Listen to the episode:
On this episode, Laurie Barkman was joined by Michael Schoedinger, President of Schoedinger Funeral and Cremation Service, a 6th generation company; and Jill Hofmans, Executive Director of the Conway Center for Family Business in Columbus, Ohio. The conversation focused on transition planning from two key standpoints, leadership and financial succession, as well as innovating as a legacy business.
Key take-aways:
- It’s never too early to start succession planning. Succession is going to happen and the process can take 3-7 years to put everything into place.
- Leadership succession and financial succession are equally important, but totally different from a succession perspective.
- The succession journey regarding relationships and authority is the hardest part, especially if you have to fire your grandpa.
- Look for opportunities to innovate when there’s a market opportunity to build upon your legacy business.
Show Links
- Jill Hofmans LinkedIn
- The Conway Center for Family Business
- Michael Schoedinger LinkedIn
- Schoedinger Funeral and Cremation Service
- YPO Young Presidents Organization
- Grantor Retained Annuity Trust (GRAT)
- Recorded on SquadCast.fm
Full Transcript
Welcome to Succession Stories, insights for next generation entrepreneurs. I’m Laurie Barkman. I’ve spent my career bringing an entrepreneurial approach to mature companies struggling with change as an outside executive of a third generation, 120 year old company, I was part of a long-term succession plan. Now I work with entrepreneurs, privately held companies and family businesses to develop innovations that create enterprise value and transition plans to achieve their long-term goals. On this podcast, listen in as I talk with entrepreneurs who are driving innovation and culture change. I speak with owners who successfully transitioned their company and others who experienced disappointment along the way. Guests also include experts in multi-generational businesses and entrepreneurship. If you are a next generation entrepreneur looking for inspiration to grow and thrive, or an owner who can’t figure out the best way to transition their closely held company, this podcast is for you.
Laurie Barkman:
Welcome to Succession Stories. This episode is a little different because I’m joined by two guests, Mike Schoedinger and Jill Hofmans. Mike is President of Schoedinger Funeral and Cremation Service, a fifth and sixth generation company, and Jill is the Executive Director of The Conway Center for Family Business in Columbus, Ohio. Our conversation focused on transition planning from two key standpoints, leadership and financial succession.
Here’s some takeaways:
- It’s never too early to start succession planning. Succession is going to happen and the process can take up to three to seven years to put everything into place.
- The succession journey regarding relationships and authority is the hardest part, especially if you have to fire your grandpa
- Look for opportunities to innovate when there’s a market opportunity to build upon your legacy business.
Thanks for tuning in and I hope you enjoy the show.
Laurie Barkman:
Mike, Jill, thanks so much for joining me on the Succession Stories podcast. This is going to be fun to speak with both of you. I appreciate, Jill, you making the connection. I know that you and Mike go back a number of years, several years together. You’re both located in Columbus, Ohio, and the common link between you is: family owned businesses. And I’ll let each of you talk about the aspects for both of you. Jill, why don’t we start with you. You’re the Executive Director of The Conway Center for Family Business. What’s the mission of The Conway center? And tell us how you met Mike.
Jill Hofmans:
The mission of the Conway center is fourfold, but in a nutshell, we work with family owned businesses to help them continue to be profitable, successful, and to grow and mostly to help them transition to the next generation.
And we do that through multiple facets that I’m sure we’ll talk about later as the conversation unfolds, because there’s some best practices. And there’s also just some entrenched ideologies around how family businesses can best succeed. So Mike is a member of The Conway Center for Family Business. We’re a membership organization. He was one of the founding family business numbers to join 22-ish years ago, I believe. I’ve been with the center seven years in the director role for, for Michael and I met very early on. He’s a very engaged member. He’s been on our Advisory Board forever and he has recently joined our Board of Trustees. So that’s how I know Mike. He’s a sixth generation family owned business, very well respected in central Ohio and here in Columbus. And he has a lot of really good insight and information being in such a long-standing and well-regarded family owned business.
Michael Schoedinger:
Thank you.
Laurie Barkman:
Awesome. And we’ll hear from Mike in a second, I want to continue to ask you, Jill, another question. Over the years, what are the biggest challenges facing family business owners and how does the family business center help them work through those challenges?
