Maintaining Positive Cash Flow On Your Merger & Acquisition

Maintaining Positive Cash Flow On Your Merger & Acquisition

Publications

Featured in Southern Funeral Director Magazine : May 2018

By: Deanna Dydynski, marketing & public relations manager

Acquisitions, mergers, partnerships, regional consolidation and other joint ventures are changing business and have become essential to gaining competitive advantages. These joint business collaborations have multiple benefits from obtaining quality staff and valuable assets to reducing competition and overhead costs. With various financial resources available today, the ability to increase market share and expand your business is more attainable than ever.

Once you merge with or acquire another business, there are multiple considerations which must be taken into account such as: company cultural dynamics, management and employee placement, company-wide communication, strategic business and marketing strategies and of course financial management. Successful financial modeling and management is essential for any business but proves critical especially for mergers and acquisitions. Modeling your financial plan during an acquisition or merger is key in projecting cash flow and profitability.

Positive cash flow is what keeps your business going, it gives you the capacity to meet your financial obligations along with flexibility to explore growth opportunities. Maintaining positive cash flow can be challenging especially in this profession, as multiple variables including seasonality and death rates make it difficult to predict business. An additional challenge this profession faces in regards to managing positive cash flow is customer payment. Traditional methods include cash, check or credit card however, with an average funeral cost of $7,000 and over 63% of Americans without $500 in their savings to cover an emergency (Forbes, 2016), families are looking for alternative options for funeral payment. While it is true that funeral professionals do not have to accept life insurance as a form of payment, most do, because three in five Americans have some form of life insurance. So, if your funeral homes or cemeteries are not accepting life insurance as a form of payment you are eliminating a large portion of potential business. Additionally, for funeral homes accepting life insurance as payment, but processing the life insurance assignments in-house, they often face several challenges from countless administrative tasks to delayed payments.

If you have acquired or merged and now manage multiple businesses, maintaining positive cash flow can prove to be even more challenging as you are now fiscally responsible for more than one entity. You need money to pay your employees, investors, suppliers, overhead expenses and beyond. Owning multiple businesses, adds additional challenges when striving to maximize the efficiency of your resources and employees. You risk maintaining positive cash flow and reducing employee productivity if you are processing life insurance assignments in-house versus using a professional funding company.

How can your businesses maintain positive cash flow, let alone operate when you are waiting 30, 60 and sometimes 90 days and beyond after a funeral service to be paid? There are over 800 insurance companies in the United States and whether you own one location or several locations, they will not discriminate and you will be waiting on payment. Your investors and your bank are not going to accept payment 30, 60 or 90 days later, so as a funeral home owner, why are you? You are not a bank, but every time you process life insurance assignments in-house you are essentially giving away free loans. As an owner of multiple funeral homes, you do not have time to wait on your money. Insurance assignment funding companies will not only obtain the receivables you are waiting on but they can help you maintain positive cash flow. Instead of waiting an extended period of time to get paid on your services, imagine having payment sent straight to your funeral home bank account within the same day. Imagine having money on hand to pay your employees and overhead costs. Imagine freeing your accounts receivables. Imagine getting paid on pending death certificate and coroner cases. Imagine having additional money to take advantage of supplier discounts and promotions. Imagine having additional money for your cash reserves. Imagine being able to invest and acquire another funeral home. Partnering with an insurance assignment funding company can make all of those “imaginations” come to fruition! I often hear funeral directors say, “This sounds great, but what does it cost?” It does not have to cost anything. A small processing fee is taken from the family’s life insurance benefit, so there are no out-of-pocket expenses for the funeral home or cemetery. A typical rebuttal to this I hear is, “I do not want the family to have to pay for this.” While it is the standard to pass the fee along to the family, funding companies do make it possible for the funeral home to absorb the processing fee if they desire to. Funding companies can provide the positive cash flow essential for your businesses and enable you to redirect employee resources to other value-added services.

