“Drive Yourself Out of Business, Don’t Let Others Do It For You” —Gary Vaynerchuk
I recently read an article about a West Coast funeral home that closed its doors after 60 years. I also recently talked with a small independently-owned firm dealing with some serious issues that threaten his future. We talked in depth and I felt compelled to assist him in examining the issues hindering his firms’ growth. Both of these situations bring up a serious dilemma we all face—how to stave off the death of our business.
I hate working for other people. I’m the biggest stick to the man guy. So I always do what I can to help independent firms stay independent. It truly breaks my heart when I hear of firms closing after decades of operation. I mean we’re talking about generations here! They’ve provided for their children through their firm, they’ve helped thousands in their community and it’s just gone. What’s worse is that this is happening all over the country. Independent firms are being acquired or just shutting down due to numerous reasons. Is your firm on the brink of closure? Have you had a dramatic loss in business this past year? If so what are you going to do about it?
As I write this article it reminds me of the movie Cinderella Man. It’s the Great Depression and it’s bad everywhere. Russell Crowe’s character, Braddock, is a boxer trying to provide for his family. He’s old, tough, but not the best. His turning point came in the middle of a fight against Lasky and he’s getting wailed on. His opponent just gives him the devastating blow that’s supposed to finish him off. It even knocked his mouth guard out. He’s dazed and about to go down, until. Until his life flashed before his eyes and he saw something that made him stand up. He saw the past due bills, a despondent wife, his family in the bread line, empty beds in an unfurnished home. He saw something that he knew was worth fighting for—his future. He smiles.
He smiles because he knew the hardest hit he ever received will never be worse than the reality of a situation he refused to come to pass. He smiled because he knew what he was fighting for and he had to win. As an independent firm do you know what you’re fighting for? It’s not just to keep the doors open, it’s to make sure that your employees still have jobs and can pay their bills, it’s so your kids have a future whether that’s in the family business or not. It’s so your community still has a local option that is going to look out for their best interest at their most vulnerable.
That’s why we’re gathered here today. While we pay tribute to the firms that have come and gone, much like a memorial service itself we need to reflect on what we can do to ensure, not make sure, their story is not ours. I’m going to take some time to talk about the firm that recently closed as well as the local firm I talked to and discuss various things that could have been done or, be done to turn their situation around.
Case Study 1: West Coast Firm
While I don’t have all the details about the firm there were several noteworthy identifiers to their untimely demise that we can discuss.
Problem A: Gentrified Neighborhood
Their primary target was being gentrified out of their neighborhood which meant that a new class was moving in. Now, I’m not going to go down the race rabbit hole. Race as an excuse goes only so far. But there were two issues I see regarding this. They mentioned that they were sensitive to the financial needs of their target, which in truth means, if we’re being honest here, they had no money. We’re not monsters. Our hearts go out to them and we want to give them a break. We do it all the time and shouldn’t stop. However, we must understand the reality. There will always be families on a miniscule budget in need of your services.
Solution A: Give the People What They Want
Provide them a solution within their budget that’s still profitable for you. It’s basic business, you can’t sell to someone who can’t buy. I learned that the hard way. However, we should always have several streams of income for our business so if one dries up we have others. Lower income families can still be a revenue source, but considering the trend they should have had others. Additionally, they stated that their community was being gentrified since the 70s. That begs the question, you’ve dealt with this trend for over 40 years and did nothing? I don’t know that for sure, perhaps they did. However with gentrification it actually presented a potential solution, people who could pay.
To capture business in a changing neighborhood you need to reinvent yourself. We all have to do this every several years. Markets change, the industry changes and you either keep up with the changes or die. The core tenement of business is that people want to business with someone they know, like and trust. While race can be a factor, it’s not a final driver. A local business is someone who neighbors see and interact with every day. It’s someone’s door they can knock on if there is an issue and feel confident it will be solved because simply, we have to live together. Yes, a local business is someone they know, like, trust and will use. Expanding into other neighborhoods is an obvious option, but still bears mentioning.
Problem B: Predatory Loan
This is unfortunate. They mentioned that was a big factor considering it was a seven-figure loan. Most likely, it had to do with the property since they owned it. Further, they said the sale of the property would go toward paying off the loan. As a result they had to sink lots of money into repayment as well as other consequences.
Solution B: Education and Fighting Back
I’m a branding expert, not a money expert. Other side of the brain. However, were I in the situation, I’d fight back. I’d call the attorney general. I’d reach out to local news stations for an exposé. They’d love the angle of money hungry company taking advantage of a local landmark and treasured community gem. I’d report the loan to anyone and everyone who could hear and help me either get out of the loan or at the very least refinance it into something I could manage even if it was for 30-40 years. There are other businesses that have made million dollar mistakes and are still here. It boils down to educating yourself rapidly on what you don’t know so you can still have a business tomorrow.
