Key Factors that Affect the Value of Your Funeral Home Business
August 28, 2017
Many funeral homes will have a combination of both positive and negative factors that affect business value—all of which are taken into consideration during a professional business valuation by a CPA firm. The following summary provides a broad overview of the factors that may move the needle up or down when it comes to the valuation of your funeral home business.
Factors that have a positive influence on market value:
- Strong sales mix and local awareness
- Located in a relatively major population center
- High quality, committed management team (if they have non-compete agreements, even better)
- Stable and significant market share, and/or consistently growing market share
- High volume—Industry experts say any number of clients greater than 300 per year puts you in this category
- Relatively new facilities that do not require immediate capital investment
Factors that may have a negative influence on market value:
- Declining market share
- Client volume of less than 300 per year
- High cremation rate or a cremation rate increasing faster than the national average
- Poor financial statements
- Any history of fraud or other financial problems
- Outdated facilities in need of capital investment
- Poor management team
- Strong management team without non-compete agreements
The factors listed above provide a brief overview of the market and other forces that may impact the value of a funeral home. If you are considering selling your funeral business or acquiring a new one, contact us to learn more about our business valuation and advisory services—designed to help you move the needle up in terms of business value.
Back to List