As Benjamin Franklin once said, “In this world, nothing is certain but death and taxes,” so if you’re looking to enter a profession, funeral homes (or accounting) might seem like a lucrative choice.
But with large conglomerates buying up many funeral businesses that were once owned by families, aspiring funeral directors must ask the question: Is owning a funeral home profitable?
Is Owning a Funeral Home a Profitable Business?
As with any business, owning a funeral home can be profitable, provided you practice good business habits. Death care is also considered a recession-proof profession, as funeral home spending remains relatively constant even during times of economic downturn.
To harken back to Benjamin Franklin’s quote, people are always in need of ways to honor the passing of their loved ones. While the exact preferences in the type of memorial may fluctuate over time, the fact remains that people will always need the assistance of funeral professionals to plan services, execute burials, and aid in the grieving process.
Purchasing or Launching a New Business
If you’re considering owning a funeral home, then you’ll have two ways to enter the profession: either purchasing an existing funeral home or building a new business from scratch.
Buying a funeral home is undoubtedly the simpler and quicker option. With this approach, you’ll need to partner with an industry consultant that will help you navigate the process of finding, vetting, and negotiating the sale of the business. The primary downside of purchasing an existing business will be adapting its infrastructure (facilities, employees, and operations) to your vision.
Building a funeral home from scratch naturally comes with a lot more work and expense, as you’ll need to purchase property, hire employees, and develop an entirely new business strategy. However, for those who are unafraid of the lengthy process, this approach can allow you to create a business that’s completely aligned with your vision.
Regardless of how you plan to start a business, professionals like those at JCG can guide you through the accompanying strategic decisions. Whether you’re building or purchasing a funeral business, financials, employee management, and marketing can all benefit from some outside help.
6 Tips for Improving Funeral Home Profits
1. Create a Business Plan
At the onset of creating your funeral business—whether you’re building from scratch or purchasing an existing funeral home—you’ll need to create a business plan. Along with drafting a mission and your values, your business plan should also include tangible financial goals and timelines. As your funeral home continues to operate, you can reexamine these goals to better understand how you’re performing.
2. Marketing
While people continually need the help of funeral homes, your business will likely not be the only option available in a given region. Because of this, you’ll need to develop a marketing strategy—one that incorporates social media, a well-designed website, and SEO practices—to ensure that your ideal families find your services and feel compelled to book.
3. Customer Service
Quality customer service is arguably the most important component of your business. If a family has a positive experience with your funeral home, then they’re not only likely to return, but they’ll also likely recommend your business to friends.
Because of this, funeral directors need to implement a strategy to collect and monitor feedback from families. This allows a business to quickly address issues and build upon areas of strength.
4. Recruit and Retain Talent
To create an exceptional family experience, you’ll need to recruit and retain the best talent available. By networking with local mortuary schools and looking to funeral profession job boards, you can find highly skilled individuals that bring value to your team.
Once you’ve acquired the right people, you’ll also want to create incentive compensation plans as well as offer career development opportunities to ensure that personnel want to stick around.
5. Add New Services
While people will always need funeral homes to help them honor the passing of loved ones, the specific ways in which they wish to accomplish this goal are subject to change. Because of this, funeral homes need to remain aware of trends and consider introducing new services into their offerings when appropriate.
For example, during the pandemic, in-person gatherings were impossible to conduct safely. Many funeral businesses began offering webcasted memorials in which people could remotely attend a service and pay their respects. Now, with in-person gatherings resuming, many funeral homes offer the option of adding a virtual component to a memorial service, which allows those who live far away to still attend.
Offering new products like these can put extra money in your pocket as well as demonstrate to families that your funeral home is on the cutting edge.
6. Partner with a Funeral Home Consultant
Whether you’re purchasing a funeral business or building one from scratch, stepping into the role of business ownership is highly challenging. To ensure that you’re adeptly handling every component of the process, it’s often best to get advice from death care experts.
At Johnson Consulting Group (JCG), a leading death care consulting firm, our experts can partner with your team to help with every stage of creating a funeral business. Our Buying and Selling Consultants can help negotiate the sale of a business, our death care accountants can help get your financials in order, and our business consultants can help you build out marketing and employee retention strategies.
No matter how you plan to start a funeral business, you’ll need to get the right help. At Johnson Consulting Group, our team has the profession-specific expertise that can help your funeral home at any stage.