Are you getting close to retirement?

Andy Rumph • January 16, 2020

If you are planning to retire in the next five years, you need to be planning now. If you are looking for an employee or someone from outside to buy your business, you need to make sure that it is sellable. What does that mean? Can you sell it and get the price out of it that you want and retain enough after taxes to enjoy life?


What determines the amount you get to keep for retirement? Obviously, first is the sales price. If you want a price on the high side, it is most likely that you will need to assist with some or all of the financing of the business. If you don’t want to finance, then you will be on the lower side of the valuation. If you are expecting your buyer to get outside financing for 100% of the purchase price, lenders will only lend on a percentage of the value of the business. 


It’s possible to achieve a higher price and only carry a small percentage of the business, but plan now. Get your books in line so that the profit and owner benefit of the business allows the prospective buyer go to a lender and get satisfactory lending. 

Secondly, you will have to minimize your exposure to capital gains. Planning ahead can better position you to retain more of your sales price. 


Finally, should you be willing to finance all or a portion of the business, you can charge an interest rate that most of the time is higher than what a bank would charge. For most owner carry deals, the rate will vary from 5.5% to 8% depending the overall structure of the deal and the creditworthiness of the buyer.


A good place to start is a valuation on the current state of your business. Decain offers a free valuation, so you have nothing to lose. As always, all of our communications are confidential. Click here to inquire, or fill out our contact form, below.

More Posts

By Andy Rumph June 18, 2020
Advertising is expensive. Plus, how do you even know if it works? Honestly, some will show obvious return on investment, but others will be hard to gauge. Some will cost you money, while some will simply take your time. Both are hard commodities to let go of, especially since the funeral industry is demanding so much of your time. Once, an obvious option was the newspaper. Granted, we cater to an aging population, but just look at the newspapers going out of business. Their readership is continuing to decrease and they are either being merged with other larger companies or going out of business altogether. One option here is to let the local paper know when you have a unique service that you are hosting. We see all the time where a funeral home serving a family is doing something out of the ordinary. Little boy with superheroes themed funeral, golfer who had memorial at the golf course, veteran with no family had huge attendance because the funeral home made it known. Don’t be afraid to put it out there. Let your obituaries be the talk of the town. I sadly admit that when I wrote them for families, a lot of the times I followed my usual layout and kept them simple. On the ones that I took extra time, I involved the family more and asked the right questions to better get to know the deceased. I wrote more meaningful interesting obituaries. Your community pays attention. Don’t think they don’t! Social media is a great place to spend some dollars. Facebook is a great way to let the community know what you are doing. You can do regular posts on what you are doing to serve families different than your competitor. There are tools to help with advertising an event, to get more “Likes” or followers or even “call to action” posts. Community Events are a great way to keep your name in front of your community. Veteran events especially are great exposure. Assist with putting flags on graves for Veterans day or wreaths for the holidays. Need help brainstorming? Call DECAIN and let us help. Click here for more information.
By Andy Rumph May 18, 2020
If your answer to the above question is “YES,” then you need to be asking yourself why. Don’t wait to address this as it could be that waiting will allow your competition to pass you by. If you have seen any significant drop, all is not lost, and you can still adjust and make your death care business remain relevant and competitive. No doubt the cremation rate has changed the business for everyone. How (or how you don’t) embrace it could decide whether you stay in business or not. In small rural America, the cremation rate is half that of larger areas. Do not be fooled by that, because it will catch up. If you have done things at your funeral home in the same way since your grandfather ran it, then likely you are not open to change. If your call volume isn’t decreasing but your revenue is, then you will probably still need to make adjustments. Let’s face it, you don’t want to be putting in the same effort for less money. There are things you can be doing to help stabilize the income your families generate. I have friends that own 20-30 call funeral homes and are still making a living, but they still have 20% cremation. I don’t think that will be true when their cremation rate jumps to 50%. At that point, they will face tough decisions. Do they want to work for less, sell to a competitor, or buy out their competitor? Other options include diversifying into other markets, such as a flower shop. DECAIN offers coaching to explore all of these subjects and will help your business create a plan to stay out in front of the issues. Call for a free initial confidential discussion. Click here for our contact information.
By Andy Rumph April 18, 2020
Let’s face it, the world is changing and technology is hard to keep up with. If embracing technology isn’t something you have caught up with, it may be time that you consider the option. In a different blog, I talked about decreasing call volume and annual revenues. What if you could increase both call volume and annual revenues by implementing just a few new technologies into your business. Don’t believe you can do that? You can, PLUS you will likely reduce the amount of time you work each week by automating some things in your work process. In my time as a funeral homeowner, we introduced several technology products into our offerings. By doing that we increased our average sale per family by $200-300. Now, if you are serving 100 families per year. That is $20,000-$30,000 in extra profit per year. I am not advocating any one product or service, as what worked for us may not work for you. But there are products out there that your families would embrace. Especially when more and more families are choosing to personalize services. There is also technology that will help you manage more tasks with less effort. If you were like me, the one area I needed more help in was aftercare. Sadly, we did not maintain an ongoing presence with the families we served as well as we should have. The good news is that there are products and services out there that can do just that. If you are not keeping your name in front of your families, trust me, someone will eventually work their way into your families’ hearts. Loyalty and tradition are two words that do not mean much anymore. Let DECAIN help you explore options. We offer coaching for owners in the death care industry. As always, our first conversation is free, so you have nothing to lose. We maintain strict confidentiality. Click here to contact us.
Show More
Share by: