Former Owner Spotlight
An Interview with Rick Allnutt
In evaluating all the firms we met with, SCI gave us the best opportunity to grow our firms and our people, both of which were important to me.
Rick Allnutt sold his Colorado and Nebraska based firms to SCI in August of 2017. The core of Rick’s locations is in the Northern Colorado metro areas of Fort Collins and Greeley. Overall his business consists of 12 standalone funeral homes and 1 combination funeral/cemetery property performing approximately 2,400 funeral cases and 200 interments. We sat down with Rick to discuss his experience and to get his advice for others that may be considering succession planning.
How did you come to a decision to pursue a sale?
My decision to sell was not immediately clear. We were thinking about downsizing and selling one of our locations and as we thought more about it, we said, why not look at selling all of them? This led to a discussion with our children about their interest in taking over ownership of the business, and it was clear they were not interested. So the question was not if, but when? Personally, my wife, Susan, and I decided we were ready. And the past few years have been great for valuations.
Someone once told me that many business owners wait until they’re older to sell, and they just don’t work as hard at the business, so the numbers decline. So not only do they have less time to enjoy their retirement, but the value of the business declines as well. I did not want that to be me.
What led you to select SCI for your sale?
You know, it’s interesting, I did not enter the process wanting to sell to SCI. The prospect scared me a little bit. I wanted to ensure that our firm would be taken care of and looked after, and I had the perception that because SCI is such a large company, our businesses would not be given the proper attention. In the process of talking with SCI, I realized that I was completely wrong about that! I found exactly what I was looking for in SCI and their approach to partnering. It was clear that all of our interests would be aligned. One of the things that stuck with me was they said that they are only as good as their last acquisition. In evaluating all the firms we met with, SCI gave us the best opportunity to grow our firms and our people, both of which were important to me.
What was your experience working with SCI during the sale process?
It was a very easy process. I never once felt like there was much negotiation at all. Rather, the SCI team and I were all working together toward a common objective of closing the transaction. This surprised me. We had weekly meetings with the SCI team, and we quickly realized they were great people that were there to help us in the journey. We also used Johnson Consulting Group, who helped pull all the information together, which was a big help.
What has your role been since the sale?
I have stepped back from day-to-day operations because I was really selling to slow down. I appreciate that SCI respected my goal to spend more time away from the business. That said, I still am connected. I get daily reports on who is having a funeral, so I can be present for families I personally know. I still walk into each location and feel like I own them. However, now I enjoy visiting with families and our team without the stress. Otherwise, I visit somewhat regularly with SCI’s market leader for our area, Michele Heusel. She is very good about running decisions through me, but honestly, I have become very comfortable with her leadership and decision-making.
How has your team and firm adapted to the sale?
We just had the one-year anniversary of our sale, and we had a big town hall meeting to commemorate that milestone. The room was really crowded and I made a comment to the team that it is satisfying to see that everyone is still here a year later! Everybody seems content, and the beauty is they are still on the same mission and vision we instilled into the business. They are dedicated to our firm, but they also know they have this umbrella of Dignity Memorial over them. Of course, there were some challenges with people looking at a different computer screen and putting in different data, but there was a lot of support from SCI to help us get through that.
What have you most enjoyed about partnering with SCI?
Well, there are a lot of things, but if I had to point out one thing, it is that everything they told me and promised to do, they have done. There is not one commitment they made to me that they haven’t followed through on. Here is a great example. We had plans to build a new location in Greeley, and I was so amazed when SCI said they wanted to fulfill that vision after partnering. And for them to jump right in and start construction on a new facility for our company, it shows that they follow through on their commitments and do what they say they are going to do. That facility is under construction now and is going to be a great addition to the community and families we serve.
What advice would you have for others considering a sale?
I really did not learn this lesson until after I sold, but I would say to business owners, ask yourself what you really want out of life, and what do you want to be doing? I didn’t do that enough. I was married to our business and working it to the detriment of my relationship with friends and family. In our profession, there are always events to go to that kept me from leading a balanced life. Now I am able to be there, and it has re-energized me. I really couldn’t be happier. I have reinvigorated friendships from years ago. I am able to spend more time with my parents and kids. I can take vacations and not constantly be worried about things back home. And the nice part is that I have been able to keep many of my professional relationships. I go on trips with my professional network, and so I really have the best of both worlds.
Interviews With Former Owners
An Interview with Dave McComb
Dave McComb and his brother, Doug, sold their Fort Wayne, Indiana firm, D.O. McComb & Sons, to SCI in March 2016. D.O. McComb & Sons serves the families of Fort Wayne across seven funeral homes and one cemetery. We sat down with Dave to discuss his experience and provide advice to others that may be considering a sale.
How did you come to a decision to pursue a sale?
