11/07/2024
How Many Funeral Directors Does it Take to Run a Small Business?
By Curtis Rostad, Director of Regulatory Compliance and Association Relations, Foresight
Check Your Bottom Line, It Could Be a Staffing Issue
Jack Spratt operates the McLean Funeral Home which does about 150 calls a year. Yes, the names are fictitious, but the funeral home is real. Most of his calls are still traditional funerals including casket, visitation, funeral service, and cemetery burial, but his cremation rate is about 40%. His prices are in line with his competition and the rest of his service area. He is still purchasing the business from his father-in-law, but the payments are reasonable for the size of business. His collections are reasonably good. He said his staff is hardworking, if not overworked, and yet he said he isn’t making money and he wants to know what to do.
A quick glance at his profit and loss statement reveals his problem. While you would expect a funeral home to have personnel costs in the 25% to 30% of revenue range, his is at 50%. For every $2 of revenue received, $1 goes to payroll.
When questioned, he reveals that six funeral director licenses are hanging on the wall. One is that of his father-in-law who is fully retired but still receives a partial salary in addition to the payments for the business...