Jill Hofmans:
Sure. So what I see is it’s pretty much twofold. So succession planning for sure. And wrapped up into that is estate planning. Nobody wants to talk about their mortality, nobody wants to deal with it. So not only are their estate plans not being done correctly, but then succession planning doesn’t really happen in a way that could be the most beneficial for the family business because the leading gen or the founders really don’t want to let go. So next gen development is part of that, leadership training and development is part of that. But really those hard conversations around succession planning really come into play and we do a lot around that with our members. We have access to service provider members for them that can help them write an estate plan, formulate a succession plan, but we do what I call, and I hate the term – the softer side – where we get family and business leaders and members together to talk about, “Hey, you don’t have to reinvent the wheel.”
Jill Hofmans:
You’re not alone in this. So we have family business members talk about this is what I had to do to save my family business and it was to fire my grandfather.
So you don’t learn about that at maybe the chamber meetings, but in ours where we really talk about that family business dynamic, you learn that, Oh, okay, wow. My aunt’s really not stepping up. And there are other people who are dealing with this really sometimes fraught situation. But also what the center does is we get family business leaders and employees together so they can learn best practices from each other. So there’s lots of joy in family businesses and running a family owned business and working for family businesses. But there’s also those challenging dynamics and I think we do a really good job of creating space for people to talk about that, flesh it out, and learn from each other.
Laurie Barkman:
It sounds like there’s a really solid mix of things from the long-term with succession planning and estate planning, and then the issues that become more short term, which is I need to fire my grandfather. That’s certainly a difficult one. And I like how you also mentioned the joy and the challenging dynamics. In this time, many people, many businesses are facing challenges related to COVID-19. It’s unprecedented for our generation, something we’ve never experienced. How are your members doing during this time of the pandemic?
Jill Hofmans:
Some are doing great, so my members who were in the trades or those essential businesses, they’re going to come out of this stronger than ever. I mean, as awful as this sounds, they’re going to have more access to a robust workforce, which has really been a challenge for our members over the last several years, especially here in central Ohio where access to qualified, quality candidates has been really challenging, so now that’ll change for them. I have some of my smaller mom and pop businesses that may not make it, and it’s a really challenging time. I’m finding a lot of our members, we’re still trying to connect with them through virtual programming and online programming, and they’re really meeting that connection and maintaining that connection with their family business cohort because of this. Such a challenging time.
Laurie Barkman:
Yeah, the connections with other people when you’re alone or you’re staying at home, it’s very difficult. And for those folks that are the essential businesses and being on the front lines, that’s also equally very difficult. So I’m glad you’re connecting and staying in touch with them.
Laurie Barkman:
Mike, you’re the President of Schoedinger Funeral and Cremation Service, a sixth generation entrepreneur, which is pretty fantastic. I understand that your family’s business was started in 1829 which is incredible. That’s an impressive succession story. I’d love for you to tell us about the business.
Mike Schoedinger:
Well, our founder came to America in 1829 but he did not start our business until 1855 and he was a wood craftsman. He was a carpenter and a cabinet maker and he would make cabinets and furniture and the population of Columbus was about 6,000 people. And when somebody died, they would say, “Hey Phillip, will you stop making your cabinet and make a coffin?” And he would do that. And as Columbus grew, he started making more coffins than anything else and became the local undertaker. So we have evolved over 165 years now into one of the largest privately owned funeral homes in America. We have 15 locations. We are building our 16th as we speak right now. And I have a brother and a cousin in the sixth generation with me. My father and my uncle still come to work every day but are retired. And then this year for the first time ever, the seventh generation started working. And I don’t even know if Jill knows this – my cousin’s college daughter came to work and my stepson came to work. And so we, for the first time ever, have seventh generation on the payroll.
Laurie Barkman:
That’s incredible. Seven generations would your great, great, great have ever imagined that?
Mike Schoedinger:
I know. I always get asked that question of if you could have dinner with anybody dead or alive who would it be? And I have three people, and one of them will be our founder. It would be awesome to talk to him. I mean so many of the ways we operate and our culture and our values probably all are in total alignment with the way they were in the 1800’s but it would just be fun to get it firsthand.
Laurie Barkman:
Yeah. Wouldn’t that be a fun dinner party. The word legacy keeps coming to mind when I think about your business for a lot of reasons and one of which has to do with the nature of what you do with families and helping them through periods of grief. But then also just for you and as you’d mentioned, the seventh generation, that’s such a rare thing these days. And so it speaks volumes about your company and the culture. I was hoping you could tell us a little bit about how long you’ve been involved and your background, and how did you know from a younger age that this is what you wanted to do? There’s lots of things that young professionals can choose to do after college. Why was this important to you?
