Underwriting call volume: trend, market share, and the effect of new competitors

Every funeral home valuation rests on one question: how many families will call next year? Earnings, debt capacity, and preneed maturities all flow from it. This guide shows the math a buyer uses to answer it, using public death data rather than the seller’s optimism. It belongs to our guide for funeral home buyers.

Why do buyers underwrite call volume first?

Because calls are the revenue base, and they are the number most often misread. The call-volume trend is the first input in the Four-Number Funeral Home Valuation Screen, ahead of revenue per call, margin, and preneed funding.

Most firms are small, so each lost family matters. In an October 2025 Funeral Director Daily article, consultant Glenn Gould cited NFDA estimates that 30% of firms handle fewer than 100 cases a year and 68% fewer than 200. At 150 calls, losing ten families is a 6.7% revenue hit. See our definition of call volume for what should and should not be counted.

How do you calculate market share from death data?

Divide the firm’s verified retail calls by the number of resident deaths in its service area for the same year. Do it for at least three years, using the same geography each time.

1. Define the service area, usually the home county plus any adjacent counties that supply a meaningful share of calls.
2. Pull deaths by county of residence from CDC WONDER for each year.
3. Remove trade cremations, shipping-only cases, and any calls from outside the service area from the firm’s count.
4. Divide calls by deaths, year by year, and record the share.

For a rough check where county data is thin, CDC’s FastStats page reports 3,072,666 U.S. deaths in 2024, a crude rate of 903.4 per 100,000 people. Older rural counties often run well above that national rate, so treat it as a floor test, not a substitute for local data.

How do you define the service area?

Let the firm’s own case files draw the map. Plot the residence of every decedent served over three years, by ZIP code or county, and set the service area where the large majority of calls come from.

In our practice, we look for the smallest set of counties that accounts for roughly four out of five calls, then treat the rest as outside business. That keeps the denominator honest. A firm near a county line may draw heavily from a neighboring county, and leaving that county out would overstate its share. A firm in a regional hub may serve families from three or four rural counties, and using only its home county would make its share look impossibly high.

Write the definition down and use it for every year. Changing the area between years is the fastest way to manufacture a trend that is not there.

How should you read a three-year call trend?

Compare the firm’s trend with the trend in local deaths. If calls fall faster than deaths, the firm is losing share; if they fall at the same pace, the market itself is shrinking.

The seller may describe this firm as “steady at around 220 calls.” The three-year average is 219, but the direction is down, and a buyer pays for the direction.

Seasonality and unusual years

Ask for calls by month, not only by year. Winter months usually run heavier, and a sale process that closes after a busy winter can make the trailing twelve months look better than the trend. Avoid base periods distorted by unusual mortality, such as pandemic years, when calls rose for reasons that will not repeat. If the only data available includes such a year, show the trend with and without it.

Preneed maturities as a leading indicator

The preneed register is a rough preview of future calls. Sort open contracts by the beneficiary’s age to see how many are likely to mature in the next five years. A deep, recently sold backlog suggests families still choose the firm in advance. A thin or aging backlog with few new contracts suggests the community’s next generation is choosing elsewhere. Remember that revocable contracts can transfer out, so treat this as a signal, not a guarantee.

Do rising national deaths protect a funeral home’s calls?

Only partly. CDC’s provisional 2025 mortality report counted 3,094,593 deaths, more than in 2024, even though the age-adjusted death rate fell 4.6% to 689.2 per 100,000, the lowest on record.

The count rose because the population is older, and funeral homes serve counts, not rates. Still, the national number says little about a single town. Local deaths depend on the county’s age structure and migration, and share depends on competition. A buyer should never credit a firm with national growth it has not earned locally.

How does case mix change the value of each call?

A call is worth what the family buys, and that is shifting toward cremation. The Cremation Association of North America reports a 2025 U.S. cremation rate of 62.8% and projects 69.1% by 2030.

Split the firm’s calls into traditional burial, cremation with services, and direct cremation for each year, and multiply by revenue per call in each category. A firm can hold its call count while revenue falls if burials are turning into direct cremations. CANA’s 2026 report says the annual growth rate has slowed from 1.58% to 1.33% a year, but the direction has not changed. Our guide to reading a funeral home P&L shows how mix flows through to SDE, and our guide to buying a direct-cremation business covers the low-price end of the market.

How do you model the effect of a new competitor?

Express the threat as share points lost and multiply by revenue per lost call and an incremental margin. Then decide whether the price, a holdback, or your walk-away point should absorb it.

Competition is not hypothetical. Service Corporation International’s 2025 Form 10-K reports $18.5 million spent on real estate for new locations and calls acquisitions and new construction “typically” its highest relative return opportunities. Check zoning agendas, building permits, and crematory permit filings in the service area during diligence.

The direct-cremation scenario loses about as many calls as the drift case but much less money, because the lost calls carry low revenue. The full-service entrant is the real threat to value. Those effects are not small next to the firm’s earnings: on an illustrative adjusted EBITDA of $250,000, the full-service scenario removes almost half. Run your own scenarios with local revenue per call, and test the margin assumption against the firm’s actual cost structure, since a firm with high fixed costs loses more profit on each missing family.

How should call-volume findings change the offer?

Use the trend-adjusted call count, not the seller’s average, as the base for earnings and price. If share is falling, the offer should reflect the projected count, not the historical one.

Bring the share table to the negotiation, using our guide to negotiating price from diligence findings. Where buyer and seller disagree about the future, some deals bridge the gap with call-volume earnouts, though SBA-financed acquisitions prohibit earnouts. Feed the verified count into the rest of your due diligence workstreams so every later number starts from the same base.