One of the unavoidable annoyances of human existence is death. But until science gets its act together to put an end to the practice, companies providing funeral services would continue to make money.
Funeral business has become one of the most predictable ventures on the planet. Players in the funeral home business can bank on the huge number of people dying in the country every day through accidents and diseases.
The Ashanti Regional Health Director, Dr Aaron Ofei, said over 86,000 people die of non-communicable diseases in the country every year. The World Health Organization, on its part, estimated that 338 million people will die of non-communicable diseases by 2030, unless there are interventions.
The paper learnt funeral home business is of interest to many financial institutions in the country due to its level of borrowing and asset performance. Many insurance companies such as ELAC and SIC have Funeral Insurance Policies and are now working closely with funeral homes to organize funerals for their customers.
Mr. Godfried Otu of Lashibi Funeral Homes Limited, who puts the growth rate of the industry at 30 per cent annually said: “It’s a good time to deal in death,”
Mr Otu, who is the Administrative Officer of the Funeral Homes told Economic Tribune funeral business is gradually gaining firm grounds, adding that, his outfit earns about GHC 10,000 a week.
“Even though we are making profits, we are also investing more into the business by bringing in experts from abroad to train our employees. It costs a funeral home more than GHC 25,000 to bring down experts to train staff,” he noted.
Services provided by the Funeral Homes include catering, cremation, decoration, writing of tributes, printing services, photography, among others. In Ghana, information indicates that a funeral director earns a little over GHC4, 500 a month.
The Bureau of Labor Statistics in the US puts the median annual salary of funeral directors in the United States of America at $52,210 although self-employed funeral home operators may earn more.
The Department said over the last twelve years, funeral costs across the globe had risen at a rate far outstripping inflation. The average cost of a funeral has increased over 74 per cent since 1985.
The Manager of Funeral Homes in Ghana, Obed Donny, told the Economic Tribune that his company has both local and foreign customers. “It will cost individuals only about GHC 2,500 to secure our services,” he stated.
The funeral homes industry is characterized by family-owned businesses, which typically have been owned for a few generations.
The business is a very traditional, highly fragmented industry, operated by individuals, often as family businesses with sons, and more recently daughters, of funeral directors following their parents into the business.
How Revenue Is Generated
Until the 1970’s, nearly 100 per cent of funeral homes were independently owned, but like many other industries, funeral homes have experienced a trend toward consolidation, which has resulted in a few nationally recognized companies.
Competition is not as intense as in other industries. Due to the sensitive nature of death in many cultures, advertising is usually precluded. This industry generally competes on non-price consideration. No-price factors include quality of services, extent of personal service provided, location, plush surroundings, reputation and consumer prior experience or knowledge of services.
Checks by Economic Tribune reveal that a funeral home generates its revenue from three basic sources: The sources include basic funeral home charges (preparation, services, transportation, among others,) which accounts for 67 per cent of revenue.
The second one, disposition charges (cemetery, crematory, mausoleum) accounts for 24 per cent of revenue. Third party charges which includes flowers, church, death certificates accounts for nine per cent revenue.
“As the saying goes, there is nothing certain in life except death and taxes, so there will always be a need for the funeral home business. However, this business isn’t for everyone, as it requires a special set of skills and personal characteristics,” Mr Jonathan Abiew of Edwin Funeral Homes Limited in Accra told Economic Tribune.
Source: Felix Dela Klutse/ Economic Tribune/Ghana