Fanagans managing the business of funerals

* Stepping in to lead a business that had been family run for six generations is inevitably a challenge. But, having managed the logistics around the visits of seven US presidents to Ireland, Europe and Saudi Arabia, Bryan Murphy was comfortable it was a challenge he could meet.

More importantly, he liked the feel of the business.

“The family ethos, the family values. It’s absolutely essential that we keep that family business feel,” he says. “And they’re stronger probably than ever now, because the family is able to concentrate on the networking ambassadorial stuff – all of that which drives the business forward and makes Fanagans what it is today.”

Fanagans is, by a distance, the largest funeral business in Ireland. It handles about 2,200 funerals a year compared, it says, with about 1,500 at its nearest rival.

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Founded in 1819, it acquired the Aungier Street premises, which is still the group’s headquarters, in 1837.

Murphy is not the only outsider in the business, with David Simpson, the accountant who cofounded Simpson Xavier, now known as BDO, chairing the board. But it is still very much a Fanagan family enterprise. Family members hold all the shares in the group and three Fanagans sit on the company’s board.

Several family members are very actively involved in the business on a day-to-day basis and Murphy says it continues to be based around the values, traditions and culture the family have put in place over many generations.

But they have moved in recent years to bring outside voices into the business, initially bringing Institute of Directors executive Eileen Gleeson on board as a non-executive director to make sure the group’s governance was up to scratch.

“I think the family in fairness, after doing a fantastic job for so long, did recognise that a little bit of outside perspective might be a good thing,” Murphy says.

“So, the next stage of that then was maybe looking at some of the strategic areas and how do we manage with the competition, how do we manage to grow our market share? And the difficulty of doing that while being a full-time funeral arranger, whether it be Jody or Alan or David or Robert [Fanagan], it’s phenomenal what they’ve managed to achieve – wearing two full-time hats, very difficult.

“I’m rushed off my feet, and I don’t have to do that part! But I’m free to concentrate on the strategic parts of the business.

Fanagans is avowedly a Dublin business: 10 of its 11 locations are inside the M50 and the other in just outside the ring road, in Tallaght. It oversees one in four funerals in Dublin. And as it considers options for growth, Murphy expects the focus over coming years to be on strengthening its presence north of the Liffey and in the fast-growing suburbs to the west of the city.

A funeral business is, by its nature, limited. The customer base is a finite market. “In this business, you can’t create a demand for something. You are what you are, and the death rate is what the death rate is,” Murphy says.

That explains its generally steady rather than spectacular growth. Turnover and pretax profit in 2021, the last year for which figures have been filed, were both up about 2 per cent on €10.8 million and €827,000 respectively.

Turnover for 2022 grew more strongly, to €11.8 million, according to figures due to be filed in the coming weeks. But operating profit was down to €770,000 and net profit to €414,000 as, in common with business generally, Fanagans and its suppliers experienced severe cost pressures.

That led to a low single-digit price rise for customers last year, Murphy says. Given that lagged the surge in costs, it has affected the company’s bottom line.

“If we have to lower our profit expectation over a year or two to do that, then that’s what we do. We take a longer-term view. So, we look after our families, they will look after us. In the medium term, we will do small price rises. If we were to do a profit take at this point, that gets remembered, and it would go against everything the company believes in.

“While obviously shareholder value is very important at the end of day in any business, the shareholder is the family and their main concern here is the longevity of the business and the sustainability over the very long term. And to make sure that the next generation who come into the business have a really viable, strong business that makes a profit on a continuing basis, at a level which is acceptable to us but is also acceptable to our client family base.”

With that limited pool of customers, the only way to grow market share is by acquisition or by taking funerals off our competitors. Both are difficult and potentially capital intensive to do, so, Murphy says, “it makes us very prudent”.

Innovation

But that doesn’t mean it is lacking in innovation, especially in recent years.

Covid may not have led to fundamental changes in the nature of funerals by itself, although it did of necessity bring the streaming of gatherings from funeral homes and services from churches into the mainstream. Such facilities are now more or less taken for granted.

Elsewhere, the pandemic accelerated trends that were already emerging. The single biggest of those, according to Murphy, has been the rise of cremation, especially in the Dublin area. He says that more than 50 per cent of funerals handled by Fanagans involve cremation.

In part, that is down to cost for families – cremation is certainly cheaper than burial unless you already have a family plot – and to convenience but it is also a reflection of the increase in demand for secular services which the industry expects to grow further.

But, for all that, Murphy says about 80 per cent of funerals still involve church services.

Dublin has four crematoriums and demand is heavy. Fanagans and others in the industry are well aware of the need for investment in more facilities as demand increases but, he concedes, “having looked at this ourselves at certain stages in the past, it is very capital expenditure intensive . . . and the payback period is significant”.

There’s certainly no suggestion that Fanagans is looking at developing a crematorium at the moment although, as Murphy puts it, the company continually examines what it might do better in-house than it currently does with third parties.

