Do you want to start a crematorium and want to know the cost? If YES, here is a complete guide to starting a crematorium business with no money or experience.
Cremation business is rapidly gaining prominence especially in developed countries. Some people would rather prefer that their dead be cremated as against burying them. Cremation is convenient and generally accepted by people if they are given the option.
The fact that people cherish having the ashes of their dead in an attractive container (vase, urn, pot, et al) and placed in a place of their choice makes crematorium business a very lucrative one. If you are already running cemetery services, you can choose to add cremation as part of your service offering.
As a matter of fact, you will have a comparative advantage in the marketplace. So, if you are serious about starting your own crematorium service, all you need do is to read this article and you will be well equipped.
Steps to Starting a Crematorium Business
1. Understand the Industry
Crematorium services business falls under the cremation services industry and the business focuses on cremating dead humans and, in some cases, dead pets.
They may also be involved in burial services, the sale of caskets and other related funeral merchandise, and transporting human remains from the hospitals, mortuary or place of death to the venue where the dead body is to be cremated.
According to the National Funeral Directors Association, in 2016, cremation accounted for a majority of post-death dispositions for the first time. The declining significance of religious traditions and increased transience of the US population, which diminishes the importance of permanent burial plots, have fueled a trend of rising cremations over the five years to 2018.
In addition, changing attitudes toward pets have made funeral and cremation services for cats and dogs a growing market.
As a result, more funeral homes have entered the industry by expanding their service offerings. If you are a close watcher of the Cremation Services industry, you will rightly observe that the industry successfully dug itself out of the recessionary woes that once plagued companies during the recession period in the united states.
With increasing disposable income and a growing proportion of US citizens reaching 65 years and older, families have become far more likely to purchase high-value industry merchandise and burial services, thereby increasing the revenue generated in the industry.
These factors are expected to continue going forward. Nevertheless, experts projected the number of cremations is going to rise.
The Cremation Services industry is indeed a very large industry and pretty much thriving in developed countries. Statistics has it that in the United States of America alone, there are about 11,728 licensed cremation companies and they are responsible for employing about 13,590 employees.
The industry rakes in a whooping sum of $2 billion annually with an annual growth rate projected at 4.7 percent within 2013 and 2018. The establishment with the lion share of the available market in the industry is Service Corporation International.
A recent report published by IBISWORLD reveals that the regions with the greatest concentration of cemeteries and crematories in the United States are the Mid-Atlantic, the Southeast and the Great Lakes. The distribution of cemeteries and crematories is related to population trends and age structure.
Additionally, consumer preferences for cremation, opposed to burials, are another important factor that can influence the share of establishments. The report further stated that the Mid-Atlantic has the greatest share of cemeteries in the United States in 2016, estimated at 26.5 percent.
Pennsylvania is the most heavily concentrated state in the country in terms of industry establishments, holding an estimated 10.9 percent of cemeteries and crematories in 2016. New York follows as a close second with 9.6 percent.
It is obvious that the number of humans and pets dying in the United States is anticipated to increase and this will in turn create market for the crematory services industry. Nonetheless, continued competition from discount retailers and the ease of online ordering from casket manufacturers, as well as a rise in low-priced cremations, are expected to curtail prices for crematorium services.
If you are contemplating starting your own cremation business in the United States, you should ensure that you carry out a thorough market survey and feasibility studies. If you get some key factors wrong before starting your own crematorium services business, then you are likely going to struggle to stay afloat.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who require crematorium services cut across families and pet owners, and corporate organizations such as zoos, vet clinics, etc.
3. Decide Which Niche to Concentrate On
If you choose to start your crematorium business in the United States of America, you have the option to choose to specialize on;
- Human cremation services
- Pet cremation services
- Human and pet cremation services
The Level of Competition in the Industry
The level competition in the cremation services industry can be said to be fair. At the same time, we are not ruling out the fact that the competition that exists in the crematorium line of business goes beyond competitions amongst crematorium services companies within your location of operation.
You are expected to compete with funeral homes and cemetery operators that also engage in cremation service. The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your services or business properly, you will always make headway in the industry.
Just ensure that you position your business properly, adopt safe and swift cremation service process and you know how to attract and reach out to your target market.
