyer. A business valuation provides a clear value range that is fair to both parties, allowing the family members to determine a win-win situation moving forward. When the true value of the business is pre-established, it can help reduce conflict and assist with a smooth transition for all parties involved.
Simplify Taxes
The IRS levies specific taxes for significant business events such as mergers and acquisitions or share distributions. The total tax amount often depends on a company’s valuation, so a comprehensive review based on current financials and market capital could result in a lower tax bill for your funeral or cemetery business.
At Johnson Consulting Group, we work hard to provide our clients with accurate valuations that objectively measure all of the hard work that they have put into their funeral/cemetery business. Our experts evaluate your operational and managerial practices, analyze your company’s current and historical financial and case trends,as well as your market demographics, which provides a complete profile that determines how much your business is worth. Tom Antram, one of our valued customers from French Funerals & Cremations, said it best: “Johnson Consulting has helped our team stay in tune with our value as an organization. We feel that we have a solid value of our business and with this knowledge, will lead our business to even higher levels of growth.”
If you are a funeral or cemetery professional interested in knowing where your business has been, where it stands today, and what the future holds, please contact Johnson Consulting Group for a free business valuation quote today.