“If an opportunity came up and it stacked up for us business-wise and that our families were seeing a demand for it, for us to do something in that space, we’d have a look at it again but I think we’re currently happy with the service that we’re provided by other parties,” he says.

Another trend has been the phasing out of the formal removal a day ahead of a funeral, which Murphy says now accounts for only about 10 per cent of funerals. Again, cost is a factor but so too has been the pressure on resources, with the number of clergy continuing to fall and those who remain finding themselves ever more stretched.

In its place has been a greater emphasis on using funeral homes for family gatherings and returning to the more traditional Irish practice of bringing the body of the loved one home for a night or two ahead of a funeral.

Fanagans, like its rivals, has had to reconsider funeral home facilities, including creating bigger spaces for greater numbers who might want to spend time with the former friend or family member ahead of a church or other service.

How those spaces look has also changed dramatically. At Fanagans’ Aungier Street headquarters, the focus now is on comfort with lots of comfortable seating, warm colours and an array of lighting. Every chapel has screens to accommodate slide shows and music during reposals with families increasingly providing content.

Gone are the dark mahogany fittings, the net curtains and the gloom.

Eco-friendly is also a watchword for the modern funeral director, and not just with more environmentally friendly coffins.

We’re very lucky in that the funeral expense and funeral costs are seen as a debt of honour here. We trust people, that they will pay us and they trust us to carry out the service

“Our eco-credentials are always something we’re conscious of, whether that be looking at our fleet, the products that we use, our carbon footprint,” Murphy says. “We’re very conscious that our clients, ourselves and our own kids want to know that we’re doing things right and leaving them – certainly not a worse place than we’ve got, but preferably better.

“If we can source locally, we will. We normally find that the quality, follow-up, all of that is better if you use local suppliers. And you build that relationship with them as well. So, that’s extremely important to us.”

Fanagans sources all its coffins from Irish suppliers, including Green Coffins in Donegal which provides its wicker and eco coffin options.

It’s always possible to get things cheaper and at volume from other sources, he acknowledges, but he says that’s not the end of the market Fanagans wants to be in. “We go quality and that’s stood us well.”

Funeral culture

He is aware, of course, of what are referred to in the industry as the “supermarket” operators that have sized up the Irish market in the past without making any headway but which certainly are a feature in the UK.

“The businesses came in thinking they could just superimpose a UK or US model on Irish funeral culture. Whereas in Irish culture it is very, very different. If you are trying to organise a funeral in the UK, you could be waiting weeks. We start at the other end of the scale – what does the family want? And everything else flows from that.

“The culture of the Irish funeral is a lovely thing and I wouldn’t like to see it change,” he says, accepting that “for us it’s good too, I suppose. It represents a barrier to entry to the market”.

Of course, funerals are not cheap, costing an average of between €5,000 and €7,500, and they are something people very often find themselves dealing with unexpectedly and when they are very vulnerable. The reasonably tight window for most Irish funerals means quick decisions of the myriad moving parts of a service.

“For us, the clue is in the name, we are funeral directors,” Murphy says. “And it’s our job to direct and to guide families. This is our business, this is our livelihood, this is what we do. And people appreciate that, they appreciate being guided. They’re just looking for help. So, we are here to help them.”

It helps that the industry is not now as male dominated as it once was. Half of Fanagans’ funeral organisers are women and so too is the company’s entire embalming team. Murphy says that has proven a big success, not least that greater familiarity with things like make-up has helped in ensuring loved ones look as their families remember them.

Families are generally asked to pay up front for “disbursements” – payments for celebrants, flowers, singers etc – with the funeral directors’ bill coming later when things have calmed down. Murphy says bad debts are “minuscule”.

“We’re very lucky in that the funeral expense and funeral costs are seen as a debt of honour here. We trust people, that they will pay us and they trust us to carry out the service. And it works very well. It can be hard to get your head around when you start, but it works very well.

“Reputation is everything for us. It really is, it’s critical,” Murphy says. “And what keeps you up at night is the reputation and the preservation of that reputation. When you’re in a company that’s 204 years old, certainly my first day in here that weighed on my shoulders very heavily.

“So we don’t have that short-termism that a lot of companies might have; ours is always a long-term outlook.”

CV

Name: Bryan Murphy

Age: 54

Position: Chief executive, Fanagans Funeral Directors

Family: Married to Christina Murphy, they have three daughters – Orla, Saoirse and Allanah – and two dogs, also women, so he’s well outnumbered at home.

Interests: Car and motorbikes have been a lifelong passion.

Something you might expect: In a business where structure and organisation are everything, his background in logistics, learned mostly on the job and at night classes, is no surprise.

Something that might surprise: He came to Fanagans from the US embassy where he started as a supervisor in the motor pool before moving into operations roles that saw him heavily involved in the visits to Ireland by every US president and senior administration official in recent years.

* This article was edited on Friday, November 17th to correct the number of funerals handled.