Succession planning is something all funeral home owners need to prepare for, but the thought of doing so can be overwhelming. We talked with Brian Semel, Partner at funeral industry real estate investment company Big Sky Capital Partners, who shared with us some succession planning basics and what owners should do to get started.

Q. What are the benefits of succession planning?

A. Similar to encouraging a family to preplan a funeral, there are numerous benefits to succession planning, including maximizing the value of business and property, avoidance of operational gaps, advance knowledge of needed resources, retirement, and family planning.

Having a succession plan in place is essential for reducing stress, setting expectations, and improving communication. Most importantly, by preparing for succession today, the overall financial health of the business is understood and future plans can be put in place.

Q. What are ways a funeral home owner can prepare for a succession event?

A. The most important recommendation is to ensure the financial health of the business is documented, including pre-planning contracts, at need case volume, revenue per case, other revenue sources, and expenses.

By ensuring an accurate and up-to-date accounting of the business financials is in place, the evaluation and validation process will be expedited and seamless. In addition, this helps with running and decision making in day-to-day business operations – regardless of the timing of a succession event.

Q. What are common succession options?

A. There are many options for succession planning outcomes, which can include funding for location improvements through renovations, expansion options, transitioning ownership to a family member, and selling the real estate, among others.

We find that many funeral home owners are amazed by the options available to them by properly planning for and identifying succession options.

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