American Funeral Director: Succession Planning

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What Will Life Look Like after Funeral Home Ownership?

[By Jason Widing]

What I love most about my job at Foundation Partners Group is the opportunity to meet some extraordinary business owners. I love walking their properties and getting to know their stories.

Partnering with these entrepreneurial men and women to help them make some of the biggest financial decisions of their lives is a privilege. Former owners are the lifeblood of the Foundation Partners network, and we are extremely flexible in accommodating their needs and desires.

This may sound obvious, but the key to succession planning is having a plan in the first place. You’d be surprised by the number of business owners who base their future on assumptions. The adage “failing to plan is planning to fail,” especially holds true when working in funeral service. The happiest former owners I know are those who started planning early and maintained open, honest communications with family and team members along the way.

Today’s environment is challenging, not just for business owners, but for the families we serve and members of our teams. More and more next-generation owners do not want to step into the shoes of their parents. While they are immensely grateful for the sacrifices their parents made over the years, many of them either do not want to take on the 24/7 responsibility or wish to pursue their own passions. Adding to this is the fact that the entire industry is experiencing a shortage of qualified staff and leadership. Many owners who built their succession plans around a family member or long-term employee taking over the reins have had to re-evaluate their options. This is where many of our conversations with owners begin.

The sale of a business is an emotional journey for an owner, and those emotions often surface during the sensitive process of negotiating a sale. Funeral service is not a just a job. For most owners, it’s a lifestyle – their identity. A tremendous amount of soul searching and acceptance go into selling a funeral home.

We work with three types of owners on a regular basis: (1) those who choose to sell and retire completely or take on transitional roles as brand ambassadors, (2) those who partner with us to expand their businesses or explore new career opportunities in a larger organization, and (3) owners who want to continue as funeral directors but would like to slow down, shed administrative duties and focus on caring for families.

Planning for Retirement

Like old soldiers, the transition of a funeral home owner from active service to retirement is often a gradual process. The best quote I ever heard came from former owner John Seitz, who, along with his son Jonathan, sold Greely, Colorado’s, Adamson Life Celebration Homes to Foundation Partners in June of this year. Seitz, who continues to work in the community as an Adamson brand ambassador, said, “I’m not retired but I’m not required.” For many owners we work with, this is a wonderful way to move from a career of 24/7 service to a rewarding retirement.

“I’m 70 years-old and ready to wind down vocationally,” Seitz said. “We considered how working with a larger company could help us to continue what we started and build it to a greater degree. We always thought Jonathan would become my successor but then decided partnering with Foundation Partners was a better way to go.”

Other owners have charted a more direct course to retirement. Mike Ammen, of Melbourne, Florida, who sold Ammen Family Cremation and Funeral Care to Foundation Partners in 2019, started his retirement two days after the deal closed. Five years earlier, when he decided it was time to begin his transition to retirement, he was surprised to learn that neither his two sons, nor two of his long-term managers, were interested in taking over the business. That set him on a three-year course to improve his bottom line that took him away from his family for 12 to 14 hours a day, seven days a week. By 2019, Ammen Family Cremation and Funeral Care was the leading provider of cremation and funeral services in Brevard County, Florida, and Ammen was ready to spend more time with his family. Today, Ammen enjoys visits with his two sons and their families and getting back into shape as a tournament-level racquetball player.

Poised for Growth

Seitz’ son Jonathan, on the other hand, has a clear vision for a long career in funeral service, beginning with an exciting expansion of Adamson Life Celebration Homes. Jonathan fits into the second category of owners we work with – owners who want to expand their business or explore career opportunities in a larger organization.

With nine funeral homes under the Seitz Funeral Services umbrella, Jonathan understands his market and knows how to grow it. “My dad and I built this business together. But when he was ready to slow down, I wanted other players around me who could provide operational support. We have always been customer-focused. Many families don’t want the traditional model with church services anymore. Foundation Partners understands this and has moved away from stereotypical funeral services. They embrace new ideas and a new approach, and that’s what we’ve been doing for the past 10 years. Our mission is to move beyond the status quo by reimagining what an end-of-life service could be to promote comfort and healing. We feel like that’s a perfect match with Foundation Partners. Our employees also are excited for the future and the growth opportunities that come along with being part of a larger organization. They’ll have more robust benefits and opportunities to move to other Foundation Partners locations,” he said.

New Career Opportunities

As Jonathan Seitz mentioned, the benefits of belonging to a larger organization are important factors for many business owners, including Michele Farley Williams and her husband John Williams, former owners of Farley Funeral Homes and Crematory in the Venice, Florida, area.

“Foundation Partners isn’t just investing in the future of the business, but also in the future of Farley employees,” Williams said. “We have bright people who are going places. Foundation Partners can give them the most competitive benefits and opportunities for advancement at an organization that is scaling to offer even better and more comprehensive services to our families.”

While Michele has retired, John has joined the Foundation Partners team as director of cemetery strategy, overseeing cemetery development across our entire portfolio. What advice would he give other owners looking to make a similar change?

“Making the decision for the right reasons, while surrounding yourself with professional advice is the best place to start,” John said. “Having a good, detailed plan is a must. There are many considerations that should be worked through that don't seem obvious as first.”

Back to Basics

The final type of owner, and the group that makes up about 70% of the owners we speak with each year, are owners who are looking to slow down. These owners are not ready to leave the business – they love serving families and their communities; however, they would like to hand off the 24/7 burden of ownership. They want additional resources to help them manage staffing, accounting, legal, facility upkeep and other day-to-day tasks that are necessary for operations but distract from caring for families. These owners wish to spend the final phase of their careers focused on providing compassionate care to families before they officially retire.

Wendy Kraft, who along with partner Laura Sussman sold Kraft-Sussman Funeral & Cremation Services in Las Vegas to Foundation Partners Group in August, continues to manage the business but is excited to free up some time by handing off back-office administrative duties to the Foundation Partners team.

“We look forward to taking a step back in some areas and carving out more time to spend with families and our community,” she said.

COVID-19 has prompted all types of owners to re-evaluate their situations, and many have chosen to accelerate their succession timelines. During the first seven months of 2021, Foundation Partners closed seven acquisitions, adding 12 new partner locations. Our network of funeral homes, cemeteries and crematories has nearly 170 locations in 21 states and serves more than 85,000 families annually. We are always in the market for well-run, community-focused, funeral service businesses with high cremation rates and agile leaders who share our vision of the funeral home of the future. It’s exciting that an increasing number of these firms are seeking us out.

Timing is one of the key factors that can impact the sale of your funeral business. Those who have been in funeral service long enough have learned that the future is uncertain. All anyone can do is live their best life and make the best decisions with the information in front of them today. Beyond the pandemic, the current political environment and economic uncertainty are fueling the desire to sell. Potentially significant changes to the tax code are on the horizon that could materially impact your net proceeds. While we don’t pretend to be Washington insiders, we are seeing many sellers who are eager to take advantage of today’s favorable transaction environment rather than waiting to see how future taxes and interest rates will impact their businesses.

Succession planning can be stressful, and it’s important to be informed about all your options. Foundation Partners is here to serve as a resource for business owners looking to retire, grow their businesses and expand career opportunities for themselves and their team members.

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