Dale and Michael Espich are extremely pleased to bring back and re-introduce to a select group of Successful Michigan Owners the 21st Century version of The System developed by Dale over forty years ago.
Today's Successful Business Owner is the first to appreciate how incredibly important is the MANAGEMENT CONTROL that comes with ANNUAL BUSINESS PLAN coupled with the MONTHLY MANAGEMENT REPORT.
The more successful an owner the more they especially understand the huge complexity of calculating the correct and needed pricing for 20 or more types of services/merchandise necessary to cover all expenses PLUS the amount also needed for PROFIT/CASH FLOW.
Successful Owners also will have also FOUND THE SOLUTION TO CASE VOLUME UP/DOWN SWINGS.
Explanation of Annual Business Plan:
A Quick Snapshot for a Better UNDERSTANDING OF
(Each word has a very special meaning)
The word "PLAN" specifically signifies that The document is carefully and precisely conceived. It is truly PLANNED.
Service and Client Family Satisfaction is the very special product offered by our Clients. However, the Client's financial viability is determined by the level of expertise in their "BUSINESS" practices.
"ANNUAL" is a gentle reminder that the constant Changes occurring daily in funeral service mean that a fresh NEW PLAN - carefully conceived and prepared - every 12 months is a Must for that Long Term Financial Viability.
The Annual Business Plan is made up of Three Component Parts: |
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INCOMEless ALL COSTSequals PROFIT |
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(Yes, that is the way a P & L ALWAYS works - BUT, this one is special - Please stay with me. Because the INCOME in funeral service is special and different it needs special explanation and attention. Let's do COSTS and PROFIT first and come back to a detailed look at INCOME.)
Profit is a carefully calculated/planned specific number in close discussion between Owner/Management. Considerations include:
A/R viability
Cash requirements
Returns needed on equity/assests,
plus Past Results.
CONSISTENT PROFITSWill Not Happen WithoutCONSISTENT PLANNING |
Now, let's take a look at INCOME PLANNING
For over forty years we have successfully forecasted funeral service income both in the preparation of 200 plus Funeral Home Valuations as well as in the experience of successfully negotiated $260,000,000 of funeral and cemetery sales transactions. We prepared over half of the valuations in the latter.
Almost the entire basis for the accuracy we have experienced in the above has been by conducting a very thorough, deep and precise dive into the exact income history contained in both family purchases and matching numbers in financials of the business.
The process is relatively simple and straight forward, but the process needs to be carefully and precisely executed. We have 40 years of Experience with the family purchases and associated financials of hundreds of firms serving from 50 to 2500 families.
It is that Experience we offer to clients who desire:
Better Control
Better Understanding
Better and Improved Profitability
The Understanding is gained though experienced research of family purchases and associated financials.
The following example for one single Income "Element" (service charge of Burial, Cremation - each type thereof) is the exact way we research a minimum of three years, further if possible.
The detail required for each and every Income Element is:
NOW we have a complete record of:
Each including service, merchandise of each funeral for that year - going back a minimum of three years.
Need ten years of accurate Total Case Volume including detail percentage of service type for each year. Client makes records available and we send in on-site a "Harvest" team to do the heavy lifting of going thru whatever the best source of above detail. We do the research at Client's convenience, but as soon as possible. The above is one initial step in Welcoming a New Client.
Before the above there needs to be a Complete Understanding of Relationships. The Client/Consulting "arrangement" is a matter of Complete Mutual Trust in which we want any chance of Misunderstanding to be Zero. To that end we need an extended on-site meeting with Ownership/Management so We have mutual knowledge and understanding of all service needs/desires, concerns, operating philosophy, any and all monetary considerations, etc.
CONSISTENT PROFITS
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The ANNUAL BUSINESS PLAN, along with the combination of The Tracking System furnished by the MONTHLY MANAGEMENT PLAN provides a GPS type guidance system to eliminate the pain of CASE VOLUME ANNUALY.
