A funeral home which can also be referred to as a funeral parlor is a business that provides interment and funeral services for the dead. These services may include a prepared wake and funeral, and the provision of a chapel for the funeral.

The funeral home industry includes companies that conduct funerals and prepare the deceased for burial or interment. Funeral homes are also involved in the transportation of the dead and the sale of caskets and other related funeral merchandise.

Statistics have it that in the United States of America in 2022, the market size of funeral homes was estimated at 18 billion U.S. dollars, a slight increase from 15.9 billion U.S. dollars in the previous year.

Steps on How to Start a Funeral Home Business

  1. Conduct Market Research

The first step in the market research process for your funeral home business is to develop market-based research questions in line with your overall business goal and objective. Please note that market research helps businesses measure their brand reputation in the market among their target audience over some time.

It is a great way to measure progress for your business as well as compare your status to your competitors to see where you are trailing or where you have an advantage and what you need to do to stay competitive.

a. Who is the Target Market for a Funeral Home Business?
  • Insurance companies
  • Owners of mortuaries
  • Retirees and Pensioners
  • Hospitals
  • Government Agencies
b. Is Funeral Home Business a Profitable Business?

Yes, the funeral home business can be very profitable. This can be supported by the fact that the U.S funeral market is currently worth around $20 billion annually, with over 2.4 million funerals taking place each year.

c. Are There Existing Niches in the Industry?

Yes, there are niche ideas in the funeral home business. Here are some of them;

  • Funeral Homes Services
  • Operating Funeral Homes Combined with Crematories
  • Pet Funeral & Cremation
d. Who are the Major Competitors?
  • Service Corporation International (SCI)
  • Loewen Group Inc.
  • Stewart Enterprises Inc.
  • Hillenbrand Inc.
  • Carriage Services, Inc.
  • Nirvana Asia Group
  • Legacy Center Funeral Home
  • Matthews International
  • Invocare
  • Co-operative Group Limited
  • Dignity Plc
  • StoneMor Partners L.P.
  • Fu Shou Yuan International
  • Stark Funeral Home
  • Casper Funeral & Cremation Services
  • Keefe Funeral Homes
  • Rogers Funeral Home
  • McHoul Family Funeral Home
  • Mount Auburn Cemetery
  • DeVito Funeral Home
e. Are There County or State Regulations or Zoning Laws for Funeral Home Business

Yes, there are county or state regulations and zoning laws for funeral home businesses, and players in this industry are expected to work with the existing regulations governing such business in the county or state where the business is domiciled.

Please note that most states in the U.S have upheld zoning ordinances that limit funeral homes to less than 5% of the town’s acreage, preventing new funeral homes from being built even in areas zoned for commercial use that already have other funeral homes, and using property definitions that expressly expand residential use to include public and semi-public buildings but carve-out funeral homes so that they cannot be established in residential areas.

f. Is There a Franchise for the Funeral Home Business?

Yes, there are franchise opportunities for the funeral home business. Here are some of them;

  • America’s First Funeral Home Franchise
  • Legacy Center Funeral Home Franchise
g. What Do You Need to Start a Funeral Home Business?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • A Good facility
  • Computers, Laptops, and Servers
  • EIN (Employer Identification Number)/Federal Tax ID Number.
  • A Corporate Bank Account
  • Equipment and Tools
  • Employees
  • Startup Capital
  1. Choose a Memorable Business Name

When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.

