Where Death Comes Cheap

On Jan. 10, Diane and Randy Bathurst were having breakfast when Randy began to feel ill. He excused himself to lie down, and a moment later Diane heard a thud. When she arrived in the bedroom, Randy, 58, was unconscious on the floor. Paramedics couldn't resuscitate him; doctors said he had died instantly of a massive heart attack. Two days later, his widow is in a conference room in suburban Detroit meeting with Tom Macksoud, who runs a business called Simple Funerals. Bathurst, who has little income, wants a basic cremation with no casket and no service—just the way Randy would have wanted it. A traditional funeral home wanted to charge her $3,200. Macksoud's operation—with no employees, chapel or embalming room, just himself and the Chrysler Town & Country minivan he uses as a hearse—can do it for $1,100. "Thank you," Bathurst says, tearing up. "This means I can make two more house payments." Macksoud hugs her and, two days later, single-handedly retrieves her husband's 300-pound body from the rival funeral home and maneuvers it into his minivan, a process that takes more than an hour and leaves him exhausted. "Sometimes I think I should charge by the pound," he says. (Article continued below...)

With its revenue directly tied to the death rate, the $15 billion funeral industry has always been seen as recession-proof. No matter how bad the economy, people always die and families always spend money memorializing them, often equating dollars spent with respect paid, and rarely shopping around. Funeral homes tend to be the oldest businesses in town and generally earn solid profits—one reason why, in the 1990s, large, publicly traded corporations began rolling up the industry. But this recession is proving different—and as it deepens, families are beginning to seek ways to cut bills that were once seen as sacrosanct. Long-term trends (like the growing acceptance of cremation) are coalescing with the down economy to lead some industry veterans to sense a shift. "There's a major movement toward low-cost options right now," says R. Brian Burkhardt, a funeral director in Wheaton, Ill., who writes an industry blog called Your Funeral Guy. "Those businesses that adjust will do fine—and those that don't will be gone."

For Macksoud, 46, this penny-pinching couldn't come at a better time. For 20 years Macksoud worked in big funeral homes and eventually bought his own in Lapeer, Mich., a blue-collar town about 50 miles north of Detroit. But a few years ago he started noticing a change: fewer people were asking for the extravagant memorial service with the steel casket and limousine-led procession. "I realized all I needed was an office, a computer and my own car," he says. So in 2004 he sold his Lapeer business for $757,000, then took a few years off to spend time with his four kids.

Last fall he jumped back in with Simple Funerals, which he runs from a 1,500-square-foot storefront in a strip mall next to a dry cleaner. There's a sitting room with an oriental rug, and a wall of shelves holding urns (starting at $90). Toward the back, Macksoud displays three coffins, starting at $495. (He sends folks seeking something higher-end to Costco, which has carried caskets since 2004.) Macksoud subcontracts with traditional funeral homes to use their embalming rooms and to store bodies. With such low overhead, his customer's average bill is less than $1,200, compared with nearly $10,000 for a traditional funeral. "It's not about the size of your funeral home or how many Cadillacs you have—it's about the service you provide," he says.

Macksoud is 6 feet 1 with dark, thinning hair and a plain, soft-spoken manner. If you spot him driving around in his minivan—which carries a whiff of formaldehyde—you might guess he's an accountant or insurance agent. And while laypeople think funeral directors spend all day with dead bodies, much of Macksoud's business involves paperwork: ferrying death certificates to get physicians' signatures, dealing with the medical examiner and then off to the county clerk's office. Along the way, the phone connected to his dashboard-mounted navigation system rings every so often. "Simple Funerals," he says, keeping his eyes on the road. "This is Tom."