Here’s an AI-generated summary of this week’s video. The full transcript is below the video.
In this week’s video, John Callaghan emphasizes the importance of innovation in the funeral home business, sharing two contrasting startup experiences to illustrate his point. One owner incurred significant debt to build a high-end facility but failed due to poor location planning and safety issues. In contrast, another entrepreneur leased a small space with minimal debt, partnered with local organizations, and achieved success by quickly implementing and testing his business model. Callaghan underscores that rapid implementation of innovative ideas is crucial, as market feedback ultimately determines their viability and success. He concludes by stressing that innovation is key to business growth in the funeral home industry.
AI-generated transcript – Innovating Your Funeral Home & Creating a Minimal Viable Product
Hi, this is John Callaghan. This week, we will discuss innovation and how innovating your business can provide something new to the market. Interestingly enough, I have had multiple clients double the size of their funeral home businesses, not just through good marketing but also by innovating. When you innovate, marketing becomes much easier because you offer something your competition does not.
For many funeral homes, the biggest innovation they ever make is when they open their doors. Here are a couple of stories about startups I’ve worked with over the years, both of which had very different experiences.
The first startup took over two years to complete construction. The owner decided to start his own funeral home, mortgaged his house, took on a huge amount of debt, liquidated his 401k, borrowed money from family, and built a beautiful high-end facility. The pictures I saw were absolutely gorgeous—state-of-the-art technology, a huge chapel seating well over a hundred people, three visitation rooms, a 200-car parking lot, and a massive amount of debt. If I remember correctly, he had about a $4 million mortgage. In the first year, he did only 16 calls and did not draw a paycheck, which caused a huge amount of stress.
The location of the funeral home was a significant problem. The street it was built on had a 55-mile-per-hour speed limit, meaning most cars were going 60. There was an accident in front of the funeral home within the first couple of weeks. An elderly person pulling out of the funeral home got T-boned right in front of it, and from that point on, nobody wanted to go there because it was dangerous.
He eventually had to sell the business to a competitor who only paid enough to cover part of the debt, leading him to declare bankruptcy. It was a sad situation that could have been avoided with better planning.
In contrast, here’s a different startup experience. This gentleman called me one time. He had leased a former bank branch office, spent a couple of months remodeling it, and had minimal space to work with. There was enough space to meet with families, a prep room, and a private family viewing room. He partnered with churches and VFW halls for everything else.
With very little debt, he could offer aggressive pricing and did 110 calls in his first year—a very different startup experience. By keeping his innovations more manageable, he cut costs, got his business up and running quickly, and let the market decide its success.
This is called creating a minimum viable product. You create the smallest version of your business possible, get it out there, and let the market decide whether it’s good or not.
Innovation is extremely important in the funeral home business. It could be a new location, new equipment, or a new service that you’re going to offer, such as celebrant services or new packages.
The key is the rapid implementation of these innovations because you don’t know whether you have a good idea until someone is willing to pay for it. You might think it’s a great idea, your spouse might think it’s a great idea, your accountant might think it’s a great idea, and you’ve hired consultants who think it’s a great idea. But it doesn’t matter until the market decides.
If you don’t get your idea out there quickly enough, you risk running out of cash. A competitor could come along and copy your idea, or you could waste years on the wrong idea, which is a sad situation.
Innovation is the key to growing any funeral home business, but you must get your idea out there and let the market decide.
I’ll be back next week with more information on how you can win more calls and serve more families.
Bye for now.