Some of the catchy business name ideas suitable for a funeral home business are;

Creative Funeral Home Business Name ideas
  • Still Alive© Funeral Home, Inc.
  • Broad Street® Funeral Home, LLC
  • Glorious Transition© Funeral Home, Inc.
  • Star Pros® Funeral Home, Inc.
  • Home Call™ Funeral Home, Inc.
  • Becky and Co™ Funeral Home, LLC.
  • Houston House© Funeral Home, LLC
  • Room 101® Funeral Home, Inc.
  • Care Pros© Funeral Home, Inc.
  • Green Zone© Funeral Home, Inc.
  • Fam Zone® Funeral Home, Inc.
  • Stella Martins® Funeral Home, LLC
  • Othniel Jabez® Funeral Home, Inc.
  • White Block® Funeral Home, Inc.
  • Glass House® Funeral Home, LLC.
  • Sherry Grace® Funeral Home, Inc.
  • Beyond the Cloud® Funeral Home, LLC
  • Roll Call® Funeral Home, LLC
  • Open Heavens® Funeral Home, LLC
  • Pearly Gate® Funeral Home, LLC.
  1. Register Your Business

a. What Type of Business Structure is Best for Funeral Home Business?

Even though there are several options when it comes to the business structure for a funeral home business, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.

Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.

b. Steps to Form an LLC
  • Choose a Name for Your LLC.
  • File Articles of Organization.
  • Choose a registered agent.
  • Decide on member vs. manager management.
  • Create an LLC operating agreement.
  • Comply with other tax and regulatory requirements.
  • File annual reports.
c. What Type of License is Needed to Open a Funeral Home Business?
  • A Funeral Director/Embalmer’s License
  • General Business License
  • Health and Safety Permit
  • Zonal Permits (Applicable in some cities)
  • Signage Permit
  • Operational State Facility Inspections
d. What Type of Certification is Needed to Open a Funeral Home Business?

In the United States of America and most countries of the world, you do not need any special certification to own and operate a funeral home.

e. What Documents are Needed to Open a Funeral Home Business?
  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit and Building Approval
  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

If you are considering starting a funeral home business, usually you may not have any need to file for intellectual property protection or trademark.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Funeral Home Business

When it comes to starting a funeral home business, the startup costs could range from $150,000 to over $200,000 depending on how much equipment the business owner decides to purchase and the facility leased. Please note that this amount includes the salaries of all staff for the first month of operation.

b. What are the Costs Involved in Starting a Funeral Home Business?
  • Business Registration Fees – $750.
  • Legal expenses for obtaining licenses and permits – $7,300.
  • Marketing, Branding and Promotions – $5,000.
  • Business Consultant Fee – $7,500.
  • Insurance – $5,400.
  • Rent/lease – $85,000
  • Other start-up expenses like commercial satellite TV subscriptions, and phone and utility deposits ($2,800).
  • Operational Cost (salaries of employees, payments of bills et al) – $60,000
  • Start-up inventory – $25,000
  • Store Equipment (cash register, security, ventilation, signage) – $14,750
  • Website: $1,500
  • Miscellaneous: $5,000
c. What Factors Determine the Cost of Opening a Funeral Home Business?
  • The size of the funeral home business
  • The choice of location
  • The required licenses and permits
  • The type of facility
  • The additional services offerings
  • The cost for branding, promotion, and marketing of the funeral home business
  • The cost of furnishing and equipping the facility
  • The cost of insurance
  • The cost of registering the business
  • Source of your supplies and ongoing expenses
  • Cost of recruiting and training your staff
  • The cost for the purchase and customizing of uniforms
  • The cost of the grand opening of the funeral home business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

It is not compulsory to build a new facility for your funeral home business, but if you have the required finance (anything from $120,000), it will pay you to build your own facility. The truth is that building or reconstructing a facility will help you come up with a facility that will perfectly fit into your overall business goals and vision.

