However, the allure of ownership should be approached with careful consideration. While the idea of having the freedom to set your own schedule and make decisions without supervision is appealing, there are inherent challenges. Being a good funeral director doesn’t necessarily equate to being a good manager, and similarly, good managers don’t always make good owners. It’s critical to recognize personal inadequacies and work on developing the skills necessary to succeed as an owner.

As Tom noted in his article, the journey from funeral director to owner requires a deep understanding of what ownership entails. It’s easy to look at the rewards of owning a business without fully appreciating the hard work required to reach that level. The climb to the top involves a great deal of learning, adaptation, and a willingness to let go of certain tasks in order to assume the broader responsibilities of ownership.

When exploring funeral home ownership opportunities, it’s advisable to memorialize any promises of future ownership in writing with a current owner. Without a formal agreement, there is little foundation to build on, and years of hard work might not result in an ownership stake. Aspiring owners should also be prepared to enhance their leadership and management skills through conferences and training programs, such as those offered by Johnson Consulting Group’s Leadership and Management Academies.

One of the current advantages in our profession is the availability of financing. With the right preparation, a bank can fund the purchase of a funeral home, allowing the new owner to pay back a loan over time while keeping the business for themselves. This is a key part of the American dream, but it requires thorough financial readiness, both in terms of savings and skill set. Aspiring owners must be equipped to manage debt and know when and where to seek assistance.

It’s important to remember that the learning process never stops. As an owner, others will look to you for answers, which can create pressure. But, it’s crucial to continue growing and seeking support when needed.

Looking at the next generation, there’s often a misconception that “They won’t work as hard as previous generations”. However, today’s business professionals are finding innovative ways to balance work and life. Through outsourcing, leveraging resources like associations and the internet, and using study groups, younger professionals are finding efficient ways to accomplish their goals without overworking themselves. In summary, it’s more about prioritizing balance and using the abundant resources available.

In conclusion, owning and running a funeral business isn’t for everyone, but it can be incredibly rewarding. The key to success lies in taking care of the families you serve…Period! If you can do that, they will take care of you. With the right preparation, support, and willingness to learn, you can enjoy the many benefits of ownership and establish a successful future for you and your family.

*This article was originally posted on the Funeral Director Daily website.

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Crafting a Strategic Financial Plan for Funeral Homes

Developing a robust business plan is the first step toward financial mastery in the funeral service profession. This plan serves as a roadmap, guiding your funeral home through budgeting, forecasting, and cash flow management. A well-crafted business plan showcases the viability and strategic vision of your funeral home.

Key Elements of a Financial Plan:

1. Budgeting and Forecasting: Establish clear financial goals and projections to guide your business decisions.
2. Cash Flow Management: Maintain a steady cash flow to ensure operational efficiency and sustainability. Consider using a thirteen-week cash flow analysis provided on a weekly basis.

Understanding a comprehensive financial strategy will enable your funeral home to provide essential services while maintaining financial health.

Balancing Empathy with Economics in Funeral Service

Funeral home owners face the delicate task of blending empathy with economic viability. Financial control is crucial in balancing these elements, ensuring that pricing structures are fair and transparent while supporting your business’s profitability.

Strategies for Balancing Empathy with Economics:

• Transparent Pricing: A key consideration would be placing your prices on your website. Also, utilizing phone shopping vendors to ensure you are not only in compliance but providing all options to families guarantees your transparency and compliance.
• Cost Management: Control expenses on essentials like caskets and services to keep operations efficient and families happy.
• Revenue Tracking: A detailed sales contract analysis ensures that you know exactly what the average sales are per case type along with the averages of the items sold within those calls. This ensures that your pricing is not only competitive, but that you’re recovering your pricing as a correlation to the average sale you’re receiving.

By combining compassionate care with sound financial strategies, you can offer meaningful services while maintaining a viable business model.

Sustaining Your Funeral Home Business

Effective financial control is key to sustaining a funeral service business. Strategic planning helps you adapt to market changes while honoring the emotional aspects of our profession.

