Top Five Reasons Funeral Home Owners Don’t Hire an Advisor – and Why They Should
Many funeral home owners believe they can manage the sale of their business independently, saving money and time. While some achieve success, many others unknowingly forego a significant portion of their potential proceeds. At NewBridge Group, we’ve encountered numerous cases where clients, initially prepared to accept an offer, sought our involvement on the advice of their attorney or accountant. In several instances, our disciplined and organized approach has led to final prices significantly higher than the initial offers.
Our success isn’t due to exceptional genius but rather stems from a methodical process that ensures transparency with potential buyers, introduces competitive bids, and safeguards the offer’s terms until the closing.
We’ve listed the top five misconceptions about why funeral home owners may think they don’t need a professional advisor to assist in the sale of their funeral home—and why these myths are important to address.
Myth 1: “It’s like selling a house, which I’ve done before.”
Selling a funeral home – a business built over a lifetime, if not several lifetimes – is a unique and unparalleled experience. Entrusting such a significant transaction to someone without prior business sale experience, often the owner, may not be the wisest choice. Unlike a homeowner, seasoned advisors like NewBridge Group bring decades of experience managing various funeral home acquisitions. To ensure a flawless transaction, it is beneficial to the funeral home owner to rely on a professional advisor who can navigate complexities, identify optimal selling times, determine the business’s value, and address potential deal-breaking issues.
Consider the time and expertise needed to secure the highest value, manage the sales process, and handle various aspects such as customer concentration analysis, legal matters, and environmental compliance. The average funeral home sales process takes approximately six to twelve months, often resembling a full-time job.
Myth 2: “An advisor will scare off a buyer.”
Contrary to common belief, buyers often view sellers without advisors as potentially lacking in strategic decision-making. Advisors understand buyers’ objectives, ensuring a clear, credible, and consistent communication process that accelerates the transaction’s pace. In fact, having an advisor can make the process seamless and efficient for both the buyer and the funeral home seller.
Myth 3: “A good accountant and attorney can handle it.”
While financial statements and tax returns are crucial, selling a funeral home involves more than just numbers. Advisors can present financials on an adjusted basis, accounting for one-time items and ensuring a comprehensive evaluation. Beyond numbers, advisors like NewBridge Group help define and achieve specific goals, drum up competition to secure the best price, and facilitate negotiations.
Myth 4: “My financials and tax returns are in good order – they don’t need adjustments.”
Unexpected events, like the Covid pandemic, can distort financials. Advisors can identify anomalies, make necessary adjustments, and prevent sellers from undervaluation due to non-recurring disruptions.
Myth 5: “I don’t want to pay a retainer fee.”
Contrary to common perceptions, most financial advisors receive the majority of their compensation only if a transaction closes. A modest retainer ensures that clients are committed to the selling process, facilitating timely information sharing. Experienced advisors often prove their worth by securing higher offers.
More Than a Transaction
The decision to sell a funeral home is monumental, and emotions can run high. Beyond securing the highest purchase price, a good advisor becomes a partner in guiding funeral home owners through this significant life change.
If you’re considering selling, we’d be delighted to discuss the process with you. Contact NewBridge Co-Managing Partner, Todd Reich, at todd@newbridgegroup.com.