This time of year is again ... planning time.
This happens every year. Business slows down around Thanksgiving, and we take on the Christmas season. I like this predictable cycle because it gives me the opportunity to focus on my family and the spirit of the season.
As soon as we scored January, all the features break, as many owners of the funeral homes suddenly decided that they were not satisfied with their 2010 numbers, and it was time to develop a new plan.
This year I received the first email “I need some kind of strategic assistance” in the New Year!
Even when the economy was moving a little, in 2010 there was another year for most funeral homeowners. If their call volume was good, the margins were still less than they wanted, and the bottom line suffered.
It's pretty obvious ... it's time for a new plan.
In this article, I will describe five myths about strategic planning that are common to owners and managers of funeral homes.
Myth number 1 - families have no money
There is no doubt that the economy has damaged many families. Rising unemployment, the ups and downs of the stock market and the collapse of the housing market have joined together to destroy the nest egg of many families.
Why, then, the average amount spent on a wedding in 2010 is $ 2,785? This is 100% more than in 1990.
Why, while Chrysler and GM were in bankruptcy, were luxury car sales such as Ferrari and Rolls Royce all-time high?
The reality is that in some families there is no money. But terrible families have a lot of money, they just do not understand the value of visiting and memorial service, so they will not spend their money on it.
The fact is that designing your business, suggesting that someone has no money, is a big mistake. There are many more people with money, and one of the goals of strategic planning is to figure out how to get as many of these people as possible into your funeral home.
Myth number 2 - If I just give this time ... business will return
This is sometimes called the ostrich approach to business management ... stick your head in the sand and hope that the problem will disappear.
I believe that the market for funeral services has fundamentally and irreversibly changed over the past decade. This change is primarily due to the fact that baby boomers make decisions at the conference.
The basic character of a baby boomer is that they always challenge traditions. They did this in the 1960s, 1970s, and today they continue to challenge traditions.
The main problem is that most baby boomers do not understand the value of the funeral service. If they do not understand this ... they cannot accept it ... and they will not spend money on it.
Very few businesses have the right to dictate the direction of the market (nowadays Apple is one of the rare exceptions). The rest have no choice but to constantly reinvent themselves to meet the changing needs of our target market.
The first baby boomers are 65 years old, and there are 76 million more. It will take 20 years for this wave to go through the funeral.
You could schedule just giving him some time. But the best plan may be to figure out how to serve the baby boom market so that your business will survive to see the next generation.
Myth number 3 - I just need to plan my advertising budget.
Well, you could ... but you probably ended up spending the money.
Many business owners believe that marketing and advertising are one and the same. It could not be further from the truth.
Advertising is a small subset of the overall marketing process. Advertising work is to make your phone call. But marketing is focused on the entire income generation process. You are not making money because someone called your funeral home. You earn money only if you truly serve the family.
I like to start any strategic planning meeting asking for numbers. How many times did the phone ring? How many of them became a call to your company? How many of them will want to visit and / or memorial service? How many of these families referred others to your funeral home?
Studying these numbers tells you where the biggest problem exists.
Instead of planning your advertising budget, you really need to plan each step in your marketing process, and then determine what budget you need to support the entire process.
Making your phone call is a good first step ... but he is not going to pay you a mortgage.
Myth number 4 - All I need to do is copy the industry leaders
Each industry has its own leaders. There are several successful private firms in the funeral home market that serve from 1,500 to 2,000 or more families each year and enjoy a very respected and profitable business.
Being recognized as leaders in the funeral home market, these firms are scrutinized by the rest of the industry. Every movement they make is copied dozens or hundreds of times across the country.
In this process, there is one critical flaw ... that works in St. Petersburg, Florida may not work in Racine Wisconsin. And what works in Columbus Ohio probably won't work in Portland Oregon.
We like to think of ourselves as a melting pot, but the reality is that we are far from uniform. Of course, there are many similarities, but there are also many significant differences. This is especially true when it comes to how the family deals with the experience of death.
Direct cremation rates vary from state to state. But they also vary from city to city and even from neighborhood to neighborhood (especially when you consider the preferences of different ethnic groups).
Copying industry leaders will only work if their market and your market are identical. Otherwise, this is a recipe for disaster.
Leaders are successful because they have developed and implemented a strategic plan specifically designed for their local market. This may be a great plan, but you still need to customize it to be successful in your market.
Myth number 5 - Strategic planning can only be done at a resort.
Why do well-proven funeral bureau marketing firms only exacerbate the situation by encouraging their clients (i .e. You) to combine their strategic planning with their holidays?
Don't get me wrong, I LOVE a good vacation. I also like when I can make part of this tax deductible by combining it with an educational event (this is not tax advice, consult your cpa).
Learn a little in the morning, join the family on the ski slopes in the afternoon ... it's not a bad way to spend a few days. The problem is that this is a terrible way to do strategic planning!
An effective strategic planning session requires three important elements.
First, it is always better to do planning with the help of an external intermediary. When owners try to do this on their own, or with their management team, they always get caught up in the details of one controversial topic and never complete the planning process.
The second important element is that the facilitator must have a game plan or agenda for developing a strategic plan. Creating a plan is a step-by-step process of clearing your target market, analyzing this market and developing your business model to ensure the value of this market with reasonable profits. Then you must define a marketing message and implementation strategy that will attract the right families to your funeral home. Without a game plan for meetings, you may have good ideas, but you will never get a complete strategic plan.
The third element of successful planning is that participants need to be able to focus.
You absolutely MUST be able to focus on your business without interruptions in order to develop a new strategic vision and plan for you. As Michael Gerber says in his book “E-Myth,” it’s time to work “for your business” instead of “in your business.”
The vast majority of funeral home owners that I have met consume in their business; meeting with families, provision of services and personnel management.
To create a strategic plan, you must work on your business; studying your market, developing your message and determining exactly how you will deliver something valuable to your customers. Since this is not what you do every day, it will require a focused effort.
When I’ll work alone with the client, I usually suggest a two-day planning session from the site at a nearby hotel or conference center. The goal is to take you away from your funeral home so you can focus on the planning process, rather than be distracted every time you hear a telephone ring. I like touring in your funeral home so that I can better understand your business, but we should only have a meeting there if you have a really private area where you will not hear phones.
I organized strategic planning sessions at resorts, and it just doesn’t work. All participants begin with the best of intentions, but by the middle of the day they think about what their family does outside the room and plan their evening.
You can take your facilitator with you, he or she can bring a proven process with you, but expecting your management team to focus for two days in this environment is unrealistic.
To remind ... five big myths about creating a strategic plan for your funeral home ...
Myth number 1 - families have no money
Myth number 2 - If I just give this time ... business will return
Myth number 3 - I just need to plan my advertising budget.
Myth number 4 - All I need to do is copy the industry leaders
Myth number 5 - Strategic planning can only be done at a resort.
Your mission is to serve families in due time. But you cannot do this if you are no longer in business.
I recommend you develop a new strategic plan for your home-based business as soon as possible. It is time to work "in your business" instead of "in your business."