Key Financial Strategies for Sustainability:

• Budgeting: Predictable costs ensure affordability for clients and stability for your business.
• Financial Forecasting: Prepare for industry trends and future demands in your market.
• Investment in Staff Training: Enhance service quality and succession planning which fosters client trust and loyalty.

A well-structured financial plan empowers your funeral home to meet customer needs with integrity, ensuring both dignified services and business longevity.

In Conclusion, crafting a strategic financial plan is the foundation of a thriving funeral service business. By focusing on budgeting, cash flow management, and balancing empathy with economics, funeral home owners can sustain their operations and serve their communities effectively.

*This article was originally posted in NFDA’s Financial Column.

The post Crafting and Sustaining a Funeral Home Financial Plan appeared first on Johnson Consulting Group.

Q: Which major tax provisions from the TCJA are set to expire at the end of 2025?

A: Individuals and families can expect tax increases, but for business owners, the most concerning provisions include:

• Loss of the Section 199A Deduction: This deduction, currently available to pass-through entities (such as S-corporations and LLCs), allows business owners to deduct up to 20% of qualified business income. When this expires, pass-through entities will lose a valuable tax-saving tool, potentially increasing the tax burden on small businesses and entrepreneurs.
• Loss of Caps on State and Local Tax (SALT) Deductions in High-Tax States: Taxpayers in states with high income and property taxes could face higher overall tax liabilities as the current $10,000 cap on state and local tax deductions disappears.
• Reversion of Capital Gains Tax Rates: Capital gains tax rates will revert to being determined by your regular income tax bracket. This means that individuals in higher income brackets may see a significant increase in their tax rate on long-term capital gains.
• Reduction in Estate and Gift Tax Exclusion: The current estate and gift tax exclusion of $12.92 million per individual will drop by nearly 50%, meaning estates valued over approximately $6 million will be subject to estate taxes. This change could affect many families planning to transfer wealth to the next generation, making estate planning a crucial step in the coming years.

Q: What tax strategies should funeral home and cemetery business owners consider as 2025 approaches?

A: One key strategy is to consider accelerating your income before the TCJA provisions expire. With capital gains rates set to revert to higher levels based on your income tax bracket, now is an optimal time to sell assets, take profits, or increase distributions. By doing so, you can take advantage of the lower rates now, reducing your tax liability compared to what it would be under future tax rules.

This strategy is particularly beneficial for those with capital assets such as stocks, real estate, or business interests that have appreciated significantly over time. Locking in current capital gains rates could save you a substantial amount in taxes before the rates increase post-2025.

Other considerations may be to reevaluate your business structure, either converting it to a C-Corp or an S-Corp to lessen taxes. It may also be an opportunity to increase contributions to retirement plans, investing in capital equipment, or exploring tax-advantaged benefits for employees.

The Importance of Timing in Succession Planning

When it comes to succession planning, the timing of a sale can have a significant impact on the value you ultimately retain. In the words of Jake Johnson, “It’s not what you get, it’s what you keep.” Even though the sale price of a business may remain the same before and after 2025, the amount you keep after taxes will change. This is due to the potential tax increases that could arise when the TCJA provisions expire.

Q: How should funeral home and cemetery business owners approaching a succession plan think about the timing of a sale?

A: If you’re considering transferring your funeral home or cemetery business, now may be the optimal time to maximize the value of your business. With the potential tax increases on the horizon, selling before the end of 2025 could result in you keeping more of the proceeds.

“It’s just food for thought and something business owners should be aware of,” Jake continued. “If you were planning to sell around 2025, the tax changes might push you to reconsider your timing. Even if you’re not quite ready to sell, it’s worth considering whether selling now could help you avoid a higher tax bill later.”

The core idea is that waiting until 2026 or 2027 could mean a larger tax burden, requiring your business to make up the difference in growth or additional calls on capital. By transferring before the end of 2025, you may be able to capture a more favorable tax position and keep more of the proceeds from the sale. However, it’s important to remember that not everyone will be ready to sell at that time, so planning ahead and discussing options with a tax advisor is crucial.

