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The Tortoise and the Hare
image obtained from http://tx.english-ch.com

In the Aesop fable “The Tortoise and the Hare,” an overly confident and hasty, yet admittedly faster, hare assumes he will win a race against a characteristically slow tortoise with no problem. And with that mindset, the hare decides to nap in the midst of the race, when to his surprise and dismay, he awakes to find that the tortoise has beaten him thus coining the phrase, “Slow and steady wins the race.”

This phrase is often attributed to many facets of life, and in the business world, it can be inferred to mean that consistency and stability, not pretentiousness and haste, are what will fare better for you and your customers in the long run. An idea that goes hand-in-hand with our previous blog post . . . insurance companies such as Homesteaders Life may not be a fast, ostentatious hare but they are strong contenders because they are stable. They are consistent. And they are in it for the long haul.

So for PFP and Homesteaders, we are strong supporters of the tortoise because we stand for integrity, and we pledge to stay in the race until we reach the finish line. And what is the finish line for us? Happy, satisfied families who are relieved of financial and emotional burden because of our commitment to them.

But what about the funeral industry as a whole? Does this same concept apply to our industry’s overall revenue and margin growth?

IBISWorld, the world’s largest independent publisher of U.S. industry research, recently put out a study regarding the revenue growth of funeral homes and what we can expect to see in the future. According to this study, funeral home revenue has declined by .4 percent from 2007-2012, and profit margins dipped to 13.5% from 13.7% in 2011. Not a terrible decline but a decline nonetheless. And what does the study say is to blame? In a nutshell:

  1. Longer life spans
  2. Declines in per capita disposable income
  3. More cremations (a relatively new concept in our industry . . . sense the sarcasm)
  4. Indigent burials
However, the study also predicts a rise in the future, albeit a slow one. And who can we thank for this impending rise in our industry’s revenue?

BABY BOOMERS. This should come at little or no surprise because this is something we are all preparing for as funeral professionals. The influx of baby boomers in the future is expected to cause revenue to increase at an average annual rate of 1% over the next five years.

So, yes, it is a slow growth. But it is a growth nonetheless. However, with the gains anticipated from baby boomers, we shouldn’t just sit back and watch the 1% roll through our doors. We all should be thinking about what we can do to increase those gains to 2%. After all, the GDP is expected to increase at an average annual rate of 2.1% per year. How can we match that?

However, while we all should be striving to increase our annual growth, let’s not be discouraged by a slow growth in the meantime. Instead ask yourself, “Am I consistent? “Is there value in my services beyond what my competitors are offering?”

And most importantly . . . are you a tortoise? Or a hare?