Explanation of Monthly Management Report:
"Game Changer" ‐ "A Business GPS"
"Easily Resolves Case Volume Swings"
In Aviation a GPS guides pilots along a pre-planned course that has been precisely created.
The Monthly Management Report tracks business performance compared to the income and expense parameters prescribed in THE ANNUAL BUSINESS PLAN.
This report is very intuitive - 90% self-explanatory once you walk through it. The Report Tracks all the individual income elements as they occur compared to the numbers that were precisely projected in "The Annual Business Plan."
MAKE SURE you check out "Understanding The Annual Business Plan" which is another insert that explains the "PLAN" and the 40 years of EXPERIENCE backing it up. EVERYTHING you read here is backed by those 40 years of EXPERIENCE.
Please refer to FIGURE 1 below
The top section of the report recites some of the basics of The Annual Business Plan and its YTD ANNUALIZED NUMBERS. (All references are Annualized for consistency and ease of interpretation).
The TOTAL CASE VOLUME PLAN is 500 based upon a Five Year Recency-Weighted Average and a Trend Analysis. The report shows that through June 30, The Jones firm is trending at an Annual rate of 520.
The explanatory detail of "FULL BURIALS" pinpoints immediately both the value of a careful PLAN, but also exactly how the Management Report interprets what is actually happening beneath the gross numbers.
Full Burials were forecasted to number 153 (out of 500) with a recovery average of $5,825 each. YTD, however, the recovered amount average is $5,717 ($108 LESS) The Number count is trending higher at an annualized 159 (due to an "UP" year).
See "TAKEAWAY" comments for the
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The actual report contains 8 to 12 pages. FIGURE 2 (below) is an example of the various detail that provides great insight and understanding to Owner Management.
JONES FUNERAL HOMES, INC
MONTHLY MANAGEMENT REPORT JUNE 2022
| 2022 Plan | ANNUALIZED YTD |
POSITIVE | NEGATIVE | |
| CASE VOLUME | 500 | 520 | 20 | |
| TOTAL OPERATING INCOME | $2,992,758 | $3,038,753 | $45,996 | |
| COST OF GOODS | $445,921 | $452,774 | (6,853) | |
| OPERATING EXPENSES | $2,034,517 | $2,070,735 | (36,218) | |
| BUSINESS PLAN OPERATING PROFIT | $512,320 | |||
| PRESENT TREND OPERATING PROFIT | $515,244 | |||
| TREND OVER (UNDER) BUSINESS PLAN | $2,924 | $2,924 | ||
| FULL BURIALS | 153 | 159 | 6 | |
| Service Charge | $5,825 | $5,717 | (17,172) | |
| Full Burial Services | $891,225 | $909,003 | $34,950 | |
| CREMATION W/RENTAL | 160 | 166 | 6 | |
| Service Charge | $3,720 | $3,675 | (7,470) | |
| Cremation w/Rental Services | $595,200 | $610,050 | $22,320 | |
| DIRECT CREMATION | 71 | 75 | 4 | |
| Service Charge | $3,045 | $2,990 | (4,125) | |
| Direct Cremation Services | $216,195 | $224,250 | $12,180 | |
| CREMATION NO VIEWING | 10 | 10 | ||
| Service Charge | $2,775 | $2,775 | ||
| Cremation No Viewing Services | $27,750 | $27,750 | ||
| COMPASSIONATE CREMATION | 15 | 16 | 1 | |
| Service Charge | $2,495 | $2,450 | (720) | |
| Compassionate Cremation Services | $37,425 | $39,200 | $2,495 | |
| AFFORDABLE CREMATION | 5 | 5 | ||