In conclusion, with the expiration of these TCJA provisions on the horizon, proactive tax and succession planning are essential, working closely with a financial advisor will help you craft the best strategies to minimize your tax burden.

*Johnson Consulting Group and its affiliates are not tax professionals. You should review the content of this article with your tax professional to see how it applies to you.

The post Tax Changes Looming: What Funeral Home Owners Should Know appeared first on Johnson Consulting Group.

Encouraging adoption by rewarding wins with some of the ideas below can get you moving in the right direction.

Incentive Compensation Plans

An incentive compensation plan (ICP) is a form of variable compensation for your team members. A common practice is to tie the program to targeted sales, customers’ experiences, and the overall success of the organization. Incentive compensation plans can be customized to whatever metrics are important to the organization. They provide an extra dose of motivation for exceptional workplace performance and increase the chances of maintaining quality talent. Good ICPs must be understandable, fair, easily measurable, and consistent.

Without a doubt, Performance Tracker X has proved to be an important tool in easily managing ICPs. With Performance Tracker X, your team members can monitor their performance and ICP metrics in real time. This focuses their attention on the metrics that matter to you most while driving their personal growth and the growth of your organization. Increased focus increases survey communication with families which improves response rate and generates more actionable data.

Employee Recognition

The care, compassion, and attention your arranging directors pay to the families they serve is of the utmost importance to them and can weigh heavily. Taking the time to appreciate and recognize successes has been shown to increase productivity, comradery, culture, and loyalty to the company, leading to higher retention.

There are many creative ways to accomplish this which take little time or cost.

• Create an internal awards program for those who had the most perfect surveys responses received, highest response rate, and/or most digital collection.
• A monthly “spin-to-win” game with gift cards or other give aways. Add your team members name to the wheel each time a perfect score survey is received.
• Forward a congratulatory email each time a perfect score survey is received to the whole team. This allows everyone to feel each other’s success while publicly acknowledging the arranging director.
• Highlight an arranging director each month on your social media including some of the positive feedback left in the surveys.
• Read the positive feedback outload during team meetings.

Giving a little can get you a lot!

Providing clarity and setting expectations

It is important that your team members understand organizational goals and the part they play in achieving those goals. Team members who cannot see beyond their role often feel a reduced sense of satisfaction and fulfillment which can lead to turnover, poor relations between coworkers, and an undesirable work environment. Help your team members to understand the importance of the survey program and how it plays into your larger vision by communicating often and across multiple channels and altitudes.

People retain information differently. Some may rely heavily on verbal communication whereas others may need written information, visual aids, or even examples of the concepts in action. Repetition of the information helps to engrain the importance and communicates that the direction you are providing is here to stay. Ensure adoption at all levels of your organization by breaking down high-level concepts and explaining how they relate to your team members’ day jobs. When you pair the newfound clarity with a framework which spells out the goals or criteria which support the mission, your team members become a part of the bigger picture rather than someone who is simply affected by it.

Would you like to schedule a time to discuss how to heighten engagement within your organization? Interested in an ICP in your organization? We are always here for you!

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#1 Establish a Safety Supervisor

At a funeral home, crematory, or cemetery, the safety supervisor implements and enforces safety policies and procedures to prevent accidents, injuries, and health hazards in the work environment. Sometimes the employer or general manager holds this position, and other times regular employees hold this position.

#2 Set Clear Communication Channels

The safety supervisor works alongside management and employees to communicate safety procedures to employees, and ensure that these procedures are followed. It is also important to remember that even if the employer is not the safety supervisor, it is still the employer’s responsibility to adequately train the safety supervisor on their duties to be able to help all staff accomplish their work tasks safely.

#3 Policy Development

Create and update safety protocols, guidelines, and procedures in accordance with industry standards and OSHA regulations. This includes safety training programs for employees. This should be done alongside the employer if the employer is not the safety supervisor.