For our family, the primary issue was that my brother and I did not have anyone in the next generation interested in the business. We both have three children and they have gone on to other things. So it was not a question of "if" but rather "when." Big picture, if you look at the baby boomers, the demographics of the future are good, however those same baby boomers are going to live longer and longer so their impact is further into the future. We had two really good years in a row and we felt it was a good time to get a deal put together. We also spoke to several industry experts, including Tom Johnson, who said it was a good time to sell. We wanted to sell on our terms and we have no regrets about the path we chose.
What led you to select SCI for your sale?
We had gotten to know the team from SCI over the years at various industry events and had really come to respect them. We knew others that had sold to SCI and had a positive experience, so we were comfortable with them. Additionally, they are the leaders in our profession and they have other operations in the Fort Wayne area, so they knew our market and were setup to easily transition our team into their family.
What was your experience working with SCI during the sale process?
It was a fairly smooth process. It was really about collecting the data that SCI needed to complete their diligence and put the deal together. I worked closely with my attorney and my CPA. I did not involve anyone else from the funeral home, because I was familiar with all of the numbers and knew them well. Confidentiality was key for us as well as SCI. I am pleased to say there were no leaks from either side over the three months we pulled this together, so I would have done it the same way again.
What has your role been since the sale?
I have stepped back to more of a consultative role. Before we sold, Taron Smith was our GM and ran operations while I ran strategy, pre-need and marketing. During the transition I gradually moved those functions over to Taron and his team and they very capably took the reigns. I still go to funerals of people I know in Fort Wayne, but I do not go to the funeral home on a day-to-day basis anymore, which is nice. When I am in town, I pop in a few times per week to see the staff which I enjoy. Our team was one of the best in the business and they have taken over extraordinarily well.
How has your team and firm adapted to the sale?
As I mentioned, our team has done very well. Out of approximately 110 full and part-time associates, we only lost one during the transition. The change has created opportunities for the leaders in our firm and they continue to grow. One of the things I have done since the sale is to talk to families in the community to check on our service levels. And I hear firsthand that they are just as high as they were before we partnered with SCI.
What have you most enjoyed about selling your business?
It has certainly given me more flexibility to travel, both personally and for other business interests I have. I do not feel the pressure to be visible at the funeral home anymore. An additional benefit has been that now when our family gets together we act more like a family without the business issues dominating the conversation, which has been a nice surprise.
What advice would you have for others considering a sale?
Everyone needs to have a succession plan of some kind with their family or shareholders. And it does not have to be perfect--any plan is better than no plan. That plan should have an exit strategy and the trigger points to get there, such as a health issue, a death or a child opting out of the business. We had a plan and it worked for us. We would not do anything differently if we had it to do over again.
An Interview with Laurens Fish
Laurens Fish sold his Austin, Texas firm, Weed-Corley-Fish, to SCI in March 2017. Weed-Corley-Fish serves families in Austin across four traditional funeral homes. We sat down with Laurens to discuss his experience and provide advice to others, who may be considering a sale.
How did you come to a decision to pursue a sale?
As our family evaluated our future, one of the critical questions we faced was: did we want to grow our business to the next level on our own, or pursue a succession plan by partnering with another company? Our largest location was leased and we were going to have to relocate it in the next five to ten years, which was an opportunity, but also a financial commitment. The more I thought about the next chapter of my career, frankly, I missed the day-to-day aspect of helping families. We felt like when we looked at the future of funeral service, the benefits of being part of a larger organization were best suited to take Weed-Corley-Fish to the next level. Additionally, I thought it would allow me to spend more time serving families and being active in the community, which are things I really enjoy.
What led you to select SCI for your sale?
SCI already had really well-run firms in the area that provided great service. This made them the natural suitor. We did speak to a few other smaller corporations, but did not think they could provide the same support as SCI. I can give an example of the benefits of SCI pertaining to our leased location. SCI’s real estate team has already located and purchased a piece of real estate to move our leased location to a new and more modern facility. This was a large financial commitment to the Weed-Corley-Fish brand, and it makes me happy to know the future of our family’s heritage is secure.
What was your experience working with SCI on the sale?
The experience was great all around. Confidentiality was never an issue. John Faulk, Senior Vice President, Revenue and Business Development and his team, including Steve Kramer and Michael Lehmann, were extremely professional, knowledgeable and made the process easier than I could have ever imagined.
What has your role been since the sale?
I have stayed on full time, as I wanted to continue to work with our firm. I work closely with our market leader in Austin, Rodney Molitor, to set our strategy and promote our brands. With less of the administrative work that comes with ownership, I have also really enjoyed getting back into funeral service, helping serve our families and being more active in community organizations.
How has your team and firm adapted to the sale?