4. Know Your Major Competitors in the Industry
These are some of the leading cremation companies in the United States of America;
- Paws to Heaven Pet Crematory
- Southeastern Cremation
- Rainbow Bridge Crematorium
- Family’s Pet Cremation
- Pet Angels Pet Cremation
- Heavenly Acres Pet Cemetery
- Animal Rites, USA
- Agape Pet Services of Virginia, LLC
- Colonial Pet Cremations Services
- Pet Crematory Agency, Inc.
- Peebles Pet Services
- Hartsdale Pet Cemetery & Hartsdale Pet Crematory
- Pawn Prints Pet Crematory
- Faithful Companion Crematorium services by Marrocco
- Ever After Pets
- Florida Pet Cremation, Inc.
- Regency Forest Pet Memorial
- Jacksonville Pet Funeral Home & Pet Crematory
- Cremation Urns by Legacy USA
Getting your economic analysis right and adopting international best practices in the industry you choose to build a business in is some of the critical steps you have to take before starting your business.
If you are mapping out your economic analysis to start your crematorium services business, you should carry out thorough market survey and costing of the amount needed to purchase cremation machine (cremation furnaces come in a variety of sizes, some of which are more than 15 feet long, 5 feet wide and 7 feet tall.).
Batch load incinerators, vase (urns) in various shapes and designs and all safety gadgets needed, the cost of renting a facility and also the cost to successfully run the business. Please note that your ideal facility must also have a refrigerated area to store bodies until cremation.
How Much Does It Cost to Start a Crematorium?
If you decide to open a crematorium in any part of the United States, you would need an initial investment for a building and equipment, and also for your utility and running cost. Averagely, you are expected to budget between $80,000 and $250,000 to start, depending on the location and cremation services offered.
If you are considering starting a crematorium services business, then your concern should not be limited to the cost of purchasing cremation machine, batch load incinerators, vase (urns) in various shapes and designs and all safety gadgets needed, and the cost of renting a facility, but also on branding.
5. Decide Whether to Buy a Franchise or Start from Scratch
If you are looking towards starting a crematorium services company, you need to start from the very scratch because you can hardly get a franchise of a cremation company to buy. Besides starting a crematorium services company from the scratch is less stressful when compared to other related businesses.
With crematorium services company, you should just try as much as possible to secure cremation machine, batch load incinerators, vase (urns) in various shapes and design and all safety gadgets needed, build business relationship with organizations and then leverage on every marketing tool within your disposal especially the internet when it comes to marketing your services.
Please note that most of the successful crematorium services companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own crematorium today, one of the major challenges you are likely going to face is the presence of well – established crematorium services in your business location and also funeral homes and cemetery operators that also offer cremation services.
Some other challenges and threats that you are likely going to face is unfavorable government policies, religious views and price regulations. There is nothing you can do as regards this threats and challenges other than to stay positive that things will work well for you.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
The United States has a wide array of options that you can choose from if you are looking for a business structure to build your business on. The most important thing is that you should select a business structure that will best serve your overall business vision and mission.
In the United States of America, you can choose to start your business as a Sole trader, Limited company, Private limited company (LTD or Ltd), Public limited company (PLC), Limited liability partnership (LLP) or ‘C’ corporation or a ‘S’ corporation.
If you want to start a crematorium services business and you are not sure of which of the business structure to choose from, then consider going through the quick below before making your choice;
A sole trader is a business-type where one person owns and runs the entire business. It is the simplest business structure you could adopt. It is very suitable for any one-person business. A sole trader is an individual is entitled to all/any profits of the business but is also liable for any debt/damages incurred.
A limited company is a legal business structure that means a business is a separate entity from its owners. This means the owners are only liable for any business debts to the extent of the amount of money they have put into the business, thus limiting any exposure for business owners beyond their total investment. There are two types of limited companies you can incorporate in the United States.
Private Limited Company (LTD or Ltd)
In a private limited company, the owners privately hold shares. This is the most common and preferred incorporation structure for most small businesses in the United States of America.
Public Limited Company (PLC)
In a public limited company, shares are available to the public for ownership and purchase. PLC is commonly used as a structure for major companies after they make an initial public offering (selling a large portion of their shares in the capital markets).
Limited Liability Partnership (LLP)
An LLP is a partnership structure used by many businesses including vets, dentists, law or accountancy firms. An LLP is made up of at least one limited partner and one general partner (there can also be more than one of each), and these partners have different responsibilities and exposure regarding the business.
