The Benefit of Private Ownership

The Benefit of Private Ownership

By Rick Allen, Collin LIVING WELL Magazine

In the late 60s and early 70s the funeral industry began an era of consolidation. A third generation funeral director from Houston, Texas had the idea of clustering funeral homes together for the benefit of operating efficiency. He felt if several businesses could share certain services and costs, it would make the group as a whole more profitable. So, he began purchasing funeral homes in the greater Houston area and operating them in this fashion. News of his business model spread and his acquisition strategy became more aggressive and before long, many well-established funeral homes across the state and eventually across the country sold their business to his company. Today, his business is traded on the New York Stock Exchange and operates over 1,500 funeral homes and 400 cemeteries in 43 states, eight Canadian provinces and in Puerto Rico. You cannot argue with success. But, does success in business translate to quality customer service at the point where it matters most where funeral service is concerned? The best answer to that question is “possibly.” The follow up answer is “but probably not very often.”

You see, companies that use the public’s money to operate on are required to answer to the public – their shareholders. People who invest their money in the public market expect to make money, and to continue to do so over a long period of time. Unfortunately, serving families during their time of need when someone has died cannot be solely focused on how their loss can translate into your company’s profit. This is where what I call the “big disconnect” occurs between families who have lost someone and the big Wall Street owned funeral homes. Public owned funeral homes must produce profit, even when the volume of families they serve has declined or the type of business they provide changes from their original model. Many of the funeral homes who sold to the “big guys” no longer have the former owner involved in the operation of that business, so the goodwill within that community has been eroded. This takes the brand loyalty away and families often are looking for an alternate provider. When you couple this with the fact that cremation is growing more and more popular in markets where traditional burial services have been the standard, the task of growing profits quarter after quarter becomes increasingly difficult. Oftentimes, the only answer is to raise prices and cut service. This is hardly a way to operate a business where the lifeblood of the business success is directly tied to offering quality service at a fair price.

If you have pre-planned and possibly even pre-paid for your service at a funeral home where the ownership is different now than it was then, give us a call. You do have options. If you are interested in learning more about the benefit of dealing with a privately owned funeral home, stop by for a cup of coffee or a cold drink and I will be happy to personally discuss this matter with you further.

Rick Allen is the owner of Allen Family Funeral Options. Visit their informative website at to learn more or give them a call at 972-596-8200.