Anytime you transition from a smaller environment to a larger one, change can be difficult. The back office process changes were a challenge for our team. That said, it's great to work with a company where things work well. From our computers and IT to HR, payroll and legal support, the SCI support team is outstanding. Most importantly for me, SCI kept all of our team in place and their pay whole, and wanted to keep the culture and service the same.
What have you enjoyed most about partnering with SCI?
As I have mentioned, I have enjoyed getting back to work in funeral service, helping families, and being involved in the community. I have a lot less stress and worry in my life knowing our business is taken care of.
What advice would you have for others considering a sale?
I would encourage people to analyze what they do on a day-to-day basis and try to understand how things would change with a sale. Would a sale refocus you on certain areas of your life and relieve stress? I personally have been re-energized by the possibilities ahead and by being part of a company that is making a commitment to the future of funeral service.
An Interview with Joe Eagan
Joe Eagan is a General Manager in our New Orleans market. He oversees three standalone funeral homes and a funeral home/cemetery combination facility. Joe has a business degree from LSU and a MBA from the University of New Orleans.
Will you share a little bit about the firms you manage and their link to your family?
I'm a sixth generation funeral director, and two of the firms I currently manage hold a legacy with my family. My great-great-great grandfather, Ambrose Leitz, a cabinetmaker from Germany, established the business in 1854 in the historic Irish Channel neighborhood of New Orleans. He and future generations of the family grew the business into one of the largest family owned and operated companies in the city – which included three funeral homes, a life insurance company, an insurance agency, and several other peripheral business interests. The funeral homes and life insurance company joined Loewen Group International in 1994. Loewen’s successor, Alderwoods Group, was acquired by SCI in 2006. Shortly afterward, SCI made a significant investment in Leitz-Eagan’s flagship firm in Metairie, Louisiana by purchasing the leased land on which the building was situated. Substantial interior renovations followed in 2010. I started working in the business while still in high school. After graduating from LSU, I continued to learn and grow in the profession. In 2014, I was offered the opportunity to manage the operations of the Leitz-Eagan businesses at the age of 24, which was a welcome opportunity for me. The Leitz-Eagan businesses holds a long-standing heritage in New Orleans, a city with unique burial practices and traditions that make our operations notably different than other places. SCI is very sensitive to this and does much to support and promote the individual cultures and traditions of each firm.
You are the General Manager over a new-build cemetery and funeral home in partnership with the Archdiocese of New Orleans. This is only the third cemetery we’ve built from scratch. What is unique about this property and partnering with the Archdiocese?
New Orleans, and South Louisiana to a greater extent, are both areas with a large Catholic heritage. We’re very fortunate to be a part of this project, and I’m very excited about and privileged to have the opportunity to partner with the Archdiocese to open a new business from the ground up. In a way, the culture of our company complements that of the church – through our roles, we help people through uniquely challenging events, and do so with extraordinary sincerity, concern and compassion. The property itself is beautiful and will serve the New Orleans Northshore community well. This area has seen substantial suburban growth over the past 25 or so years, and the need for a business like this one is certainly present. We’ve identified that need and have made a significant investment along with the Archdiocese. I know that the relationships we will create and continue to build here will be very special.
You worked at another national funeral company and returned to SCI. What were the positive attributes that you see with our Company?
I began working in the business when I was 15, and much of my time in funeral service has been spent with an affiliate of SCI. The company has made a significant investment to develop my personal and career growth, and it provides the resources and support to assist with the operations and growth of the businesses that I lead. We are definitely the leader in our profession, but that’s not simply because of the size of our network. Our culture supports collaboration and teamwork. It feels more like a family setting, and even though at times we may not all see things the same way, there’s always opportunity for discussion. We care about our customers, strive to be better, and are not comfortable with status quo positions. We continually demonstrate a high degree of concern and caring for people in a sincere and personable way. I have found that management is innovative in their decisions and professional in their actions. Management decisions and investments are aligned with the long-term growth of the business. We operate in a logical and thoughtful manner, and investments are bounded by true metrics and reasonable expectations.
As a relatively younger leader in funeral service, what do you see as the most critical challenge we face in the profession and how can we best deal with it?
We are all aware of the changing trends not only in funeral service, but also in the next generation. We must remain relevant to our communities in ways that support our existing infrastructure of businesses and operations. And we must change in practical ways that demonstrate value in what we do, while still remaining sincere and compassionate. Although national trends in disposition type and religious affiliation are certainly shifting, the emotional aspect of grief when someone passes away will always be present. I believe that people will always need guidance from true professionals in that respect, and we need to continually attract and retain talent that supports this essential human need. What SCI is doing to invest in attracting talent and gaining certification as a Great Place to Work is an example of how we can make employment in our profession attractive to star performers. I think if you look back in history, around when my family’s firm began, the business was very much relationship-based – we served our immediate community when a need arose. People counted on my family for guidance and help. While funeral service may have shifted in the latter part of the 20th century to lean more heavily on merchandise and the transactional aspect, I think we’ll see a continued emphasis on relationships with people going forward.The best firms in our profession closely measure the customer experience, including SCI through its J.D. Power customer service program. That way we can ensure we are staying close to customers and ensuring they have a positive experience that build enduring relationships.
