What Companies Buy Funeral Homes?
If you are considering selling your funeral home or if you are concerned about who controls the top funeral homes in your local region, you might want to know what companies buy funeral homes. Who owns the funeral home can make a big difference in how the funeral home is run.
Often, in franchise funeral homes, the funeral director has final say over the procession and services, but they don’t get a final say in the pricing, the services offered, or how business is conducted at the funeral home. They are a franchise manager who is responsible for overseeing the daily operations and nothing more.
Who owns a funeral home can say a lot about the services and treatment you can expect from the staff. You might be surprised to learn that just a few companies run most funeral home franchises in the United States. It’s no wonder why so many funeral homes offer the same, somber funeral services across the board, making it difficult for families who want to shop around for the best deals and unique services.
The funeral home experts at BSF are dedicated to helping you get the best price for your funeral home when it comes time to sell, as well as providing counseling and advice to funeral home owners.
In this article, you will learn what companies buy funeral homes, what some of the largest funeral home chains are, and several unique funeral home business models to keep an eye out for as a buyer.
How Big is the Death Industry?
The death industry, including funeral services and death care, is estimated to be a $50 billion industry. This industry is expected to grow, reaching $68 billion by the end of 2023. These numbers are fueled by funerals that can cost anywhere from $3,000 to $20,000 depending on the location and the services rendered.
Of course, some projections predict that, while death care services may flourish in light of the recent pandemic, funeral home services will feel the financial pinch. As lockdown restrictions prevent families from gathering to mourn the loss of their loved ones, they are beginning to opt into cremation services, which are considerably less expensive than a traditional burial. [1]
“A simple cremation with a plain-Jane urn and no reception costs around $3,000. But an elaborate funeral with a big crowd, a mahogany casket, lavish flowers and an ornate tombstone could run $20,000 or more.” — Christopher Helman
Despite this change taking a toll on the funeral industry, death is still a certainty, but many people are beginning to look at death services differently. Many funeral homes can stand to make a few changes to rise with the upcoming trends.
What Companies Control the Most Funeral Homes?
There are 10 top companies in the United States that control most funeral home franchises in operation, and some of these companies may surprise you.
Some of the top retailers who control most funeral homes are casket supplies, and many of them are publicly traded on the stock market.
- Wal-Mart, one of the largest grocery chains in the United States, has helped begin an era of inexpensive casket sales online. The retailer has since become a leading supplier of caskets, shipping the caskets directly to the funeral home. Most caskets are also available under a payment plan to help families with financial difficulties afford a proper burial for their loved one.
- Service Corp International (SCI) owns roughly 12% of the North American death market. They own more cemeteries, funeral homes and crematories than any other company in North America. In addition, they supply a variety of merchandise including caskets, vaults and urns.
- Carriage Services Inc. is the fourth largest publicly traded entity in the death care industry and operates over a hundred funeral homes, and over 30 cemeteries in the United States alone. They provide a significant portion of the prefunded funeral and burial services by allowing individuals to purchase crypts, grave sites, mausoleums, and interment rights while they are still living.
- 1-800-Flowers.com is another company that makes the list, but it does not publicly own any funeral homes. Instead, it offers flower arrangements and sympathy bouquets, working directly with hospitals, florists, nursing homes, and funeral homes across the United States to make sending flower arrangements easy.
- Stewart Enterprises Inc. manages funerals and burials at double the average efficiency as other funeral homes. This company owns over 200 funeral homes and over 140 cemeteries across the United States. Most of the company’s available burial land is in Florida, Texas, and California.
- Matthew International is a memorialization manufacturer founded in 1850 that provides caskets, urns, plaques and other ways to remember loved ones. The largest portion of its yearly revenue comes from brass plaques memorializing human and animal loved ones alike.
Largest Funeral Home Chains
Each funeral home you visit will have different staff, a different funeral director, and a different owner. If you are visiting a funeral home chain, the owner may be several degrees removed from the daily operation of the funeral home itself, but the money still funnels backwards. The funeral director will have a limited ability to make special considerations and modify services, though it may be able to be done.
In most cases, if the funeral home is operating under a national chain, you can bet that it is Service Corporation International (SCI) that is at the other end of the purse strings. Stewart Enterprises Inc. also owns a significant portion of funeral homes in the largest states within the U.S.
The upside to working with a funeral home chain is that you can expect a certain quality of service from the director and staff members. Pricing structure remains fairly static, varying based on the specific region’s economy, but you can also expect a similar structure to all services no matter which SCI-owned funeral home you visit.
The downside to working with funeral home chains is that you can also expect the service to be largely impersonal, and you won’t be likely to find unique, contemporary services that you might be able to find at a progressive Mom and Pop funeral home. Prices at chain funeral homes tend to be significantly higher as well.
Unique Funeral Home Business Models
Funeral directors who are looking to compete with these larger corporations for a share of the death industry may want to consider looking into unique funeral home business models that cater to the younger, more democratic crowd. As the years go on, more people are beginning to think about funeral planning at earlier ages, which can be an easy market to capitalize on. [2]
“In the end the funeral business is just another business. You need to do the advertising, connect to customers and deliver the best quality.” — Patrick van der Pijl
Some of the top funeral home business models do not require you to perform burials; that’s just what happens on the consumer side that supplements the main bread and butter business. It is what you do on the backend of the business that makes all the difference in today’s competitive world.
Private Equity Funeral Homes
Private equity funeral homes operate under the support of a funeral home investor who is willing to provide capital based on the company’s performance. This type of investment is not publicly traded and is general arranged as a limited partnership.
Private equity investments are available to accredited investors who wish to directly invest in a private company or perform buyouts of public companies to delist that entity.
Funeral homes that engage in private equity funding must be open to restructuring the business based on an investor’s benchmarks or, if applicable, board decisions.
Public Stock Trading
A public company is a company that is publicly traded or held, meaning they are owned by shares of stocks that are intended to be freely traded in a stock exchange. These companies open themselves up to the general public, providing funding for future growth.
This is an option only available for companies who are of a significant employee and revenue size. Typically, this criterion is reached when the business reaches $50 million to $100 million in revenue and continues to project growth potential, though there is no set revenue benchmark. The funeral home owner must be confident in the business’ ability to grow margins to keep stock purchases desirable.
Funeral Homes Services
For those who are interested in buying into the funeral industry, or perhaps looking to get out of funeral home work but still want to provide services in the funeral industry, services and manufacturing is an option.
Manufacturers such as casket and urn manufacturers, typically work with funeral homes, nursing homes, and hospitals directly to supply necessary supplies in the funeral process. This side of the funeral business is much more transactional and does not rely as much on providing customer-facing services, though the owner will still need to make business-to-business connections.
Looking to Get into the Funeral Industry?
Whether you’re looking to sell your funeral home and get into a different area of the funeral business – or want to get out of it entirely – BSF is the leading choice for funeral home connections and advice.
4BSF provides funeral home financing, connecting buyers and sellers together and providing funeral home loans. Buy, sell, or finance your funeral home with trusted staff members who have been in the business for decades, providing you with expert support and advice.
“The most successful funeral home transactions happen with an organized and efficient process. You want the transaction to be smooth and confidential so there’s no disruptions in service.” — Matt Manske, 4BSF
When it’s time to say goodbye to your funeral home business or buy into the funeral home industry and help build onto someone else’s previous work, 4BSF can help you make the right choice for your business.