Our Board of Directors for a nonprofit called Array of Hope was recently asked to decide how much to pay our Executive Director.  It was a bit tricky (not as tricky as insurance assignments but…).  Funeral Home owners probably struggle with how much to pay themselves too.    As a funeral Home Owner, you have the responsibility of deciding how much is right for you and your business.

You will need to earn enough from your funeral home or cemetery to cover your personal expenses and retirement, without requiring unnecessary financing for your Home. The answer will be different for every funeral director, but here are some topics to consider.

How Much is a Funeral Director Worth?

When we decided on a salary for Array of Hope’s Director, we researched what competitive salaries were in the marketplace.  We also compared earning capacity for this position and experience with other businesses of this type.  You can find what other Funeral Homes are paying their Director and other functions such as “Funeral Home Director”, “Funeral Home Manager”.  Search Indeed.com, and other employment sites for reference.

How Much Can Your Funeral Home Afford to Pay its Owner?

Even funeral directors want to make as much money as they can (surprised right?).  Start by looking at where you can improve.  What are your accounts receivables?  Are you accepting insurance assignments?  Are you able to convert your receivables into cash by having Trinity Funeral Funding process and fund your insurance assignments?  If so, you have forever converted your receivables into cash, a big cash win for your funeral home.

Next, take a look at your business as if you were buying it.  Look at what the total financial benefit is to the Director.  Then subtract necessary funds for capital improvements such as limousines, building improvements, equipment, etc.  What is left might be in the ballpark of where your funeral home can pay.

Do Funeral Home Directors Retire?

Every funeral director / owner must have a retirement plan. The amount you’re able to save can depend on how you pay yourself.  The owner salary has a direct impact on retirement savings.  For example, if a funeral home owner has a SEP IRA, 25% of his compensation can be contributed.  A lower salary will reduce the possible contribution.

Having a good insurance assignment funding company on your team is essential to maximizing insurance and increasing revenue and profit.  Funding companies are generally very knowledgeable; they verify and fund thousands of policies and many fund your funeral home the same day.  For more information visit http://www.trinityfuneralfunding.com/ or call Cristina Terc at 201-750-1117.