If you are considering operating a mom and pop kind of business or to operate as a one-man business, then a Sole Tradership would probably be the best structure to build your business on. But if you have plans to build a business brand that has a significant amount of senior management, capital and that deals in services, then a Limited Liability partnership would be the best choice.
8. Choose a Catchy Business Name
One of the most important steps that you should take on your quest to starting a business in the United States of America is to register the business name with the regulating authority.
When you come up with a name, it is always advisable to run a search to ensure that the name you choose is not an already trademarked name by another company. If you are considering starting your own crematorium, here are some catchy names that you can choose from;
- After – World® Crematorium Services, Inc.
- Benson Capstone® Crematorium Services, LLC
- Vapor Life® Crematorium Services, Inc.
- Douglas Murray & Sons™ Crematorium Services Company
- Donald Kendrick® Crematorium Services, Inc.
- Excellent Care® Crematorium Services, Inc.
- Thor Classic® Crematorium Services, Inc.
- Heaven Gates® Crematorium Services, LLC
- Ally White® Crematorium Services, Inc.
- Trans World® Crematorium Services, Inc.
9. Discuss with an Agent to Know the Best Insurance Policies for You
It will be a grave mistake not to buy the insurance policy cover for your business. As a matter of fact, in the United States of America, you cannot legally run a business without buying the needed insurance policy cover. With the right insurance policy cover, you can be rest assured that your business will be protected when the unforeseen happens.
The truth is that, if you don’t have the right insurance policy in place and when things go wrong, it can threaten the existence of your business. In the United States of America, there are quite a number of insurance policy covers that a crematorium business owner should consider buying and some of them are;
Public Liability Insurance (PLI)
PLI protects businesses against losses suffered by people due to the activity of the business, it is one of the most common types of small business insurance. It is of particular importance if you operate physical premises and regularly interact with customers in a third party or business owned premise.
Professional Indemnity Insurance (PII)
PII is for businesses and professionals that provide advice or services to customers. It protects your business against any claims for damages or legal costs which arise due to act omission or breach of professional duty in the daily course of operations. It actively protects your business if advice or a service provided negatively affects a customer.
Employers Liability Insurance (ELI)
ELI protects a business that employs staff from financial losses incurred when a staff member experiences a job-related illness or injury. Workplace injuries can be extremely costly for an employer if they are liable. ELI offers protections against this and it’s particularly relevant for businesses that have many staff involved in physical work on their behalf.
Product liability insurance (PLI)
Product Liability insurance (PLI) policy protects your business from damage to property or personal injury caused by products your business/company has supplied or sold.
Key Man Insurance (KMI)
Key man insurance policy cover protects businesses from the loss of a key employee such as a CEO by paying out a large sum on the event of their death or incapacitation.
It is effectively life insurance against anything critical happening to a key employee. If your business is entirely reliant on one employee or a small group, this insurance can often help save the business from bankruptcy in a disaster situation.
Landlord Insurance (LI)
Landlord Insurance policy cover (LI) protects business owners who own property from losses sustained as the result of renting that property. If a business owns its office and rents it out to other companies, this type of insurance will protect you from damages caused by a tenant.
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own crematorium, you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO.
11. Get the Necessary Professional Certification
When it comes to operating a crematorium, you do not need to have any special certification. All you need is formal training that will expose you to the in and out of operating crematory machines and effectively running the business. On the other hand, if you come across any form of certification that can aid you to conduct your crematorium business, then by all mean try and pursue such certification.
12. Get the Necessary Legal Documents You Need to Operate
It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hand of the law catches up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own crematorium in the United States of America;
- Certificate of Incorporation
- Business License/Dead Body Handler’s License
- Tax Payer’s ID / Tax Identification Number
- Business Plan
- Non – disclosure Agreement
- Copy of license for the cremation facility and/or a recent inspection report
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
13. Raise the Needed Startup Capital
Starting a crematorium can be cost effective especially if you choose to start on a small scale and operating within a community or city.
Acquiring cremation machine, batch load incinerators, vase (urns) in various shapes and designs are part of what will consume a large chunk of your startup capital. So, if you choose to start the business on a large scale with more than one operation facility, then you need to source for fund to finance the business because it is expensive to start a large – scale crematorium.
When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your crematorium;
- 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 Loan from your Bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends.