Mike Schoedinger:
Well, ironically I wanted to be a doctor all of my youth. My shadow days in schools, I always followed a surgeon. I went to Miami University in Oxford, Ohio, pre-med. About my sophomore year, people that were older than me, that were in medical school or doctors, were all telling me the future of medicine is not what you think it’s going to be. This was in the ‘80’s and this thing called managed care was going to take over and insurance companies were going to be your boss, and it was just concepts I couldn’t understand. And then I thought about eight more years of school and residency and all the things that are needed to become a successful doctor. And at the same time my father is asking me, do you have any interest in being in the family business? And I said, well I have an interest, but you know, my passion has always been medicine.
Mike Schoedinger:
My grandma was a fourth generation physician, the first woman to ever graduate from the Ohio State Medical School. And my grandpa was a fourth generation funeral director. So I had legacy in both family members on the Schoedinger side of my grandparents. And my father said, I really wish you would get a business degree. And I said, well, I mean I could make every laugh about how naive I was about common sense of business. And my dad telling me I need to take accounting classes. And I said, Dad, I had a paper route since I was in sixth grade. I’m the first kid that ever had a checkbook. I’ve had lots of jobs. There’s always finding ways to make money, babysitting, mowed lawns, whatever. And my dad said in accounting on the first day you’ll learn the difference between a debit and a credit. What’s a debit?
Mike Schoedinger:
And I thought, I’ve never heard that word before, but I make up a pretty good answer. And I started talking about how when you owe people this and that, and he said, no, that’s debt. This is debit. Well, fast forward a couple years, I changed my major to business. Very thankful I did. He actually knew what he was talking about. And on the first day of accounting they told us what a debit was. And I remember calling him that night and explaining it to him and he just laughed. So I’m now getting ready to graduate from college. And dad said, I’m not pushing you in the business. I want this to be your total decision without any pressure. But I just need to know if you are or aren’t. And I said, well, I’m interviewing with companies like Hyatt Hotels, Proctor & Gamble, just some of the big companies that came to Miami and recruited.
Mike Schoedinger:
And the going rate for people getting hired was about $30,000 to $35,000 if you get a really good job, you can make $40,000 at a Proctor & Gamble or something like that. But that’s the 1% that get those. And I’m not saying I would get that, but what would my pay be at the funeral home? And he said, well, we start our apprentices at $23,000. And I said, hmm, well that’s a problem because I could make a lot more money somewhere else. And he said, then go do it. So that bluff didn’t work very good for me and he told me, you know, obviously I would be taken care of, but I’m not going to get any special treatment just because I’m a Schoedinger, and I made the decision to come into the business, did my apprenticeship. And for 30 years now I’ve never looked back.
Mike Schoedinger:
It’s a wonderful job. The ability to create healing experiences for families on their worst days of their life are just a wonderful thing to do. It is, as my friends call it, a glorious burden because everyone in town knows our family name. We have a strong brand and being around that long being citywide. And so I learned that lesson early on when I was 17 years old and was driving 45 miles an hour in a 35 mile an hour road and someone called my mom. It said, Michael is driving 10 miles an hour over the speed limit because they know my license plates and I thought, well shoot, I need to get rid of those license plates. But it is a wonderful thing to have our business right now. It is tough. I don’t want to get too off track, but my frustration now is with the virus limiting the amount of people that can gather for a funeral. I am really struggling with watching our families not be able to receive…the whole reason we have funerals is for the community to support you at this time of grief and they’re not able to do that. They can’t hug you, they can’t. There’s just no physical interaction and we need that. I mean, yeah, you can call and check up on them and try and deal with them on an emotional level, but a large part of the healing that goes on as the physical, and right now we’re not able to do that.
Laurie Barkman:
Yeah, and that is a really sad part of many sad things happening right now. It’s interesting how you called the business that you’re in a glorious burden. It is somewhat of a small fame that you probably have in your community for good reasons, but also because of the notoriety as you mentioned, because of the longstanding legacy of your family’s business. I was curious to learn a little bit more about that in terms of the continuity from one generation to the next. It’s not an easy thing. It probably takes planning and structure, and I was curious if your company has a Family Council or a Family Board and how they make big decisions like leadership succession.