| Service Charge | $2,300 | $2,195 | ||
| Affordable Cremation Services | $11,500 | $10,975 | ||
| PARTIAL BURIALS | 55 | 57 | 2 | |
| Service Charge | $4,774 | $4,695 | (4,503) | |
| Partial Burial Services | $262,570 | $267,615 | $9,548 | |
| MISCELLANEOUS SERVICES | 31 | 32 | 1 | |
| Service Charge | $2,323 | $2,325 | $64 | |
| Miscellaneous/Other Services | $72,013 | $74,400 | $2,323 | |
| 153 | 159 | 6 | ||
| WHOLESALE CASKET | $1,288 | $1,233 | (8,745) | |
| Casket Multiple | 2.2 | 2.2 | ||
| Casket Retail | $433,541 | $431,303 | (2,237) |
JONES FUNERAL HOMES, INC
JUNE 2022 YTD ANNUALIZED
| OPERATING INCOME | BUSINESS PLAN | YEAR-TO-DATE | |||
| Professional Services | 70.6% | $2,113,878 | 71.2% | $2,163,243 | |
| Merchandise Income | 29.4% | $878,880 | 28.8% | $875,510 | |
| (Caskets, Vaults, Urns, etc) | |||||
| TOTAL OPERATING INCOME | $2,992,758 | $3,038,753 | |||
| Case Volume Analysis | |||||
| BUSINESS PLAN | YEAR-TO-DATE ANNUALIZED |
PERCENTAGE DIFFERENCES |
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| Full Burials | 153 | 30.6% | 159 | 30.6% | 0.0% |
| Cremation w/Rental Casket | 160 | 32.0% | 166 | 31.9% | -0.1% |
| Direct Cremation | 71 | 14.2% | 75 | 14.4% | 0.2% |
| Cremation No Viewing | 10 | 2.0% | 10 | 1.9% | -0.1% |
| Compassionate Cremation | 15 | 3.0% | 16 | 3.1% | 0.1% |
| Affordable Cremation | 5 | 1.0% | 5 | 1.0% | 0.0% |
| Partial Burials | 55 | 11.0% | 57 | 11.0% | 0.0% |
| Other Miscellaneous | 31 | 6.2% | 32 | 6.2% | 0.0% |
| TOTAL FAMILIES SERVED | 500 | 100.0% | 520 | 100.0% | |
| Service Charge Analysis | |||||
| BUSINESS PLAN | YEAR-TO-DATE ANNUALIZED |
PERCENATGE DIFFERENCES |
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| Full Burials | $891,225 | 42.2% | $909,003 | 42.0% | -0.1% |
| Cremation w/Rental Casket | $595,200 | 28.2% | $610,050 | 28.2% | 0.0% |
| Direct Cremation | $216,195 | 10.2% | $224,250 | 10.4% | 0.1% |
| Cremation No Viewing | $27,750 | 1.3% | $27,750 | 1.3% | 0.0% |
| Compassionate Cremation | $37,425 | 1.8% | $39,200 | 1.8% | 0.0% |
| Affordable Cremation | $11,500 | 0.5% | $10,975 | 0.5% | 0.0% |
| Partial Burials | $262,570 | 12.4% | $267,615 | 12.4% | -0.1% |
| Other Miscellaneous | $72,013 | 3.4% | $74,400 | 3.4% | 0.0% |
| Total | $2,113,878 | 100.0% | $2,163,243 | 100.0% | |
The Jones Funeral Home, halfway thru 2022, is enjoying TWENTY EXTRA CALLS THIS YEAR. The Problem, however, is he is not getting the full benefit because he is DOWN $108 for each Full Burial with $17,000 in annual cost.
This brings up the perennial Problem that has long been the BAIN OF FUNERAL BUSINESS MANAGEMENT - THAT OF THE CONTINUOUS CASE VOLUME SWINGS.
FUNERAL SERVICE CAN AND SHOULD OPERATE ON THE FIVE YEAR ANNUALIZED BASIS AND THE UPS AND DOWNS OFFSET AS LONG AS THE ALL THE OTHER VARIABLES STAY THE SAME.
Please refer to FIGURE 3 below
TAKE SPECIAL NOTE OF THE FIVE-YEAR CASE VOLUME GRAPHIC DEPICTION
We have long made the case for a FIVE-YEAR DEPICTION BECAUSE THE CASE VOLUME SWINGS EVEN OUT OVER FIVE YEARS - BUT ONLY IF THERE IS AN ANALYTICS-BASED BUSINESS PLAN EACH YEAR - ALONG WITH MONTHLY MANAGEMENT REPORTS THAT MAKE TIMELY ADJUSTMENTS POSSIBLE.
