I thought we were going to crash…
I was on a small 8-passenger commercial plane. It was the type that is so small that they seat passengers according to their weight, and you could look down the aisle and straight out the cockpit window.
The pilot was attempting to land in the middle of a storm, and the plane was tossed around by the high winds.
We could see the runway ahead of us, but the plane pointed at the trees instead of the runway. It was as if the pilot was trying to land the aircraft sideways. One of the passengers screamed in terror while others quietly prayed.
At the very last second, the pilot straightened out the plane, and we landed safely. We all cheered and breathed a sigh of relief.
A year ago, I wrote a newsletter describing the six parts of any funeral home business using an airplane analogy. Here are the parts,
The cockpit is your leadership team. In most funeral businesses, the leadership team consists of the owner, operations or business manager, key employees, and a handful of outside advisors.
The right engine is your marketing. For a funeral home, this will typically consist of a marketing message, website, Google presence, social media, and traditional methods like radio or TV ads.
Your left engine is your sales. Most owners recognize preneed as a sales process but miss the fact that helping a family with at-need arrangements is a similar process.
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.
The body of the plane represents your overhead. Your facility, staff, vehicles, and long-term debt are all part of your overhead.
The fuel tanks represent your cash flow. Managing accounts receivables, payables, and payroll taxes can keep any owner up at night. Yet your engines need fuel!
Developing a strategic growth plan involves addressing all six parts of your airplane (funeral home business). If you ignore any parts, your plane will probably crash or have to make an emergency landing before you reach your destination.
Here are six common strategic blunders I have seen funeral home owners make when attempting to take their business to the next level. Avoid these mistakes!
Blunder #1 – Not defining your destination
A plane cannot take off until the pilot has filed a flight plan that clearly defines the destination. Last week’s article discussed how to find your opportunity for growth. The opportunity is your destination.
Many owners will define the destination as having a larger funeral home business and more revenue. But that’s not a clear enough definition of your destination.
There are parts of the funeral industry that are growing, such as the “celebration of life” market, and parts that are shrinking, like the traditional funeral market. But even within the shrinking traditional funeral market, the low-cost segment is growing (e.g., Newcomer).
Your strategic plan should always include a clear description of the opportunity you are pursuing. An easy rule of thumb is to never aim for an opportunity that is shrinking. Instead, aim for one that’s growing, and you’ll have a better chance of hitting it.
Blunder #2 – Not planning for the crew
Imagine a flight attendant walking down the aisle on a plane, and you ask, “What time do we land in Chicago?”. They look confused and say, “I thought we were going to St. Louis.”
One of my clients spent months developing a new service offering for families. We rolled out the marketing, and families started asking about this new service. Unfortunately, the owner didn’t train the Funeral Directors, and one of them told a family, “that’s just marketing; we don’t really do that here.”
This happens in funeral home businesses all the time. The leadership team sets a direction, makes plans, and fails to let the staff know or give them the tools necessary to get there.
Every strategic plan must describe how you will get your team onboard, or it’s destined for failure.
Blunder #3 – Failing to balance the right and left engines
Remember, your right engine is your marketing, and your left engine is your sales. Both engines have to work together, or the plane will struggle. If one engine isn’t working correctly, you will need to make an emergency landing pretty quickly.
We once created a preneed Facebook lead generation campaign for a client that produced a flood of leads. However, within a few days, the client’s preneed sales rep complained because he couldn’t keep up, and the client asked us to shut off the campaign.
Just like a pilot has to keep the right and left engine in balance, the leadership team of your funeral home must keep their marketing and sales in balance. Too little marketing and your salespeople have no leads to close. Too much marketing and your salespeople can’t keep up.
Blunder #4 – Failing to balance overhead and cash flow
Many years ago, I had a client who had recently built a beautiful high-end funeral home. He had used his life savings as the collateral but still had a $3M mortgage. The weight of the debt was crushing him, and every month he had to pull money out of his 401K to pay his mortgage.
When he called me, he had done 30 calls in his first year. Through our marketing efforts, we had him on track for 70 in his second year, but he needed a lot more just to break even. Eventually, he told me that he was three years into this business venture and still hadn’t drawn a salary.
Your overhead is the body, and the fuel is your cash flow. You need fuel to power your marketing (right engine) and sales (left engine). Your plane will crash if your body is too big and your fuel is too low.
I’ve read that planes are off target 90% of the time. Yet, a good pilot can make the proper corrections, and the aircraft reaches the intended destination.
It takes more than compassionate care to grow a funeral home business. You need a detailed strategic plan that avoids the four strategic blunders that I’ve outlined above if you are going to take your business to the next level.
Until next time
John
PS: I haven’t been on a small plane since that event!