Mike Schoedinger:
Yeah. I learned early on I thought the term succession planning was pretty common sense, but I learned early on by being a part of The Conway Family Business Center that there’s two elements to that. There’s the leadership succession and then there’s the financial succession and they are totally different from a leadership succession perspective. My company for five generations has always had two brothers, second, third and fourth generation and fifth. There were always two brothers, and one was pretty clearly the leader. And the other was, you know, very happy being the vice president kind of thing. Until my generation, when my cousin and I in our twenties and thirties and both seemed to be capable and willing and competent enough to assume a leadership role. So we had to deal with do we have one leader or two leaders, can you be co-Presidents? That kind of stuff. You go to one talk and hear that’s a disaster.
Mike Schoedinger:
And then you go to another talk and they say, that’s brilliant. So which one’s right? We addressed that when we were getting into our late thirties, we both wanted to be a part of an organization called the Young President’s Organization. They were only going to let one of us be a member and we had to do it before we were 40 so we made those decisions since I’m the oldest, as I was approaching 40 from a succession planning, meaning financial, yes, we have this huge company and we it valued, and I won’t spend too much time being too technical, but the value of our company on the books is way less than what it would be worth if we sold it on the open market. And we were transferring stock at that book value. And a consultant that we met through the family business center at the time said, hey, if any of you dies, the IRS comes in and they value your company, not what you think it’s worth, but what they say it’s worth.
Mike Schoedinger:
And that number is a big difference. Do you have enough life insurance to take care of that? And we didn’t. And so we started making plans back then to get the company out of the fourth generations’ name, which we did. And then in my thirties my dad and my uncle started gifting the company to my generation way earlier than they expected. But the opportunities, GRATs, which are Grantor Retained Annuity Trusts and a lot of other vehicles that exist in the financial world allowed us over 15 years to pass the entire company down to my generation without paying any capital gains taxes or anything like that. And so we have finished our leadership succession and our financial succession into my generation and now I have the oldest kids as they’re all entering their twenties and determining their career paths. And my cousin has three girls, one in college and the other two a little younger. We need to start thinking are they going to come into the business? And this was literally the first summer where some of them just kind of dipped their toe in the water.
Laurie Barkman:
So it sounds like your cousin has started to have that conversation. You mentioned his daughter coming in. Have you had any conversations with your children?
Mike Schoedinger:
I have. My conversations have been a lot more concrete because mine are older. My daughter has always wanted to be a teacher. She is now teaching and that is her dream and she is having a wonderful time teaching second graders, but it’s all done virtually right now. Her first year and she’s doing it now by computer is kind of challenging. My son still at Penn State is a business person. He may come in, my wife thinks they’ll come in, I don’t know. So, and my cousin says his three daughters have no interest. The one that came just did it because she was bored and needed money. So we’ll see if she actually liked being around it, exposed to it. It’ll probably be three to five more years before we have a good way of knowing if anyone’s interested or not.
Laurie Barkman:
Jill, is there anything that you have in terms of your experience here you want to add in?
Jill Hofmans:
So the transfer of ownership, we say is the easiest part. You sign over a piece of paper. Done. You’re an owner on the paper. He’s talking about GRATS, life insurance, all that. But transfer of ownership is easy. But the succession of authority, relationships, all those sorts of things that make the next generation leaders able and competent to run the family business that are really the hardest part. So the leading generation needs to let go to develop leadership to nurture their next gens in ways that allow them to fail while the leading gen is still there. That’s really important. And that’s what we do at the Family Business Center is we help them with those transitions, with those harder pieces than just signing over a piece of paper that says, boom, you’re the owner. So Schoedinger has done a good job with that. I think they’re in a very interesting place right now because there’s no real clear path forward to the seventh gen. So it’s going to be fun to watch how Michael and Randy navigate that. But it is hard. That succession of leadership, that’s the hard part. And all the things that go along with that.
Mike Schoedinger:
I should add in that one of the reasons why it’s not as urgent for us right now, it was while my cousin and I are in our fifties leading the organization. My brother is 16 years younger than me. And so if something happens, we have a person in their thirties who is a family member. So that’s why it’s less critical for us. There’s three of us as opposed if there was one of us, which so many family businesses face. What happens if the CEO is unable to lead? We’re not really, I mean, unless some major tragedy occurs, we’re okay then.
Laurie Barkman:
That’s a good point. Having that perspective is important.
