This has been a tough year so far, business wise. We have been struck pretty hard by the double whammy, decrease in the volume of business and increase in cremation rate. A few of the funeral trade writers have made reference to this saying that it’s going to hit more and more firms. I knew this was coming. I watch the numbers closely and keep track of the other firms in the area and what they’re doing too. I know they are having the same challenge.
We are in the Dip before the baby boomers, It’s the reduced birthrate and immigration rate in the US from 1925 to 1945. It means there are just less people going to die for the next few years. The death rate is down 7% in our area from last year. Now combine that with a major shift towards cremation, (I’m at 65% so far this year) which means less total dollars coming in, and my skivvies are getting tighter every day.
Let’s look at the numbers in a typical scenario.
Smitty’s Funeral Home
|Call year||Volume Decrease||% Cremation||Avg Burial $$||Avg Crem. $$||Total $$||$$ Decrease|
And this can happen to you real quick. What would your books look like if this year your income dropped by $200,000.00?? Chinese caskets and selling more thumbies isn’t going to help a whole lot. This isn’t about making more money, it’s about trying to stay in business.
Email me if you want a spreadsheet so you can plug in your own numbers.
I have a feeling there are lots of funeral homes out there like mine. We’ve got buildings and staff geared towards the way we did business 35 years ago. We still have a percentage of people who want it the old way. But that percentage is shrinking and the amount of people who want less of our traditional offerings is growing. Yet our expenses remain the same (Staff, Benefits, and buildings, autos). So what can you do? I have reduced my staff and found the best deals on benefits. But you can’t just close up a location and sell the building next week to put money in the checking account. In West Michigan the unemployment rate is close to 15% and less than 5 commercial properties sold last year. The local banks are all hurting. So we hold off on building repairs, make the cars last another year, do more of the maintenance ourselves and I work more hours instead of bringing in the part time folks. All of which hurts the overall economy of the area. It’s a vicious circle.
The people still need us when their loved ones die. But they are watching their dollars closer too. And I feel for them because I’m in the same position. This year it has been very common for people to come in and say “this is all we have to spend and there isn’t any more”. So I give them the best deal I can, and still provide as much service as I always do. I wish there was an easy answer, but there isn’t. I keep hoping for the economy to turn around and people to feel more secure about their futures. But I think it’s going to be several years before that might happen.
Until then we’ll just keep hanging on. My great grandfather and grandfather made it through the Great Depression helping people when they needed help. I still hear stories today about what they did for families when times were financially tough. That generosity seems to have been paid forward in the form of loyal customers. I sure hope that history will repeat itself.
I’m Dale Clock. Thanks for listening.