An Interview with Mike & Janet Klett
Mike and Janet Klett, along with Janet’s cousin George D’Esopo, sold their firm in Hartford, Connecticut to SCI in April 2016. Their business consists of two standalone funeral homes serving approximately 450 families in the Hartford area. We sat down with Mike and Janet to discuss their experience during and after the sale of their firm and to get their input for other funeral firm owners.
How did you come to a decision to pursue a sale?
We had reworked our shareholder agreement continually, but as we grew older, we realized we needed a better plan to ensure the business continued in competent hands if something happened to us. After all, we are in the planning business. We had worked closely with Dale Espich since the 1980s and later with Johnson Consulting Group after he affiliated with them. We worked with them to put together a plan. Our children were pursuing their own passions outside of the funeral profession and it was clear they were not going to be involved. It was important to us to ensure that our business and our staff members’ careers had a transition plan for the future.
What led you to select SCI for your sale?
SCI wasn't even on our radar when we began this process. We had an unfounded bias against SCI and perceived them just as the 800 pound gorilla. It was actually our son who convinced us we really needed to talk to all interested parties. We decided to put everyone on the list…in fact, we scheduled SCI first to get it over with! We met with Jay Waring, Senior Vice President and Chief Operating Officer, and John Faulk, Senior Vice President, Revenue and Business Development, and quickly realized they really understand funeral service at a local level. We came away from that meeting with an entirely different sense of SCI and what it would be like to partner with them. Jay Waring is a licensee from a family-owned business and he knows how hard it is to make this decision. SCI understood what we were trying to do. In hindsight, as we look across the different consolidators we met with--and what has happened to each--it is clear that our decision was the right one for us.
What was your experience working with SCI during the sale process?
Well, it was extraordinary from so many perspectives. Michael Lehmann in SCI’s business development department is a gem to work with. We also had a great experience with the professionals at Johnson Consulting Group, our accounting firm, our in-house business manager and our local law firm. And they all came away with the same conclusion: SCI made the process seamless. SCI’s attorneys were flexible and efficient. And everyone’s level of confidentiality was key to the process.
What has your role been since the sale?
On many levels, it has been a great transition for us personally. We are both still working at the funeral home but have slowed down our schedule. It is great to come into work and see families and be at community events without having to run the day-to-day business and worry about long-range planning. In essence, we have been able to stay active without the stress. The benefits are great for our colleagues as well. Our talented and qualified team know how to provide great service, so they do not need us there every minute. For Janet specifically, her first thought was that she would stay home and retire--but now that she can do the things she enjoys at the funeral home with less stress, she enjoys coming in a lot more--and also enjoys working fewer hours.
How has your team and firm adapted to the sale?
We had concerns about two things. First was continuing the quality of our service levels. The second was that our staff would be able to stay and be treated fairly. If we had not been assured those two items would be maintained, they would have been deal breakers. We are pleased to say that our staff was maintained and, in fact, we have even added staff to allow us to step back a bit from operations.
What have you most enjoyed about selling your business?
Two things stand out. First, we enjoy days where, if our locations are not busy, we don’t feel as though we need to be present, so we can actually take a day off. We were not really able to do that before as we felt compelled to be in the office every day and inevitably did so for long hours. Secondly, we feel like we are still involved in a family business. SCI is now a part of the family. Our relationship with the home office team in Houston and regional leadership has been great and validates our decision to join SCI. We sleep a whole lot better at night and are still proud of our name, and we want to continue to be proud of it years from now.
What advice would you have for others considering a sale?
We have learned three things:
1. As we discussed earlier, it is important to have a plan. We are in the planning business. We have received a lot of phone calls from people wanting to know what it’s like on the other side. We cannot overstate the need for a plan. We also benefited from good representation and advisors. The entire process takes more time than you might think. It could take three to five years to figure out what you want to do, put a plan together for the future, and execute that plan.
2. It is important to be adaptive to a transition. Change doesn’t come easily in funeral service. We have had to manage through different administrative forms and we have had to get our team comfortable with that. But at the same time, we have had encouragement and support to do this and also to increase our outreach efforts. We’ve also appreciated that SCI has continued to invest in capital improvements to all three of our buildings.
3. Finally, we have learned that the general public doesn’t care who owns the funeral home. They care about the level of service being provided. We were overly concerned about that. We are still family operated and people associate the firm with us still. That's really the best of both worlds for everyone.
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