Jill Hofmans:
It raises an interesting point about bringing in a non-family CEO or someone in the C-suite who’s non-family. Schoedinger always talks about that there will always be a Schoedinger in that role. Well sometimes that doesn’t happen. And so we also at the Conway Center, we have a peer group for non-family C-suite leaders. And how do you navigate being in a family owned business when you don’t have the last name, but you’re in a really important leadership role. So sometimes we say bridging the gap, bring in a non-family CEO. And that can be really challenging from the family business dynamic from a culture standpoint. But it can happen.
Laurie Barkman:
Thank you, that’s a really good point. Mike, the name of your family’s business sort of says it all when you talk about what the family does in terms of family funeral services and cremation. But I know that you take a different approach to help people celebrate life and start their healing process. And I think there’s a really great innovation story in there. Your website is pretty broad about the services that you offer, including having a dog that’s onsite to help people. Can you tell us about how some of these innovations came about?
Mike Schoedinger:
You know, we’re really proud to be the first of so many things in our industry, but even some things not in our industry. We were the second building in Columbus, Ohio to get air conditioning, which surprised me. We had a theater in town. We were the first funeral home to get a motorized hearse when everyone else had horses. I just can’t even imagine the cost of those back then. It’d be like today buying a million dollar chair when all your regular chairs look good, but this million dollar chair is the future. And you’d sit there and go, why would I spend a million dollars on the chair when no one else has one? But our forefathers did those kinds of things. And my father started the preplanning concept in the ‘70’s. We were first funeral and a webcast and live stream funerals.
Mike Schoedinger:
We have three grief therapy dogs. Funeral celebrants is a huge part of our business where a family does not have a minister to officiate the service. In the old days, when I started in the ‘80s, three fourths of our families had a pastor that they had a relationship with. Today, when you say to a family, who is your pastor, they might say, well, my cousin’s brothers, girlfriends, uncle is a minister in Indianapolis. Well that person doesn’t know the life that was lived. So we have these funeral celebrants that really learn about the life, create a themed funeral to honor that life, and just do amazing jobs are my favorite thing in our company is our two celebrants. But just making the shift for us, knowing that the grief support, the emotional element of experiencing a death was always outsourced to the clergy. You, they were your pastor, they helped you get through this.
Mike Schoedinger:
They helped you get through divorce. They helped you get through bankruptcy. All the losses we experienced in our life. And when those relationships didn’t exist as much as they used to, there was nobody helping. And so our funeral home in about 2007, as my cousin and I were moving into our leadership roles, we decided we have to provide that grief component to our families. We have to create these healing experiences because if we don’t, nobody will. And some families don’t have any services. Their dad said, when I die, just cremate me. Just put me in the ground, don’t spend any money. Don’t have any fuss. Well, he’s depriving his survivors of healing. And so we have lots of ways we do that now, even when the wishes are just cremate me. We have a candlelight memorial service every year, right before Christmas where we invite all the families that we serve back that for a free short service.
Mike Schoedinger:
Last year we had 1600 people come to this event. They all had deaths months ago, but yet they all come back and it just proves to me the need that people have. And some of these people had funerals, but most of them didn’t. And this is their way to have that closure to honor the life of their loved one. So we’re doing lots of things. We have a pet business. We serve more pet families than human families now. My cousin really grew our pet business. We serve over 6,000 families now with pet funerals every year. There’s just lots of things that we want to do. The frustration is what does the consumer want? What the consumer wants and what the consumer needs are often not in alignment and they just don’t know any better. And we have to have highly trained funeral directors that can explain to the family what they probably need even though they don’t know it and not sound salesy or not trying to look like we’re trying to make an extra dollar but it’s really what’s best.
Laurie Barkman:
That gives market understanding a whole deeper meaning, doesn’t it? They are really trying to understand the psychology of the situation, their financial means, and also just an emotional sensitivity to the situation. It is a business relationship, but your counselors that you have there and the people that create these celebrations sound very creative too.
Mike Schoedinger:
Yeah. I love when we, I mean my favorite funerals are where they are celebrations of life, whether it’s an Ohio State tailgate party themed funeral or we just had an April Fool’s Day themed funeral. It’s just when people really allow us to get creative and everybody that comes, everyone that’s there says, this is the coolest funeral I’ve ever been to. This is what I want when I die, but then they don’t do it. I mean, the majority of our funerals are still kind of the traditional regular way we did things. So there’s a disconnect there and I haven’t figured out how to narrow that disconnect.
