When Darin Hoffman's position as regional sales manager for a North American funeral home group was eliminated last November, his reaction wasn't what you might expect. Rather than feeling angry, panicked or even upset, Hoffman just thought of it as good timing.
Even though the Winnipeg resident had no immediate plans to leave his job and would have happily stayed on longer, there was an alternative career plan already coming down the pipe line. And the unexpected lay-off just meant he could make it happen sooner.
Hoffman had been working in the funeral home industry for 20 years. A licensed funeral home director, he'd toyed with the idea of opening his own place for some time. In fact, he and two industry associates, Shawn Arnason and Pat Potenza, had been discussing the possibility of going out on their own for about a year.
"The three of us had been talking about some ideas and felt we had some unique ones that would separate us from the competition," says Hoffman.
Since he no longer had a day job, he took the lead that winter, and began working on a business plan and fine tuning their concept for their funeral home, to be called Mosaic Funeral, Cremation & Cemetery Services. The partners planned to focus on technology and community outreach to help them stand apart from the competition.
While he was perfecting their plan, the three partners began looking at locations, which was a difficult task because they were looking for rather large space of at least 6,000 square feet.
They thought they'd found it in early January when they saw a building in the northwest area of Winnipeg, but their negotiations with the landlord stalled and they decided to move on. Half a dozen locations later, they got a call back from the landlord and managed to work out an acceptable deal.
By then, Hoffman and his partners had begun the licensing process, which varies by province. In their case, they had to secure a license from Manitoba's Board of Administration. Aside from standard background checks, and the requirement of a "preparation room" in the facility to handle remains, the main regulation is that a funeral home must be run by a licensed funeral home director. Hoffman had no worries there: Both he and Arnason have decades of experience as licensed funeral directors.
Securing a building permit, however, was another story. Hoffman and his partners had to completely gut the inside of the building. But before the city would grant them a building permit, they had to sort out issues surrounding their outside space: Specifically, they had to get approval for their landscaping plans and, the real sticking point, expanding their parking lot to 62 spaces. Only then, would the city approve their building permit.
But eager to get going, they had their contractor begin work immediately, knowing that if the city declined their request down the line, they'd be out tens of thousands of dollars. "It was a risk, but we saw it as a calculated risk," says Hoffman.
In the end, all of their approvals came in. Still, Hoffman estimates they lost about a month of time, and revenues. He chalks it up to a loss of about $20,000.
The work on the existing structure (knocking down walls, installing new floors and ceilings, and building a kitchen, cooling facility for remains, preparation room, selection room for caskets and urns, chapel and a reception area) took three months and set them back some $300,000.
As the construction went on, the partners started sourcing their equipment, a process that took about three months. They were in the market for everything from a stainless steel prep table (about $5,000) to an embalming machine (about $4,000) and state of the art sound equipment and two plasma TVs ($10,000). Then there were the caskets and urns, which they dropped about $15,000 on.
They also needed to do some car shopping, for both the hearse and the lead car. Rather than purchasing the vehicles, they decided to lease.
By the time they'd made headway with construction and equipment, they started thinking about marketing. Hoffman knew they had to focus on what made them different to attract potential clients' attention.
"If you look around the industry, it's been really stagnant and we had found a way to break out of that," says Hoffman.
The first way Mosaic tries to differentiate itself is through what they call their renewal foundation for cemeteries, a program in which they fundraise in an effort to help small or church cemeteries in need of assistance.
"Church cemeteries are depending on congregations, which aren't what they used to be, and small cemeteries are depending on small town populations, which are dwindling," says Hoffman. The three partners hope that their efforts with this program shows their clients, and potential clients, what values behind Mosaic are all about. "This is a goodwill gesture."
Another differentiating point is their use of technology, including a state of the art web page with the ability to accept online condolences and light candles for the deceased. This, Hoffman acknowledges, is hardly breaking ground in the funeral industry. But Mosaic went further. Hoffman says they are one of the first funeral homes in Canada to offer web casting of funeral services, which can be watched live or through an archive.
The Mosaic team has actually turned this into a revenue-generating opportunity by partnering with the web firm that developed this feature and rolling it out in other funeral homes. Hoffman says there are other homes now experimenting with funeral web services, but they're simply using web cams without back-end servers recording the services.
Hoffman knew all of this had to come through in their marketing materials, so he handled the work himself. He developed all the required forms, as well as a pamphlet, and sent them out to be printed.
Mosaic has also taken advantage of print and radio advertising. But another way they get the word out about their business is through connecting with the public through lunch-and-learns with various groups, be it a seniors group or a corporate group.
After about six months of planning, Hoffman, Arnason and Potenza opened the doors to Mosaic Funeral, Cremation & Cemetery Services. So far, so good, says Hoffman, even though breaking into the funeral market isn't easy. Most markets are pretty well saturated, and then there's the worry of conglomerates. But Hoffman says that this concern is somewhat exaggerated and that of the some 40,000 funeral homes in North America, only about 5,000 are corporately owned.
Despite the competition, Hoffman and his partners feel good about their progress since opening in May. "Our competitors certainly don't like us," says Hoffman. "But we're getting a great response from the public."
How they did it
When Darin Hoffman lost his job at a North American funeral home group due to restructuring, he didn't skip a beat. The Winnipeg resident and two industry associates were just about ready to break out on their own and open their own funeral home anyway. They opened the doors to Mosaic Funeral, Cremation & Cemetery Services this May.
Start-up costs Construction $300,000 Furniture and equipment $80,000 Inventory $15,000 (caskets and urns, professional make up, embalming supplies) Web site $2,300 Advertising $50,000 Printing $35,000 (forms and marketing materials) Legal costs $5,000
Monthly costs Insurance $300 Rent and utilities $4,500 Car payments $1,300 (hearse and lead car) Staff $5,000 Advertising $1,000 Inventory $2,000 Telephones $1,300 (including Yellow Page ads)
Number of $3,500 funerals they need to sell a month to break even: 5