In this profession, connecting with families and providing services second to none is essential for continued business and is what differentiates you from your competitors. For funeral homes processing insurance in-house, how can you expect your funeral staff to give families the attention they deserve if they have to sit on hold with insurance companies for hours, complete endless amounts of paperwork or have to call families back into the funeral home after a service to complete additional forms? There are costs to these administrative tasks and if you could eliminate those and position your staff to other areas of increased revenue streams, wouldn’t you want to? While all funding companies can improve cash flow, there are different levels of service each provide. While you are seeking a partnership with a funding company it is essential you partner with one that provides the fastest and easiest services and can eliminate the administrative claim paperwork portion of the process.

As a regional consolidator each of your funeral homes are likely paying a salary for someone, we will call her “Sally,” to sit on hold and complete paperwork. However, the landscape of this profession is changing and as funeral directors you are being pushed to your creative limits to expand your services for changing demands. Instead of hiring another employee to manage new revenue opportunities, what if you could utilize Sally and have her manage and explore new service options? Imagine eliminating nonproductive claim administrative time for a “Sally” at each of your locations, now you have an even greater opportunity to increase productivity and revenue.

Every funeral home and cemetery can benefit from using a funding company but for investors and owners of multi-location firms, the benefits are multiplied. In fact, a majority of funeral home groups and corporations require each location to use a funding company, for improved positive cash flow and productivity of staff.

You are an entrepreneur, investor and owner, you are not a life insurance expert and you should not expect your staff to be. Maintaining positive cash flow and effective utilization of resources is crucial for the success of your merger or acquisition. If you partner with a funding company that can provide 360 degrees of support, you will see first hand how essential their services can be for the success of your businesses.

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Marketing 2 Millennials

Marketing 2 Millennials

Publications

Featured in the Funeral Business Advisor: May – June 2018

By: Deanna Dydynski, marketing & public relations manager

Move over baby boomers, millennials have officially become the largest living generation and are also the primary demographic every brand is trying to charm. Effective marketing to millennials poses challenges for many companies, but if you can master some of these expert strategies you will be well on your way to attracting and retaining the millennial consumer.

*Spoiler Alert* I am a millennial.

Tip 1. Be Authentic: Half of the battle when marketing to a millennial is getting their attention, the other half is getting them to respond. Millennials spend an average of 25 hours per week online tweeting, liking, sharing, pinning, double-tapping and commenting on content-driven websites. We do our research and get our information from blogs, websites and social media platforms, because we trust the source. Millennials have an unusually strong nonsense detector, and majority of the time we can instantly tell when something is phony, fake or unauthentic. We “don’t have time for that,” and will x-out, skip, scroll and slide right pass content or messages that do not have authentic value. Millennials feel empowered to make their own choices and appreciate expertise but they are only influenced by genuine content from trusted sources. We want our interests to be considered and not our wallets.

Courtyard by Marriott hit the nail on the head with their most recent ad campaign, geared to target millennials. Rather than highlighting all of the services they offer; they focused on the passions and lifestyles of their millennial guests. The campaign’s commercial highlights a young woman traveling to multiple destinations for her profession. It shows her purchasing fabric in other countries, interacting with weavers in a rural setting, sketching on a coaster in a bar, while also staying at multiple Courtyard hotels. The commercial is narrated by her father who is explaining how proud he is of her for following her passions and proving him wrong when he said “work is clocking-in and clocking-out.” Ending the commercial is a message stating, “Passion moves us forward. It is how you think. It is how we think.” The commercial tells a story without selling, it makes one feel inspired and gives the Courtyard by Marriott an amazing brand perception.

How can you apply this marketing strategy to your funeral home or cemetery? The next service you have, really watch how the family reacts to every element of the funeral. What moved them? What seemed off? Listen to what people are saying and sponge all of this in. Funerals are naturally difficult to portray in a positive light because they are tragic times, but if you can capture an emotion of passion, love, sincerity or hope and portray it in a video, your service will sell itself, and you will appeal to the millennial generation.