#4 Risk Assessment

Conduct regular inspections and risk assessments of the workplace to identify potential hazards and risks. This involves analyzing processes, equipment, and conditions that might pose threats to employee safety. These should be communicated to the employer if the employer is not the safety supervisor.

#5 Safety Training

Organize and conduct safety training sessions for employees to educate them about safety protocols, emergency procedures, proper equipment handling, and the use of protective gear.

#6 Incident Investigation

Investigate accidents, near-misses, or safety-related incidents to determine their causes and prevent future occurrences. Then, analyze data and implement corrective actions to improve safety. Contact CST to learn about OSHA reporting exceptions in the deathcare industry.

#7 Localize Compliance

Ensure that the workplace complies with local, state, and federal safety regulations and standards. Twenty-nine (29) states have state-specific OSHA plans. Be sure to determine if you are in one of them and ensure your OSHA manual, training and recordkeeping meet your state requirements. Then keep abreast of changes in regulations and implement necessary adjustments.

#8 Emergency Preparedness

Develop emergency response plans and procedures for various scenarios like fires, chemical spills, or medical emergencies. Then, conduct drills annually to prepare employees for such situations.

#9 Collaboration

Work closely with management, HR, and other relevant departments to integrate safety practices into the organizational culture. OSHA training must be conducted “at the time of initial assignment” according to OSHA.

#10 Documentation and Reporting

Maintain detailed records of safety inspections, incidents, training sessions, and compliance activities. OSHA will not take your word for it. You must have written proof of all of your compliance and training activities or face citations.

About the Author: Mark Harrison is the president of Certified Safety Training, the exclusive safety and compliance provider to the largest associations in North America. Certified Safety Training is backed by Certified Safety Professionals, more than two decades of deathcare safety experience and award-winning safety programs. Launch Your Safety Program With The CST App

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Preneed Sales: Asset or Liability?

One of the frequent questions we encounter is whether preneed sales are an asset or a liability for a funeral business. The answer is both. In accounting terms, preneed sales are considered deferred revenue, which is technically a liability. However, the value of a robust preneed book of business is invaluable for future enterprise value.

Starting with Preneed Programs

There are numerous third-party marketing companies that can assist with implementing preneed programs, or you can manage it in-house. Regardless of the method, setting a monthly sales target is crucial. Ideally, for every at need contract, we aim to replace it with 1 to 2 preneed contracts.

Our analysis of various funeral homes across the United States and Canada indicates that preneed contracts typically represent 35% of the annual at need case volume at a funeral home. This statistic is often referenced when evaluating the value of the preneed book of business. For instance, a funeral home with $5 million in their preneed account, might see only 35% of that amount come to fruition annually. In other words, that represents 35% of the total at need revenue for the year. Then, taking into consideration the correlating operating expenses of the business, the result is excess cash. This method creates a simple view of how to determine the value of the contribution of the preneed total book of business.

For further insight, consider a funeral home with an annual revenue of $1 million (excluding cash advances), where $350,000 of that revenue is derived from preneed contracts converting to at need. This revenue then incurs expenses, and the resulting EBITDA (Earnings before Interest, Taxes, Depreciation, Amortization) is multiplied to determine the business’s value. Additionally, preneed sales help lock in today’s family preferences, which is crucial as trends like rising cremation rates continue.

Importance of Monitoring and Training

We believe that what gets measured gets done. Therefore, having a budget, weekly sales reviews, and consistent funeral home training in customer service are essential. Even funeral businesses experiencing a decline in at need volume often maintain consistent preneed case volume. This consistency highlights the loyalty families feel when they pre-plan and return to the same funeral home.

Conclusion

When asked if a preneed program is an asset or liability, it is clear to us that it is a significant asset that enhances the value of a funeral business. However, careful planning and monitoring are necessary to ensure that preneed sales do remain an asset and not a liability. At Johnson Consulting Group, we conduct numerous contract analysis studies and provide strategic planning guidance to ensure the effectiveness of these programs. Our partnerships with third-party experts further support our clients in maximizing their business value through preneed sales.

