Feeling Trapped
Adam Jones is a 3rd generation funeral director based in Northwestern Louisiana. Adam grew up in the business with his grandfather and father and had always dreamed of taking over the family business with his younger brother and sister. He has fond memories of playing hide and seek around the funeral home, however, he has a not so fond memory of the showroom. Once while hiding, he snuck inside an open casket on display. His younger brother saw him, closed the lid and held him inside for a few seconds. While it was brief, it affected him, and he remembers it.
Trapped in the Business
That was a long time ago, he is now in his 50’s, has been very proud to carry on the family name, and is well known in his community. However, he is now feeling trapped again. Not trapped in the casket, however, trapped inside the four walls of his funeral home. Finding reliable employees in rural Northwestern Louisiana has been difficult, much like many parts of the country. Many prospective directors only want to work 9 to 5, not on weekends, and expect to be paid a lot more than the funeral home can afford. Adam’s two sons play football for the local high school and middle school; however, Adam only gets to about half of their games. He has experienced high turnover for reasons ranging from leaving the industry to moving to a funeral home in a larger community. While call volume is up, revenues have been flat for the last 4 years, due to the increasing percentage of cremations. His cremation percentage is 50% and he and his team have done a good job of selling services along with cremation calls.
Adam had never really contemplated an “exit strategy”. His plan was to pass the family business on to his two sons. However, he’s not sure they want to enter the funeral industry, and he’s also not sure he wants to pass on this “burden” to them. In his mind, the funeral care business is changing. It’s changing somewhat slowly, but more quickly than he expected.
Looking For a Way Out
Adam began to think, “It doesn’t have to be this way. Our funeral home has a longstanding tradition in the community and provides the best quality service around. If only I had a partner that could provide some support so that I could focus on the most important part of the business, the families. That would allow me some flexibility and some freedom.”
Four of Adam’s closest competitors have had ownership changes in recent years. One to a public firm where the former owner left the community the day of closing, a second took a year to sell to a young director in his 20’s using SBA financing, a third closed its doors, and the fourth partnered with a regional buyer.
The former owner that sold to a private regional buyer seems the happiest. He’s continuing to stay involved in the business as much or as little as he wants. The buyer is very hands off, provides him with back office support and a network of resources that he has been able to use from time to time. Not to mention, he was very happy with the offer and structure the regional buyer presented. He seems less stressed and says his quality of life has improved dramatically.
Adam met with this 4th competitor to learn more, and they convinced him to call The NewBridge Group.
The NewBridge Group is a funeral home consulting firm focused on mergers and acquisitions. NewBridge worked with Adam through this process, providing him with a free valuation to help him with his decision.
If you are interested in learning more about who’s buying in your area, and/or having a valuation performed on your funeral home, please call me any time: Todd Reich: 404-542-9956 todd@newbridgegroup.com
*Names and locations have been changed for confidentiality.