Laurie Barkman:
The pet funerals is like a startup that really took off. If that’s grown beyond your expectations, how did that start up come about? You said it was your cousin’s idea?
Mike Schoedinger:
Well, we’ve always cremated pets. But we really decided to buy a second crematory and now a third. We went to the 150 veterinarians in this town and said, hey, we’re going to start offering these services. And we offer pet loss support. We helped the Ohio State Veterinary College start a pet hospice program. So a lot of things that were really nobody in the country was doing we did here. And we learned we could spend lots of money trying to advertise pet cremation and probably how often do we have a pet death in our family? Not very often. Or we could go to the channel where all of this business was referred through, which is veterinarians, and get them to recommend us. And that’s what we did. So it was a sacrifice of time to go visit a hundred vets, but it certainly has paid off and now some of them have become entrepreneurial and have become our competitors. And so we have to battle some of the channel that’s more vertically integrated than we are. And so that’s what makes America great, it’s the free enterprise system and may the best man win.
Laurie Barkman:
I think that’s a really interesting example of developing the channel.
Jill Hofmans:
I’m glad you brought up the pet piece, Michael, because there is a lot of innovation even for 165+ year old family business. Also you do a lot around the green burial and cremation issues right now too, don’t you? I feel like that’s something new and innovative that Schoedinger has gotten out in front of.
Mike Schoedinger:
Yes. When the concept of green burials are environmentally eco-friendly funerals, started becoming known I reached out through contacts, I had that we would like to be a part of this. They actually formed a green burial council and they charged $250 to join. And I thought, who knows how that $250 will go. And they sent me a press release, and I customize it to my market and I sent it out. And within 48 hours I had two interviews on TV, two interviews on radio, two newspapers. I mean it was a home run from a publicity perspective. Everyone’s like, wow, this is great. We’re going to be so environmentally friendly. And the green burials basically no embalming. The body goes in a biodegradable cascade is buried in the ground without a burial vault. I jokingly say we have to take a horse and buggy to the cemetery because if we drive our hearse we are burning gas and that’s not very green. So we have what I call light green funerals since a horse and buggy still really get you there very fast. But all this publicity was fantastic. And we do about four of these a year. It is just, once again, you ask people on the street, there’s been surveys, would you consider a green burial? And 20% of America says yes, but less than 1% does it, so what’s the difference between, oh that sounds cool and yes, I’m going to do that for me or my loved one is just a huge gap.
Laurie Barkman:
People want to know it’s available, but they don’t necessarily choose the option. And savvy marketing on your part to let the customer base know that it’s out there and it’s brand right for where you guys are from a service perspective.
Laurie Barkman:
Jill, I wanted to ask you if an owner of a closely held company is starting to think about succession planning, what are some things that they might consider?
Jill Hofmans:
I would say start thinking about it earlier than you think you need to. A good succession plan takes three to seven years we found. Succession happens no matter what and a succession will take place in your business. Whether that’s going out of business, whether that’s selling your business, whether that’s being acquired, whether that’s management buyout, or whether it’s succeeding to the next generation. Succession is going to happen. Surround yourself with good quality people. We always recommend having an advisory board to help guide some of those questions with people on there who know the ins and outs of some of the more technical sides. And the other thing is talk to other family businesses and see what they’re doing. Again, we always talk about we have a best practices right here with your cohort. You don’t need to reinvent the wheel. And although every family business is different, every one of them will have some sort of succession process.
Laurie Barkman:
Mike, what advice do you have for businesses at this time of incredible uncertainty as they think about their future and as they think about potential changes in their business, whether it’s pivoting to a different type of business, whether it’s regarding just staying afloat or whether it is looking down the road at their future?
Mike Schoedinger:
That is a really tough question because I have those same questions for my own organization. I always thought we were invincible and bulletproof, but we are experiencing struggles like everyone else. We have 200 associates and I want to provide for them. I have an obligation to provide for them health insurance, compensation, all the above. And with all the reduction in hours needed for funerals, we’ve had to lay some of our part-timers off because we don’t need them and we can’t afford them. Personally for us, the frustration is with we charge for the federal trade commission requires us to itemize everything we do. And so our funeral bill looks kind of like your phone bill. Instead of saying your phone is $50 for the month, it’s $0.12 cents for this, $0.09 for that, $1.50 and whatever. And we’re reducing our funeral bills, several thousand, her funeral, because we’re not using our automotive equipment, we’re not using our buildings.
