5 Ways to Increase Funeral Home Profits

You’re families are happy with the services you provide.  You help create beautiful send-offs for their loved ones.  You’ve handled the arrangements, transportation, clergy, insurance assignment funding and many other concerns.   So why is your funeral home having cash flow struggles or worse, have your profits fallen?  Here are 5 common cash-flow killers.  Your funeral home can address these profit areas and also keep your service levels to your families high.

1. Review Your Prices

None of your costs go down, correct?  Why should your pricing remain flat or go down?  Yes, easier said than done.  But here are a few tips: increase your product offerings.  Provide added choices for burial services, head stones, monuments, caskets.  Pass your cost of life insurance assignment funding on to your families.  Most funeral directors pass along the cost of funeral assignment funding and claim filings, anywhere from 3% to 6% to cover assignment funding benefits.

Solution: Review and adjust your rates every year. Pass your cost of Assignment Funding on to your families.

2. “Extras” Cost Your Funeral Home

During a funeral service, your beneficiary says, “We’re happy with the burial services. It would be great if you would just do this one extra thing”.  You want your family to be happy, and you’re so close the finish line, so you do add “one small extra thing” at no additional cost. But it still costs you time, and potentially other resources and expenses. That comes out of your profit.

Solution: Include a line item for add-ons in your funeral bill. Tell your client, “No problem, we’ll add a small additional fee to your funeral services invoice.”

3. Avoid Death by 1,000 Cuts

Until banned in 1905, death by 1,000 cuts was a slow form of execution and torture in China. Small expenses in your business can have the same impact. Small expenses seems irrelevant, like that first or second small cut. They add up, and can bleed your profits dry.

If your expenses aren’t tracked, and included in your billing, then they will be paid for out of your profit.

Solution: Track of all your business expenses, have your bookkeeper help.

4. Check Every Invoice (Yours too)

Discrepancies can cost you a lot of profit. Make sure you don’t overpay for someone else’s billing mistakes. Likewise, review each funeral invoice you generate.  Review it for errors and possible out-of-pockets that may have been missed.

Solution: Verify all your invoices in detail before paying. Verify all Funeral Service bills before providing to your beneficiary.

       5. Take Action Now

Not all cost cutting and revenue increasing measures can be implemented at once.  However, it’s time to take action. Pick one item to embrace within a week. Celebrate your success, and then move on to the next item. In a few months your funeral home can increase profits by addressing: assignment funding costs, adding line items for added services, reducing costs, stop giving away so many services for free and tighten up how you run your funeral home.  None of these measures should reduce the high level of service you provide.

Assignment Funding

Assignment funding is a simple process where a 3d party like Trinity funds the cost of your funeral services through an assignment of proceeds from an insurance policy.  Here’s how it works.  A 1 page insurance assignment is completed by the beneficiary and the Funeral Director, a claim form provided by either the insurance company or Trinity and a death certificate.  There are times where a funeral bill is needed as well.  Trinity Funeral Funding will let you know what is needed for each claim.  Once these documents are completed the policy is verified (normally within a day or two), funds are wired to your funeral home.  The payments from the insurance company are then sent to Trinity and any additional proceeds are sent directly to the beneficiary.  For more information visit http://www.trinityfuneralfunding.com/ or call Scott at 201-750-1117.