Informative content marketing has been effective for hundreds of years. In 1895 John Deere introduced a free publication with dozens of farming tips called, The Furrow. The intent was to provide farmers with tips and farming techniques to improve their farming and become more profitable. The Furrow, is available in more than 40 countries and is offered in 12 different languages. Jell-O circulated free copies of a cookbook displaying creative ways to use the product in 1904 and saw an annual sales increase of one million dollars. In 1966 Nike released a 19-page booklet titled Jogging, filled with advice on enjoying running as a recreational activity and included specific running and posture tips. The booklet brought running as a sport to America and never once mentioned a Nike shoe.

Millennials are supportive of businesses dedicated to improving their customers lives with informative content but we want it in the form of e-books, blog posts and videos. As you apply this strategy to your funeral home, do not focus on how you can sell millennials on your services, instead create a blog or monthly video sequence with informative information about the funeral planning process, grief management, or a how-to-continually honor your loved one. Really consider every element of losing a loved one and incorporate this in your content.

Tip 2. Engage & Speak The Language: Traditional outbound marketing such as radio spot ads, direct mail campaigns, newspaper advertisements or pop-up web ads, are not effective to the millennial demographic. We view these as disruptive, annoying and unsolicited. So, what do millennials like? Millennials like engaging brands, that are creating educational, informative content without being pushy or broadcasting their services. Sixty-two percent of millennials say if a brand engages with them on social media platforms, they are more likely to become a loyal customer (Forbes,2017). Millennials trust brands that are connected on multiple communication platforms, so if your funeral home is no where to be seen on the internet, you have zero chance of reaching them.

It is not just enough to be engaging, you also need to speak the language of millennials. Creating content your audience would proudly share helps build the brand-customer relationship. Before you begin to push content, it is important you and your funeral staff brush-up on your millennial lingo. Taco Bell, found an ingenious way to communicate millennial slang to their executive staff with their “Word Of The Week,” which features popular modern-day words. Taco Bell assembled a team of employees in their 20’s to curate popular words, define and use in a sentence to distribute in company emails.

Example: Lit. adjective. Used to describe a certain situation, person, place or thing as awesome/crazy or just ‘happening’ in general.

Used in a sentence: “Taco Bell was so lit last night. I had to wait in line for 15 minutes before I could order.”

Taco Bell has done a phenomenal job engaging with its millennial consumers through their social media platforms and the key to their success is having the entire team familiar and learning the millennial language. One resource I would recommend you and your staff use to keep-up with millennial slang would be Urban Dictionary, which is an online crowdsourced dictionary that defines modern day slang words and phrases. As a millennial, Urbandictionary.com is my go-to for any unfamiliar term I cannot use context clues to figure out.

Tip 3. Create An Experience: Millennials just want to have fun! We crave an experience and find researching and browsing for a purchase more compelling than the actual transaction itself. Online exploration has become a form of entertainment, it is the new window shopping. Pinterest is the perfect example of how the journey of shopping can become a personalized experience. If you are not familiar, Pinterest is a social networking site that allows users to discover interests from weddings and camping to do-it-yourself projects and beyond, then you “pin” it to your digital “board” to share with followers. Pinterest works because it is personalized and engaging. Millennials are not loyal by default, they stay with a brand when the experience is rewarding each time. As funeral directors you know if a family has a positive experience they will come back. For the millennial consumer, creating a positive experience is essential because they are judging every time and will have no problem trying another brand or your competitor down the street if they did not enjoy their last experience with you.

A millennial is a sucker for brands that are improving lives, supporting the planet, giving back to communities or adding value. As funeral directors you are already connected and involved with your communities, so share your involvement on social media, recycle at your funeral home or start a donation bank for stray animals in your community. Trust me, millennials will love you for this.

Lastly, give away free stuff. T-shirts, pens, chip-clips, water bottles, koozies, pizza-cutters, put your funeral home name on it and give it away! Don’t you love receiving free things? Well so do millennials. As a marketing and public relations professional, I find promotional items and giveaways essential to connecting with an audience, because of the positive perception your brand receives along with the ability to be in front of your audience when you cannot be. It is rewarding and a great ice breaker when someone recognizes your brand because they just tightly closed their bag of Cheetos with your company chip-clip last night.

Millennials can be difficult to market to, but the more your brand interacts with them the better you will become at hook, line and sinking this young demographic. FBA