The firm owned the property which means they can leverage it. By the pictures it looked like they had rental units. If not, I’d convert them and turn Problem A into Solution B. My firm is in the middle of a hot market. People will always need to rent which means people will still be interested in renting my place. I would use the rental income to pay off the loan quicker or leverage it for approval for a refinanced loan. Then I’d simplify both my life and business expenses and live off the revenue from either the funeral home or rental income, whichever was lower. If I had a house I’d move into one of the units at the funeral home and rent my space out. This isn’t a time for comfortability. It’s a time for dramatic, out-of-the-box ideas to keep my firm, which has been around for 60 years alive.
Solution C: Education and Outreach
With churches, hospices and other spheres (businesses that share the same target audience but don’t compete with each other for business) I would reach out to all of them and see what programs we could create to help leverage each others’ businesses and organizations.
I’d also start a Google Adwords campaign and content marketing since that’s how most people today find businesses for the services they need. Who is the expert in my area for what I need? Even to this day I still encounter families that say this is their first time planning a funeral and are overwhelmed as to what to do. Start a blog, a YouTube channel and pump out content that provides valuable information they can use when they lose a loved one in death. We all know no one wants to talk about death, it’s a stigma until it happens. But when it does if you’re doing content marketing you’ll be the first one they think of. That’s how you get business. It amazes me to this day how many firms are not doing content marketing or even worse they are marketing but not tracking the results so they know where to spend their budget wisely.
These are just a few solutions to help keep their firm alive. Unfortunately, it’s too late for them but not for Case Study Two.
Case Study 2: Local Firm
The owner had relocated from out of state and bought the firm from a Funeral Director that was retiring. His place was huge, but old. The retiring director had a lot of interest from others, but ultimately went with the relocated funeral director. He said he fell in love with the place and perhaps it was his passion for the location that made the retiring director go with him. Since acquiring the place he’s had a serious uphill battle.
Problem A: Stiff Competition
His main competition does literally, three times more service calls than he does and is actively trying to drive him out of business. He mentions that while he’s active in the community, there’s a good ole boys club going on.
He also mentioned that people in his area tend to stick with firms that service their race.
Solution A: Be the Real McCoy
Again I believe that’s not true. If you can solve my problem then it doesn’t matter who you are. Race nor good ole boy makes a difference. When it comes to choosing a business it’s literally, “Who’s the least risky solution for my problem?” Let me tell you the story behind the phrase, “the real McCoy”. Elijah McCoy, a black inventor, created an oil drip cup system used in locomotives back in the late 1800s. Many knock offs came, but all were inferior. This would cost companies thousands of dollars and time fixing what an inferior product broke. As a result when they were requesting the oil drip cup system they would say, “Get me the real McCoy.” The Funeral Director here needs to be the real McCoy so that anyone can see he’s the least risky source to help solve their problem, and that is—give my loved one an honorable send off. He’s not the least risky option because of his next problem.
Problem B: Aging Facility
His facility has what many desired, a chapel inside his funeral home and a very large parking lot to accommodate them all. His facility is huge in fact. He could easily hold multiple wakes at the same time comfortably. But it looks and smells old. In trying to get new business someone was forthright and said to him that her father worked really hard through his life to provide for them and they wanted to give him an elegant send off and his facility didn’t look like he could do it.
Solution B: Listen to your Target!
You need to look like you’re on the same level if not bigger than your competitors. I remember reading a proverb from branding agency, Proverb (pun intended), who said, “If you can’t judge a book by its cover, someone dropped the ball.” If your potential families look at your place and think small, walk through your place and see old then you’ve lost. There’s a difference between old and vintage. People want vintage, not old. Before doing any marketing I would focus on a facelift of the facility so that when people walk in they feel like they came to the right place. In trying to accomplish that he has his next issue.
Problem C: No Budget
We all know we have to spend money to make money. Fortunately, we live in a time period that we don’t have to spend much to make much. If you don’t have the budget to hire someone to give your place the facelift it needs, then do it yourself. There are two kinds of equity to leverage in any situation: cash or sweat. He had the latter and the time to do it since he wasn’t doing many services. What you don’t know how to do there’s YouTube. What looks too serious to handle on your own save and hire someone else to do. Try bartering services. Again people, business closure is serious, think outside the box. They say in self-defense everything is a weapon, from your pen to your keys. You’re fighting to keep the business that you love with a passion from closing. Use everything to your advantage.
Since you don’t have money to market traditionally, you have to do guerilla marketing, also called grass roots marketing. Get those boots on the ground and get your face in front of people. Give them a simple pamphlet, which you can print in-house. It will introduce your funeral home to them and why they should go with you. The more people see you, the more they want to give you business.
The firm has a long road ahead but fortunately, he’s still here which means there’s still something he could do about it. That’s the same with all of us. Each day we breathe is another day, another attempt toward solidifying our marketshare. There’s truly enough to go around and more will go to you if you learn the lessons from the closed firms of days past. FBA
Originally published in Funeral Business Advisor, March/April Issue
