According to a Small Business Administration report, two-thirds of small businesses won’t survive the next decade. And while funeral directing has long been seen as a recession-proof profession, that’s no longer the case.
Over the past two decades, hundreds of funeral homes have been closing shop across the country. Many are smaller, multi-generation, family-owned funeral homes. According to the NFDA, around 20,000 funeral professionals lost their jobs between 1997 and 2012, and profit margins continue to decline or stagnate — all while operating costs rise.
Today’s family-owned funeral homes are faced with challenges from every direction. Here are just some of the problems funeral directors face:
- Gentrification drives up real estate value, so the property becomes more valuable than the business.
- Families are spread out, meaning hometown cemeteries and longer wake periods are becoming a thing of the past.
- Cremation continues its rise to replace traditional burial.
- Consolidation by larger funeral conglomerates pressures family-owned funeral homes.
- New trends like DIY funerals, green funerals, funeral startups, and a demand for more unique services are growing.
Times Are Changing
Of course, not all of these changes are bad, but it means your funeral home needs to adapt. According to Martin Sorell, the CEO and founder of WPP, there are two things a small family-owned business can do to plan for future success and survival.
In an article he wrote for The Economist, Sorell said businesses should aim to take more risks and create a concrete long-term vision.
Take More Risks
Taking risks, especially in business, can seem scary. But it’s also vital for success and growth. As we’ve mentioned before, doing the same thing over and over — sticking with the status quo — will ultimately lead to stagnation and small business failure. It’s imperative to innovate.
Elise Mitchell, CEO of Mitchell Communication Groups, wrote in an article for Entrepreneur that you should “formulate a deliberate risk-evaluation process from the get-go. Every opportunity should drive forward your company’s long-term vision, but there are a few principles that ensure you’re making smart moves when it comes to risk — not blind leaps of faith.”
Mitchell’s advice for making calculated decisions includes balancing your bottom line with innovation. It’s important to always be looking for new ways to innovate while still maintaining your old ways of business. As Mitchell says, “The moment you stop looking for new opportunities, your business risks becoming obsolete.” Read the rest of her tips for calculated risk.
Planning for Long-Term Success
Planning for the long-term is another vital aspect, yet many businesses don’t have a plan for the future. Does your funeral home?
According to Business Insider, these are some strategies successful leaders use to generate a long-term plan for success:
- Anticipate, plan, and prepare for coming trends and change. We already know cremation is rising, but what other trends can your funeral home prepare for? Here’s a good list of funeral trends to expect in 2017.
- Research and stay informed to get new insights. Read blogs, magazines, and follow thought leaders in the funeral profession. Here are some networking tips to help you get started.
- Don’t be afraid to act. Slow and steady doesn’t always win the race. Don’t sit back and play catch-up to a competitor — become the leader in your community.
- Build a staff that focuses on innovation.
- Learn by experimenting and create learning opportunities from setbacks.