The Business Must Have an ANNUAL BUSINESS PLAN THAT MAKES INCOME PROJECTIONS ON THE BASIS OF ANALYTICAL DATA ANALYSIS - PLUS IT MUST BE MONITORED MONTHLY TO STAY ON TRACK.
We would love to have the opportunity to
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What we have previously considered to be a 500 call funeral
business with frustrating Ups and Downs IS in reality a
2,500 call firm over Five Years.
The above is TRUE ONLY if all of the "Controllable Elements"
of service charges and merchandise have been precisely
PLANNED each year and Monitored Monthly to make sure
each stays on the PLANNED Track.
We have 'Always' considered The Funeral Business to be A FIVE YEAR PLAN -or- A Five Year Break-Even.
You can absolutely take that to the Bank - AND, of course, with a few Caveats.
Our process is successful because we build into The Annual Business Plan a DATA ANALYSIS process of all of the INCOME ELEMENTS. Your firm's Profits are only as good as your Understanding and Control of the INCOME ELEMENTS. There is nothing Magic about it.
CONSISTENT PROFITS
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Here is a recent Statement by Dale Espich on the combination of THE ANNUAL BUSINESS PLAN and THE MONTHLY MANAGEMENT REPORT – as designed and offered for service to Successful Owners in Michigan today.
"I cannot think of a more ACCURATE. Or more FUNCTIONAL, or more VALID, or more RELIABLE, METHODOLOGY for a Funeral Director/Owner to rely on than the combination of what we refer to as "THE ANNUAL BUSINESS PLAN" and the use of "THE MONTHLY MANAGEMENT REPORT" as prepared by The FUNERAL MANAGEMENT INSTITUTE, which is a wholly owned sister company of DALE E. ESPICH and Assoc. Inc."
Espich continues, "I CANNOT THINK OF A WAY for an already Successful Owner TO BE ANY MORE CONTENT AND SATISFIED THAT MY BUSINESS WILL OPERATE AS POFITABLE AS PLANNED, YEAR IN AND YEAR OUT, and that the INEVITABLE and AGGRAVATING CASE VOLUME SWINGS WILL EVEN OUT AS INDICATED WHEN I FOLLOW THE PLAN TO MAKE SURE THE "CONTROLLABLE FACTORS" ARE KEPT IN ORDER BY A CAREFUL MONITORING OF THE MONTHLY MANAGEMENT REPORT. ESPICH STRESSES THE FACTUAL PRACTICALITY, AND THE OBVIOUS IN THE SEVEN PAGE "MONTHLY MANAGEMENT REPORT"
Espich continued, "The obvious to the statement is that I and my staff (owner) carefully monitor all the obvious and important functions, that my business is "stable" in that the figures on a Five Year basis even out to the carefully calculated averages computed by Trends and Five Year Recency Weighted Average."
The big difference NOW and will be for 2023 is the complete reversal of the relationship between REVENUE SOURCES of Caskets/Vaults, and each and every "service" version.
The huge increase in SERVICE REVENUE TODAY puts just that much more importance on the ACCURACY OF ANALYSIS DETAIL all the way through every single ELEMENT OF REVENUE AND COSTS.
The METHODOLOGY of our MANAGEMENT PACKAGE has over 40 years of EXPERIENCE TO 99% BACK UP THE EFFICACY, THE RELIABILITY AND THE VALIDITY of the How, WHERE and WHY of the way it works.
Espich adds this disclaimer: The statements about satisfactory results while faithfully using the System I offer for and charge a fee for the execution thereof, those statements are mine on the basis of an ethical set of values, BUT, ARE NOT – because of all the possible variables not a fault of the system---ARE NOT IN ANY SENSE A GUARANTEE. Not to be flip, but truthful and practical. "THERE ARE NO GUARANTEES IN LIFE."