Mike Schoedinger:
We don’t need register books for everyone to sign. We’re not ordering flowers. So our profit margin in our company is not thousands of dollars per funeral. So our forecast is not good for our own business. People say, well, you’re going to do more funerals. And that’s true. We may do more funerals if this virus really has a big outbreak in Columbus. My biggest fear as a business owner is our volume goes up 20% – 30%. And our full time staff that we still want to keep working is quarantined or becomes ill themselves. We have three people on quarantine now. They’re not sick, but they’re living with a spouse who was exposed, or whatever, and we can’t take those chances. So if that three quarantine people becomes 33 and my business grows, that’s a recipe for failure is not being able to serve our families.
Mike Schoedinger:
My peers right now in New York are struggling. They have lots of people calling off. I don’t want to get into all the details, but it is, the death rate in New York has spiked significantly. My one friend in long Island has business that increased 50%. He has nobody to work. Nobody has any money to pay their bills. It’s just awful. So I, you know, I look at the industries that are going to succeed through this, I am happy for them, but I really feel sad for the number of people that are having to suffer. My one friend here in town that’s a very successful restauranteur literally was on CNBC not too long ago saying we had to put our company to sleep, and laid off all 5,000 employees. It just breaks my heart.
My advice for everybody is take this time to fine tune your organization if things are slow.
Mike Schoedinger:
Do those projects that you said you weren’t going to do. If you have a low performing people, I hate to admit it, but this is the time to let them go. You know, they can get unemployment right away, at least in Ohio. I don’t know about every other state, but in Ohio they can get unemployment right away. They’re going to get two thirds of their pay. It’s not going to affect your unemployment ratings. So it’s a good time to make those tough decisions. And then just keep supporting one another.
Laurie Barkman:
That’s really good advice and it is a tough time for literally everybody. When you reflect on your experience as a next gen entrepreneur, what are some of the biggest lessons that you’ve learned?
Mike Schoedinger:
Some of the old adages that my grandpa taught me when I started, when I was 16, still ring true for me. We’ve always been a business that he wanted me to do. Every single thing that our employees have ever done. Meaning I’ve worked all night long on what we call night call. I’ve had to clean the building and clean toilets and he just always said, you’re no better than everybody else because your name is Schoedinger.
And his little colloquialism was we all put our pants on one leg at a time. And I always thought that was silly, but today I know what he means. We’re a family business and I think family businesses in general function so much differently than other kinds of businesses. Our cultures, our values are usually much more visible.
Mike Schoedinger:
They’re usually much more wholesome, for lack of a better word. A lot of times they’re faith based. If your company has an outward focus about the customer rather than an inward focus on profitability, I think you’re going to do okay. So those are some of our values.
My generation is so much more collaborative. My father and my grandfather’s generation was more just military and I’m the boss and this is what we’re going to do. And they issued the orders and we all carried them out. And I’m more about, Hey, let’s talk about this for a second. What’s everyone’s thoughts? And then, you know, hopefully there’s consensus, but if there’s not, sometimes you do have to make the decision and know that not everyone agreed with it, but hopefully it’s the right decision.
Laurie Barkman:
Thanks for sharing that. Jill, do you have a favorite saying or mantra regarding entrepreneurship?
Jill Hofmans:
I have a poster on my wall that greets me every time I come into my office and it says, “Good morning sunshine. The only way to find out if it will work is simple. Do it.” And that’s by Simon Sinek. And it really gives me the bravery to keep moving forward and making bold choices and decisions and I just appreciate seeing it every time I walk in my office.
Laurie Barkman:
Thank you so much.
Mike Schoedinger:
A poster in my office is “Tell me and I will forget. Show me and I may remember. Involve me and I will learn.”
Laurie Barkman:
That makes a ton of sense. Based on that story you just shared about what your grandfather told you Mike. It’s almost like he wrote that for you.
Mike Schoedinger:
I forget who said it. Someone like Ben Franklin or somebody famous. I don’t remember who. [Show Note: the quote is commonly attributed to Ben Franklin]
Laurie Barkman:
That’s a good way to wrap it up and we’ll end it here. Jill and Mike, thanks so much for being together on Succession Stories and for sharing your insights about next generation entrepreneurship and succession planning. Thanks both of you so much.
Mike Schoedinger and Jill Hofmans:
Thanks. Thank you.
Laurie Barkman:
Thanks for listening. I hope you enjoyed the episode. Three things before you go:
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