Funeral profession cautiously optimistic about 2024
We recently conducted our latest Business Barometer research, which examines current Funeral sector trends and the view of business owners about a range of issues, from the cost of doing business to recruitment and retention.
In this piece, we get under the skin of the data to find out more…
Appetite for investment
The appetite to invest in their practice among Funeral Directors is very strong, with 83% of respondents aiming to seek funding for investment in the next 12 months. This closely tracks the 84% average for the professions sector as a whole, and is higher than the 73% achieved for the wider SME community.
Missed business opportunities
At 56%, the number of Funeral Directors who have missed business opportunities because of a lack of available funding is significantly higher than in many other sectors – in comparison, the UK SME average is only 41%.
This result highlights the importance of business owners to investigate the different funding options available to them.
Economic outlook
From a macro-economic perspective, Funeral Directors are generally optimistic about the UK’s economic prospects, with results in line with the views of business owners in the wider professions sector.
Predicted business performance
Predictions about future business performance are – considering the various challenges business owners have faced over the past few years – positive, and points to the resilience of the Funeral sector.
49% of Funeral Directors who responded expect their practice to expand during 2024, compared to just 6% who think they’ll contract; the remaining 39% anticipate they will ‘stay the same’.
Acquisitions
69% of Funeral Directors have considered making an acquisition to grow their business or see it as a way to own their first practice.
And, according to 46% of Funeral Directors, they have seen a rise in the number of acquisitions in the past 12 months – 19% think there’s been a fall while 34% say there’s been no change with the rest being unsure.
Encouragingly, most Funeral Directors are confident about both where to go for funding (76%) for an acquisition and how to arrange the necessary funds (71%).
Artificial Intelligence (AI)
While Funeral Directors think AI will influence their profession in some way, they’re still largely unclear of its likely impact on their business:
- A large impact - 24%
- Some impact - 48%
- Not much of an impact - 21%
- No impact at all - 7%
- Unsure - 1%
Despite 25% of respondents being ‘very concerned’ and 32% ‘somewhat concerned’ about the rise of AI, 55% are of the opinion it presents opportunities for growth and employment.
A further 58% are looking to incorporate artificial intelligence into its business processes.
Cost of borrowing
Over half (55%) of Funeral Directors have seen their cost of borrowing increase, causing 48% to change their funder, and 70% to increase their prices.
More positively, over half (55%) of Funeral Directors think interest rates have peaked, and 60% are considering alternative forms of finance to mitigate their increased costs.
Customer service
Having a named, personal contact as their funder is important for 93% of Funeral Directors.
The most important factor that determines good customer service by a funder is expert knowledge of their industry, according to 22% Funeral Directors. This is followed by ‘the willingness to provide funding through all economic cycles’ (21%).
Business growth
Looking back over the past 10 years, the biggest inhibitors of growth for Funeral Directors have been:
1. Inflation
2. Energy costs
3. Interest rate rises
4. Skills shortages
5. Material shortages
6. Influence of Brexit
Funeral Directors’ top five business concerns are:
1. Energy costs
2. Interest rates
3. Inflation
4. Lack of skilled staff
5. Competitors
Methodology:*
All figures, unless otherwise stated, are from a Censuswide survey conducted in January 2024. The survey canvassed the opinion of over 1,200 senior members of the professions across the UK on a range of issues affecting their businesses.