If you want to know more about increasing the value of your business, feel free to reach out to us at Johnson Consulting Group.

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It is an honor to work in the funeral and cemetery profession. Providing professional and compassionate service to a family during one of the worst times of their lives is truly a higher calling. 

However, designing personal and memorable funeral experiences shouldn’t take a backseat to measuring customer satisfaction. Families that are satisfied with their funeral home experience are more likely to share their story with others and recommend your services to the community. This kind of organic advertising is the best way to sustain financial success.

Get Honest Feedback

So how does a funeral home go about measuring customer engagement and satisfaction? To start, you need to have something to measure. Funeral directors can collect meaningful data by simply asking clients for feedback on their overall experience with the funeral home. You can request customer input in person after the service or via online surveys that can be filled out on your website. You can also mail out survey forms to your families, but make sure you include a pre-paid return envelope.

What kind of survey questions draw out sincere responses and honest feedback? Here are some useful ideas and strategies that can help you get the right data inputs to help you measure your funeral home’s customer experience. 

First Impressions Count

As the saying goes, “You never get a second chance to make a first impression.” A family’s first contact with your funeral home, whether it’s on the phone or in person, is a crucial building block. Some questions that can help you analyze a customer’s initial thoughts might include:

• How was the family greeted? 
• Is the greeting consistently applied at all times? 
• How responsive was the staff?

Managing first impressions can provide meaningful data on how well your funeral home interacts with pre-need and/or at-need clients.

Arrangement Conversations

The arrangement meeting can make or break a family’s opinion of your funeral home. Funeral directors are trained to effectively manage the planning conversation, but there is always room for improvement when it comes to enhancing the experience for the bereaved family. 

Strong communication skills are vital to this process, for example, how attentive are you to the customer’s needs? Do you ask open-ended questions that allow the family to share stories about their loved one? How do you show that you are listening? Funeral arrangers must be able to listen well, show empathy, and recognize body language cues to drive the conversation on a deeper level.

Another element to consider is organization. Ask, is the arrangement conference well structured? Does the family understand all of the product and service options available? Clear communication of what your funeral home offers enables the family to make informed decisions based on their personal and financial preferences. Combining all of these elements into the arrangement meeting will have a positive impact on customer experience and provide valuable insight for enhancing the conversation.

Do Looks Matter?

The appearance of your funeral home definitely matters. Customers judge the presentation of your staff and facilities, and if they see something they don’t like it’s often the first thing they share with others regarding their experience. Unfortunately, bad news always spreads faster than good news, so funeral homes need to manage all aspects of their image accordingly. To prevent bad news, ask yourself these crucial questions:

• Is your funeral home clean and well-maintained?
• Are your funeral vehicles comfortable and in good working condition?
• Is your staff professional and accommodating?
• Are your facilities clean, organized and accessible?

Paying attention to the small details will keep your customers happy and improve your funeral home’s performance reviews. These metrics can be easily measured with survey questions or a simple feedback form.

Price vs. Value

A funeral is an expensive undertaking. Funeral directors should inform families about all the available options and discuss the costs and fees associated with each choice. Planning a funeral or memorial often causes emotional and financial stress, so it’s important to clearly explain the value of your funeral home’s services and expertise in relation to price

Once the arrangements are finalized and the pricing is set, the funeral home must ensure that everything goes smoothly. Exceeding expectations is the best way to build customer loyalty and satisfaction. It’s analyzed by looking at the performance and execution details before, during and after the service, and measuring customer perceptions of value received for money paid.

Customer Experience Tracking Tool

Measuring customer experience metrics is an established management strategy that can improve business operations and elevate your funeral home’s reputation. The Johnson Consulting Group’s  Performance Tracker™ customer survey and sales analysis tool helps funeral homes track performance metrics with user-friendly features and reports that provide accurate and timely measurements of customer satisfaction. Learn more about how Performance Tracker can help you grow your business.

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