e. What are the Ongoing Expenses of a Funeral Home Business?
  • Supplies (embalming chemicals, cremation supplies, mausoleum, urn vaults, vases, burial garments, flowers and caskets et al)
  • Utility bills (internet subscriptions, phone bills, signage, and software renewal fees et al)
  • Equipment maintenance
  • Salaries of employees
f. What is the Average Salary of your Staff?
  • Chief Funeral Director (President) – $55,000 Per Year
  • Funeral Director (Mortician) – $38,000 Per Year
  • Sales and Marketing Executive – $32,500 Per Year
  • Accountant – $32,000 Per Year
  • Client Service Executive (Help Desk Office) -$28,000 Per Year
  • Mortician Assistant – $26,000 Per Year
  • Ambulance Driver – $25,000 Per Year
g. How Do You Get Funding to Start a Funeral Home Business?
  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for a loan from your bank/banks
  • Source for soft loans from your family members and friends.
  1. Write a Business Plan

a. Executive Summary

Broad Street® Funeral Home, LLC is a standard, licensed, and government-approved funeral home service provider that will be located in the heart of Miami Beach, Florida – United States of America. We have been able to acquire a standard corner–piece facility that is highly suitable for the kind of deathcare practice we want to operate.

Broad Street® Funeral Home, LLC will operate 24 hours 7 days a week. Our funeral home will be opened round the clock to attend to clients. We have a standard call center that is manned by trained health workers. Our employees are going to be well trained to operate within the framework of our organization’s corporate culture.

b. Products and Service
  • Providing funeral director services
  • Providing embalming services
  • Operating funeral homes combined with crematories
  • Providing mortician services
  • Providing visitation or viewing services
  • Providing funeral services
  • Providing graveside committal services
  • Direct cremation services
  • Selling funeral merchandise (e.g., caskets, flowers, and obituary notices)
  • Transporting the deceased.
c. Mission Statement

Our mission is to establish a world-class funeral home business that will be known for healthy, safe, and highly reliable funeral practices.

Vision Statement

Our vision is to become the number one choice when it comes to funeral home services in the whole of Florida.

d. Goals and Objectives

The goals and objectives of the funeral home business are to provide interment and funeral services for the dead; these services may include a prepared wake and funeral, and the provision of a chapel for the funeral.

e. Organizational Structure
  • Chief Funeral Director (President)
  • Funeral Director (Mortician)
  • Sales and Marketing Executive
  • Accountant
  • Client Service Executive (Help Desk Office)
  • Mortician Assistant
  • Ambulance Driver

Marketing Plan

a. SWOT Analysis
Strength:

The strength of the funeral home business is that we have well-experienced and certified professionals under our payroll and our chief executive owner is one of them. So also, we operate in a location where we can easily collaborate with other key stakeholders in the healthcare industry.

Weakness:

As a new funeral home business, it might take some time for our organization to break into the market and gain acceptance, especially from top profile clients in the fast-growing and highly competitive death care industry; that is perhaps our major weakness.

Opportunities:

The rising elderly population will drive demand for funeral home practice services, bolstering industry revenue.

Threat:

One of the major threats that we are likely going to face is an economic downturn and unfavorable government policies. Another threat that may likely confront us is the arrival of a new funeral home business in the same location where ours is located and where our target market exists.

b. How Do Funeral Home Businesses Make Money?

Funeral home businesses make money by;

  • Providing funeral director services
  • Providing embalming services
  • Operating funeral homes combined with crematories
  • Providing mortician services
  • Providing visitation or viewing services
  • Providing funeral services
  • Providing graveside committal services
  • Direct cremation services
  • Selling funeral merchandise (e.g., caskets, flowers, and obituary notices)
  • Transporting the deceased.
c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via check
  • Payment via mobile money transfer
d. Sales & Advertising Strategies
  • Introduce your funeral home business by sending introductory letters alongside your brochure to residents, hospitals, and key stakeholders
  • Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
  • Create a basic website for your business to give your business an online presence
  • Directly market your services.
  • Join local funeral home business associations for industry trends and tips
  • Advertise our business in community-based newspapers, local TV and radio stations
  • List your business on yellow pages ads (local directories)
  • Encourage the use of word-of-mouth marketing (referrals)

Financial Projection

a. How Much Should You Charge for your Product/Service?

The average funeral costs between $7,000 and $12,000. The viewing, burial, service fees, transport, casket, embalming, and other preps are included in this cost.

b. How Much Profit Do Funeral Home Business Owners Make a Year?

