t
en Your Be t h g l Ti
Increase your profits
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By: Christopher Kuhnen
merican funeral home owners are troubled these days, and for good reason. Funeral home profit margins have been steadily declining. The reasons are many and too involved to get into in this article. Federated Funeral Directors of America in Springfield, Illinois, which is owned by Fiducial, reported that in 2012, its clients saw average funeral profits for “regular adult funerals” stand at 6.1%. Do not get too excited because the long term profitability trend is not so good. It was not all that long ago (1992) Federated clients reported profits of 8.7% and higher. Are you aware that there are some funeral homes across the country that in 2012 achieved a 13%+ profit margin? Suffice it to say, increased profit margins are not only attained by how much you sell, but by how much you keep. Are you keeping your fair share? You can begin to turn your declining profit margin around by following these common sense suggestions. Here are just a few to get you started today: Through comprehensive, reduced-cost energy assessments and energy improvements, funeral home owners typically can save 20% or more on monthly energy bills. Proper insulation is probably the single most important step you can take to conserve energy, especially in funeral homes that are in buildings over 30 years old. Most funeral homes need a free ventilating opening equal to 1 square foot for
Summer 2013 | The Independent | www.ogr.org ®
every 150 square feet of attic floor area. Adequate ventilation is necessary to keep insulation, paint, and roofing materials free from trapped moisture and heat. According to the Department of Energy, 38% of a business’s energy loss is because of underinsulated attics, as opposed to only 16% loss on the part of doors and windows. Proper insulation can provide average annual savings over $400 every winter, leading to a payback period of three to five years. Heat Recovery Ventilators: This mechanical ventilation system allows a continuous supply of fresh air to get into the funeral home and improves climate control in the whole building. HRV’s are typically tied into existing duct work, and installation costs vary, depending on the size of the HRV. Over their 15-20 year lifespan, their standard efficiency is approximately 70% recovery. Tankless Water Heaters: Why should the water that you use in your funeral home be heated all the time rather than only when you need it to be heated? That is the concept behind tankless water heaters, that is, heating water only on demand. These heaters can be installed in the same place as your traditional water heater and they are typically smaller in size, resulting in a space savings. The highest rated tankless systems are 98% efficient as compared to 67% efficient for new, traditional storage hot water heaters. Like other mechanical systems, they do tend to wear out in 10-15 years.
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