Bill W. Forsberg grew up in a Canadian town with a population of just 125 people. Growing up as the youngest of 12 kids, life wasn't always easy - and it only got harder when his father died when Forsberg was just 9 years old. It was that tough experience, however, that led to his fascination with funeral service, and he's built an impressive career working at numerous companies, including Forsberg Funeral Homes, Arbor Memorial Services, Wilbert Funeral Services, Batesville Casket Co., Wilbert Funeral Services, and most recently - the Lane Family of Companies. Thomas A. Parmalee reports
Tell us a little bit about how you got into funeral service and what you do for the Lane Family of Companies?
It was 1963 when my father died and at the age of 9 I was the youngest of 12 kids and took his death the hardest. My brothers and sisters were older and seemed to work through things easier than I did.
I was especially taken with the "undertakers" and the things about the funeral home and how they helped my mom and family with all the details. The fancy polished cars and nice suits impressed me as well. I vividly recall running up to my mom at the luncheon afterward and telling her, "I want to be one of those guys when I grow up." Her response was, "Oh that's nice, now go and find your cousins to play with."
From there I kept those impressions in my mind and when the school guidance counselor administered aptitude tests in grade 12, the results showed a vocation that included a mix of business as well as social service. The counselor suggested several possibilities, and one of them was the funeral profession. The opportunities grew from there, and I have been abundantly blessed over the years. Since December 2010 I've been the chief operations officer for the Lane family's eight funeral homes, stand-alone crematory operation and preneed insurance agency in northeast Ohio.
You're a big believer in studying outside niche markets and getting ideas to apply to the funeral profession. What companies are doing interesting things that you think funeral homes should watch?
Yes, there are a few favorite companies I follow for ideas that could be reconstructed for the Lane firm and the client families that we serve. I especially like UPS and Goldman Sachs. Joe Lane, our fifth-generation owner of the company, enjoys Apple.
With Goldman Sachs, I find that it's not just its ability to make boatloads of money, but also its ability to create an astounding employee loyalty. From executive assistants to telephone personnel to Harvard Business School graduates, there is a long waiting list just to get an interview for a position. Then, if you are one of the lucky ones to get in, the training is both constant and first rate. While we're not there yet, some of the things they have been successful with we have tried to inculcate.
Apple is a favorite of Joe's as he enjoys its innovative ideas and quality in everything it produces. If you have ever examined a box that one of its products come in and see and feel the design, the way it fits together seamlessly and the first impression it makes, you'll know what he means. It's a preamble to what's inside.
His take on that can be transposed to funeral service and the initial touch point for a client family with a funeral home experience. What do you see and feel as you are coming up to a funeral home for the first time? What are the facilities speaking to you as you approach - the parking lot, the building, the steps and doors, the inside and then of course the person that greets you? Joe is fanatical about the details and standards of the businesses of his organization, and I'm sure that is among the reasons the family firm has been in existence for over 158 years.
Then there's Southwest Airlines. We take its mantra of maximizing what you currently have and doing more with the same. If every funeral business owner could achieve even 30 percent of its effectiveness in the better use of assets, the increased dollar results would drop right to the EBITDA line. Southwest Airlines has been the only consistently profitable airline in the past 10 years, and I see that as simply amazing.
Operating lean doesn't necessarily mean being cheap. Nor does it mean you take advantage of people. The culture of the folks who work there shows; "If we can save the company money and operate more efficiently as an airline with tough competition, that will ensure our jobs and pay increases for the future."
"Operating lean doesn't mean cheap. Nor does it mean you take advantage of people." Bill Forsberg
What do you think is the number one problem for funeral homes today, and what can they do to start to solve it?
Cash flow. Period. Alan Creedy has a tag line that says: "Happiness is positive cash flow." I couldn't agree more. It is the very engine that drives or deters almost every factor in the day-to-day operations of this or any other business.
Your readers may ask just how does a funeral home business owner obtain or improve positive cash flow. First, start to get paid for your work - at the time you do it. At the time of arrangements you should receive payment in full for the entire contract. No more accounts receivable.
Second: Don't over-leverage your assets. Move to get out of debt. Banks love to dictate and be in control, and they can do that to you only when your debts-to-equity ratios are not in balance.
Third: Accumulate cash. In business, cash is king. Always has been and always will be. It allows you choices, and that's key in these economic times - having the flexibility to respond to opportunity with cash when it comes knocking at your door. Whether that's a semi-load of caskets or receiving a surprise call from a competitor wanting you to buy their business.
The other matter of cash flow improvement would be the consideration of becoming more of a 'pay only for the use' when it comes to equipment and services needed for the operation of a funeral business. Where did the notion originate that every funeral home in North America must own a complete fleet of automobiles? Yet today that thinking is still the majority. There are attractions to renting as needed specialty vehicles and leasing service vehicles and passenger sedans. Tax advantages are similar, and you have a new car every two to three years without the heavy initial capital cost. The same can be said for many things from landscaping services to accounting to even the leasing of full-time personnel (Employers Advantage is one such firm specializing in doing that for our profession). The old saying, "Why own the cow when you can just buy the milk at the store as you need it" does have some application to what we do.
When it comes to leading a business, what can someone do to optimize the performance and success of the team?
Work on the culture of the company at whatever level they are at - owner, or manager. From culture flows commitment. From commitment flows accountability which greatly differs from responsibility. It's also remarkably important to communicate the same message constantly and be as transparent as you possibly can be with your team. If you're the manager and not the owner, act as if you were the owner and make decisions based on what's good for the long term of the firm.
Your company charges families who opt for cremation a different amount of money based on how quickly they want the cremated remains back. Tell us how that works and the reasoning behind it.
We have three pricing levels for the return of cremated remains: an expedited price - returned within 24 hours of receiving the complete paperwork; a priority price - returned within three days of receiving the complete paperwork; and a standard price - returned by the end of the fifth business day after receiving the complete paperwork.
A basic business maxim states when there is a variation in service levels there should be a variation in price levels. We believe that most people understand that. The family who selects cremation but is uncertain over what to do and when to do it with the cremated remains of their loved one should not be charged the same retort fee as the client family who is flying home tomorrow and absolutely must have the cremated remains to accompany them on the trip. The idea came from UPS (a company we we watch) for their overnight, three-day and ground pricing model. It works, and we have had zero client family complaints.
Funeral professionals are always looking for new products and services that help them better run their businesses. Can you tell us about a new solution you're using that others might want to look into?
The introduction of cost protector fee of some type (either a flat fee or percentage of the total) to guaranty the price of prefunded arrangements. Many say the jury is still out as it dissuades the public from making prearrangement's. We say that losing money of servicing underfunded prepaid funerals in the future dissuades funeral homes from surviving!
We instituted a fee in October 2012 and are monitoring it closely. Our client families currently have three choices: prearrange and not prepay; prearrange and prepay without any locked in price guaranteed; prepay with a cost protector fee (currently we use a percentage of the total) and enjoy the benefits of a locked in price guaranty for the future.