It depends, but the available report shows that the average earning is $89,868 a year and $43 an hour in the United States. The average salary range for a funeral home is between $63,631 and $111,263.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the funeral home business
  • The types of customized services and products offerings
  • The location the funeral home business is covering
  • The management style of the funeral home business
  • The business approach of the funeral home
  • The advertising and marketing strategies adopted by the funeral home
  • The number of years the funeral home is in business
d. What is the Profit Margin of a Funeral Home Business Product/Service?

The profit margin of a funeral home is not fixed. It will depend on some factors that are unique to your location and the type of services offered.

e. What is the Sales Forecast?

Below is the sales forecast for a funeral home business. It is based on the location of the business and other factors as it relates to such startups in the United States;

First Fiscal Year:
  • $200,000 (From Self – Pay Clients)
  • $350,000 (From Insurance Covers)
Second Fiscal Year
  • $250,000 (From Self – Pay Clients)
  • $400,000 (From Insurance Covers)
Third Year
  • $300,000 (From Self – Pay Clients)
  • $550,000 (From Insurance Cover)
  1. Set Up your Office

a. How Do You Choose a Perfect Location for Funeral Home Business?
  • The demography of the location especially as it relates to old people who are regulars when it comes to health issues
  • The demand for the services and products offered by funeral home businesses in the location
  • The purchasing power of businesses and the residents of the location
  • Accessibility of the location
  • The number of funeral home businesses in the location
  • The local laws and regulations in the community/state
  • Traffic, parking and security et al
b. What State and City is Best to Open a Funeral Home Business?
  • Birmingham, Alabama.
  • Nashville, Tennessee.
  • San Diego
  • Reston, Virginia.
  • Houston, Texas
  • West Palm Beach, Florida.
  • Fort Worth, Texas
  • Tarrytown, New York.
  • Los Angeles, California.
  • Green Bay, Wisconsin.
c. What Equipment is Needed to Operate a Funeral Home Business?

In starting a funeral home, you will be expected to have standard Casket Carts, Casket Lowering Devices and Accessories, Preparation Room, Embalming Chemicals, Cremation Supplies, Mausoleum, Urn Vaults, Vases, Burial Garments, Waste Containers, Lawn Boards, Straps and Slings and Chairs & Accessories.

  1. Hire Employees

When it comes to hiring employees for a standard funeral home business, you should make plans to hire a competent Chief Funeral Director (President), Funeral Director (Mortician), Sales and Marketing Executive, Accountant, Client Service Executive (Help Desk Office), Mortician Assistant and Ambulance Driver.

  1. Launch the Business Proper

A funeral home business is usually a very solemn business, so you may not be required to do an opening party to launch the business. What you need to concentrate more on at this point is giving enough publicity to the business.

a. What Makes a Funeral Home Business Successful?
  • Choose a good location and facility to launch the business
  • Hire only competent, hardworking, and trustworthy staff
  • Be deliberate with equipping and furnishing your facility
  • Encourage the use of word of mouth to promote your funeral home business
  • Leverage all available online and offline platforms to promote your funeral home business
b. What Happens During a Typical Day at a Funeral Home Business?
  • The funeral home is open for the day’s work
  • Walk-in customers are attended to depending on the type of services requested
  • Account reconciliation
  • Administrative work
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Funeral Home Business?
  • Excellent death care skills
  • Excellent customer service skills
  • Good managerial and human development skills
  • Visionary Leadership
  • Team-building & Interpersonal Skills.
  • Excellent communication and negotiation skills.
  • Organizational skills.
  • A strong understanding of human psychology and physiology
  • Attention to detail and the ability to concentrate for long periods
  • Good Supervisory skills
  • Work experience in a funeral home
  • Experience in managing people
  • Experience in business administration
  • Experience in handling dead bodies and bereaved families.