Business Plan Funeral Services
Business Problem Proposal: Funeral Services Organizational Recommendations
The proposal which is to follow will concern an often unconsidered but fully essential set of services related to funeral arrangements and burial. As the economy changes, so too does this age old business. To my personal experience, as the field alters, so too must its practitioners. With smaller organizations such as the one with which I am affiliated, for instance, the discussion hereafter will speak to a pressing need to rethink business strategy and market approach in order to remain above water.
The funeral services industry has traditionally been founded on family-oriented enterprises. Funeral homes have typically been owned and operated by succeeding generations within one family, helping to stimulate a close relationship between such establishments and their communities. Due to the sensitive nature of the funeral service trade, its practices differ in many ways from those of other profitable businesses. Particularly, price-based competition is rarely employed as a business model. Another unspoken rule of decorum which governs the business is the general abstention from advertising which most funeral service enterprises will abide.
Since the 1980s, the funeral service industry has taken on a new form. The abstention from competition and the perpetual need for the services provided in all communities created a circumstance in which many funeral homes were operating beneath their potential and while simultaneously many were stretched thin by an over-saturation of business. This atmosphere prompted an industry move toward the consolidation of ownership, with large funeral service corporations assuming a dominant role in attempting to coordinate the world’s funeral service industry under certain standards of cost effectiveness.
Such is the environment that begat the “John Doe” funeral services corporation. Its central core of leadership initiated a business strategy for the corporation in the mid-80’s that centered around acquisition and expansion rather than traditional local market orientation, with the corporation spending the next decade expanding its operations to hold funeral homes and cemeteries all over the world. My interest in the business orientation of the field is especially served well by this model, which demonstrates a clear path outside of those traditional single-location family owned operations. The capacity for operational consistency would here be apparent.
Indeed, John Doe’s growth would be rapid and its success in meeting its original vision of constant expansion appeared to be assured. However, there is evidence that the company grew too fast to maintain a constructive path of augmentation. A view at its closest competitor, Anonymous Funeral Services, reveals a fundamental error on the part of John Doe’s leadership. The rapid increase of the company’s holdings recognized only the potential for great profitability in such expansion. It did not tailor its strategy of acquisition to integrate new holdings into a broader corporate culture, instead leaving them as disparate and decentralized strands of the company. This fell short of the industry-directed impetus on coordinating acquisitions to meet standards of cost-effectiveness.
Another issue, which shareholders expressed succinctly when they forced a change in leadership in the late 1990s, was that of the company’s public image, which some insiders believe did not recover from a mid-nineties public image snafu. This public image crisis delivered an impression of John Doe as conducting unfair business practices and using ethnic and racial identifiers to maintain a selective demographic. This was especially damaging to the corporation’s standing in many local communities.
This speaks to the largest issue facing the company which is that its operation has been losing money due its inability to keep its level of profitability apace with its level of acquisition and expansion. .
One tactic which has made the John Doe group unique in the industry is its recognition of the importance of community in the viability of individual enterprises. Its damaged relationship with the communities in which it has sought to operate can be rectified by aspects of its model which are already in place. Though the company operates thousands of funeral service establishments from a centralized point of authority, its acquisition strategy incorporates the families who have owned and operated the newly purchased assets into the business plan. As a result, John Doe’s holdings are hybrid entities, armed with the resources of a large parent company but endowed with the close community relationship of an independent business. Taking advantage of this model should be central to the company’s overall reversal of its negative public image. This will demand that the new core of central leadership make an effort to increase the role and visibility of family proprietors in individual locations while removing impressions of its own management role. The negative image of the corporation should play less of a role in its day-to-day operations due to its importance only as an umbrella corporation and not as an active member of the relationship between the funeral home and the community. This is a proposal that ultimately will seek to push John Doe in a direction of more silent management. A systematic reduction of corporate visibility in the communities of its operation will have the effect of stimulating positive community relations for individual establishments while removing from its holdings any lingering sense of hostility or distaste in the public. Certainly, it is also essential that those practices perceiving John Doe as being unfair or biased must also be aggressively rooted out.
The most pressing concern at John Doe is the company’s apparent inability to disseminate the advantages of a corporate framework to the benefit of its various holdings. It seems that the strategy of acquisition was only an effective one under the previous model for a fraction of its duration of implementation. At this point, it must make as its main focus the development of existing holdings. This demands not only the halting of any new acquisition efforts, which is itself already a significant reversal of the prevailing strategy heretofore, but also a reduction in costs through the sale of tactically selected holdings.
When key holdings have been identified, we can begin a phase of development that is centered around bringing a central coordination to the company. While the visible funeral service establishments will be identified within their communities by the families to whom they are operationally beholden, John Doe must instate unifying standards amongst its homes. Among these, the corporation must tailor prices to meet specific demographic and regional needs, avoiding a repeat of the difficult impressions delivered by its previously discrediting operations. Additionally and perhaps most importantly, John Doe must take on a strategy that is regional rather than community-based in scope with regard to corporate resource distribution. By allotting a fleet of limousines to a region of funeral homes rather than to a single home, for example, we can simultaneously improve cost effectiveness for a whole region and bring individual establishments into a more closely coordinated structure for collective viability.