Few things in life, they say, are as certain as death. That’s why some believe the funeral business is almost recession-proof. But don’t tell that to James Fender, whose six-year-old Lexington funeral home business struggled during the recession like nearly every other venture. People are opting for less-expensive funeral services.
“There are so many things to consider. When I started out and made my business projections, I established them based on a higher average funeral cost. That was before the economy went bad,” said Fender.
Fender Funeral Directors now does more cremations than in the past. “You have to do what you have to do, and I adapted and changed with the times. People may not have the money they used to have for a funeral,” he said.
Fender got assistance in launching his business from Commerce Lexington and a consortium of 17 local banks that are committed to making loans to enhance opportunities for minorities, women and small businesses. It’s called the Access Loan Program.
Tyrone Tyra, vice president, community and minority business development for Commerce Lexington identified a two-step process.
“We get their business plan, financials and theme together and give it to our subcommittee made up of three bankers and two community people,” explained Tyra. They decide if the proposal goes to the full committee. We work with the entrepreneur to create a 10- to 12-minute presentation, during which they’ll talk about their project.”
Tyra said Access committee members read the business plans and sincerely want to help. Most of the time, bankers make offers in a couple of days. But sometimes they aren’t impressed, and it doesn’t work out.
Tyra said the bank needs these customers, and vice versa.
“Even if you do better than your business projections, you’ll still need money to help you along,” Tyra said. “[To the bankers] you’re not just a deposit, you’re a person who’s going to help them expand their small-business portfolio.”
Fender is familiar with the challenges facing a new funeral home operator entering a market.
“It was rough,” he said. “I went into a field that is somewhat of a closed society. Most funeral homes are family-owned, and it’s hard to break in and get established. It’s a specialized field. People are creatures of habit, and for generations, some families have gone to the same funeral home.”
Another Access Loan customer is Allison Davis, who opened a Lexington business called Wild Thyme Cooking School last August.
“We do cooking classes for all ages and are a culinary event center. We can hold events for large groups and also do business team-building events,” said Davis.
She has a business administration degree from Eastern Kentucky University. At first, she was looking to purchase a franchise with her company’s basic concept. “But after my first meeting with the loan program, I realized I had the resources and knowledge to do this venture on my own,” said Davis.
The Access team helped Davis connect with business groups such as Minority Business Leaders and Women Leading Kentucky, which provided valuable networking opportunities.
Davis said one challenge was getting all of her ideas down in writing, which wasn’t very glamorous or nearly as fun as setting up or running the business. Another challenge was “being tough on yourself and getting all your financials to be as close as possible,” she said.
Davis spent a year on her Wild Thyme business plan and got the Access Loan staff whatever information it needed. They gave her feedback on the materials and helped her finalize the paperwork. It was much easier than she expected.
The system is working, Davis said. “When you go to the loan presentation, you are going to make a much stronger first impression and be more credible. It was very easy,” she said.
Davis said nine banks looked at her application and five showed interest. She ultimately chose Community Trust Bank to be her partner, but others were impressed with her concept too.
“One of our bank presidents read her business plan and came over to sit in on her presentation — the first time a bank president had ever done that,” said Tyra, of his pupil. “She has an awesome support network. She took a tried-and-true concept and put her own nuances on it. She’s doing really well.”
Tyra is also pleased with what Fender has accomplished.
“I was so impressed. He started going to [mortuary] school, working full-time and had a family. He marched on with the process, and now his funeral home has been open for a half-dozen years and is getting established,” Tyra said.
The willingness of the entrepreneur to do the things necessary to be successful is the key.
“The entrepreneurs we feature in Commerce Lexington’s Business Focus have already gotten it. Not only are they good at their craft but are good stewards of their business activity,” Tyra said. “You never want to turn down a good idea, because it could mean jobs.”