The 6 Parts of Every Funeral Business

Seventy percent of new businesses fail in the first five years. Ninety percent do not make it ten years.

Fortunately, most funeral homes are not in start-up mode. They’ve passed the five-year, ten-year, and in some cases, 100-year marks, and they’re still in business. But even well-established funeral homes can still go out of business. 

Sometimes it’s because the owner hasn’t transitioned from traditional funerals to funerals that baby boomers want (i.e., not traditional funerals). 

Sometimes it’s because an aggressive competitor started a price war, and it turned into a race to the bottom.

As a Marketing Consultant, it’s tempting to think that all businesses can be saved with better marketing. But that underestimates the complexity of what it takes to grow a business and keep it afloat for generations.

An analogy that I think is quite fitting is to think of your business as an airplane. It’s an incredibly complex machine with a lot of moving parts. Yet, everything has to work correctly, or the plane is going to crash.

There are six major parts of a plane, and each one corresponds to a portion of your business.

The cockpit is your leadership team.

The cockpit is where decisions are made that have the most significant impact on the success or failure of your business.

It starts with having a clear understanding of your personal life mission. What will they say in your eulogy? How does owning a funeral home align with your personal mission?

Next, your leaders need to clarify the business mission. Where is this airplane going?

Leaders need to understand how all of the parts of the plane work together. Then, they have to check all of the gages, get the plane into the air, and safely land it someplace. That’s not a trivial job!

The plane’s right engine is your marketing.

This is where you need to consider your target market, marketing message, and overall marketing system.

If you have weak or ineffective marketing, your plane won’t stay in the air very long.

Your left engine is your sales.

For most funeral homes, the primary sales focus is selling preneed contracts. But actually, even making at-need arrangements is a sales process. It’s about converting a phone call into a new funeral call.

Your right engine (marketing) and your left engine (sales) work together to propel your airplane (business) forward. 

The wings of your airplane represent your products.

In the case of a funeral home, your wings are made up of burials, cremations, traditional funerals, other forms of memorial events, and merchandise.

Understanding the profitability of your products is key to your success. For example, you make a good profit on a traditional funeral but practically nothing on a direct cremation. But exactly how much?

Long-term business success requires you to revisit your products periodically, make sure you are selling what people want to buy, and have enough profit margin in each product.

The body of the plane represents your overhead. 

The wings (products) and engines (marketing & sales) have to work together to get the body off the ground.

Imagine sitting at your gate, waiting for a flight, and a plane pulls up with a massive body and tiny engines. You’d take one look at the aircraft and change to a different flight.

At least a couple of times every year, I hear from an owner who just spent their life savings on a new funeral home and didn’t save anything for marketing or sales. It’s sad, but that plane won’t fly!

The fuel tanks represent your cash flow.

The people in your cockpit (leadership team) need to be keeping a close eye on your fuel tanks (cash flow) at all times.

What happens if your plane runs out of fuel? It crashes!

If cash flow is an issue for you, it’s a symptom of a more fundamental problem. Your products, marketing, and sales are not generating enough cash to support your overhead. Ignoring that problem won’t make it go away.

Airplanes are incredibly complex machines. Yet, how often does one crash? Rarely, because the people in the cockpit never underestimate the complexity of their job.

Most funeral home owners started as Funeral Directors. But when a Funeral Director moves into the cockpit, they also need to understand how to lead a team and manage products, marketing, sales, overhead, and cash all at the same time.

If you found this analogy helpful, click here to check out the How to Grow a Business course on Business Made Simple online university. That’s where I learned this analogy and decided to share it with you today.

Until next time


PS: If you are transitioning your business to the next generation, I would highly recommend the Business Made Simple courses. Your son or daughter may be a great Funeral Director, but they need new skills before taking over the controls.


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