14. Choose a Suitable Location for your Business
When it comes to choosing a location for your crematorium, the rule of thumb is that you should be guided by the demand for such services. Of course, if you are able to start your crematorium services company in the right location for such business, you won’t struggle to make headway.
It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget. If you are new to the dynamics of choosing a location for your business, then you should feel free to talk to a business consultant or a realtor.
Before choosing a location for your company, ensure that you first conduct a thorough feasibility studies and market survey.
The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out. These are some of the key factors that you should consider before choosing a location for your crematorium;
- The demography of the location as it relates to old people and people that own pets
- The demand for crematorium services in the location
- Accessibility and road network of the location
- The number of crematorium, funeral homes and cemetery operators who are also into the cremation of dead bodies and pets in the location
- The local laws and regulations in the community/state
- Traffic, parking and security
15. Hire Employees for your Technical and Manpower Needs
The equipment needed to run this type of business are cremation machine (cremation furnaces come in a variety of sizes, some of which are more than 15 feet long, 5 feet wide and 7 feet tall.), batch load incinerators, vase (urns) in various shapes and designs.
Please note that your ideal facility must also have a refrigerated area to store bodies until cremation and other relevant software applications. You will also need computers/laptops, internet facility, telephone and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
As regard leasing or outright purchase of a cremation facility, the choice is dependent on your financial standing, but the truth is that to be on the safe side, it is advisable to start off with a short term rent / lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property.
When it comes to hiring employees for a standard crematorium, you should make plans to hire a competent Manager (you can occupy this role), Sales and Marketing Officer, Crematory Operators, Accounting Clerk, Ambulance Drivers and Cleaners.
On the average, you will need a minimum of 2 to 10 key staff members to run a medium – scale but standard crematorium.
The Services Delivery Process of the Business
When it comes to the cremation of human remains and dead pets, there are no hard and fast rules about it. Basically, it is the duty of the marketing and sales team to help the organization source for clients.
Depending on how organized your crematorium is, when a customer brings in their dead human or pet for cremation, the amount charged is agreed on, the human remains and dead pet is placed inside a crematory and then batch load incinerators.
When the cremation is finished, all that is left is are small amounts of bone. These are taken from the cremator, cooled and placed in a machine. After some minutes, usually less than an hour, the human remains or dead pet is transformed into powder form and then places inside a vase (urn).
It is important to state that a crematorium may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility.
16. Write a Marketing Plan Packed with ideas & Strategies
Usually, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a crematorium business, then you must employ strategies that will help you attract customers or else you will likely struggle with the business.
Your marketing strategy should center on safe cremation processes, pricing, and above all excellent customer service. You should ensure that whenever your customers bring their human remains or dead pets for cremation, they will get excellent service.
The truth is that, if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers. These are some of the marketing ideas and strategies that you can adopt for your crematorium services company;
- Introduce your crematorium by sending introductory letters alongside your brochure to mortuaries, hospitals, households, families who own pets, and corporate organizations such as zoos, vet clinics, security outfits and the police who own pets within and outside the city you are operating in
- Advertise on the internet on blogs, forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
- Create a basic website for your business so as to give your business an online presence
- Directly market your services.
- Join local crematorium services company associations for industry trends and tips
- Provide discount days for your customers
- 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)
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you offer your crematorium services at a price that is highly attractive is to ensure that you cut operational cost (especially fueling, services and maintenance costs) to the barest minimum, and channel your efforts towards marketing and promoting your brand name.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives.
18. Develop Iron-clad Competitive Strategies to Help You Win
The crematorium services line of business might not be so competitive but that does not mean you should not come up with creative strategies to be able to outsmart your competitors in the industry. Your ability to cremate human remains and dead pets in and hygienic and safe environment, your business process and of course your pricing model et al are part of what you need to stay competitive in the industry.
Another strategy that you can adopt is to ensure that your organization is well positioned and you have business relationship with mortuaries, pet owners and vet clinics et al.
19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes to boost their brand awareness.
If your intention of starting a crematorium is to grow the business beyond the city where you are going to be operating from to become a national brand, then you must be ready to spend money on promotion and advertisement of your brand.
Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your crematorium company;
- Place adverts on both print (newspapers and health and pet related magazines) and electronic media platforms
- Sponsor relevant community – based events / programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, LinkedIn, Google + et al to promote your services
- Install your Billboards in strategic locations all around your city or state
- Distribute your fliers and handbills in target areas
- List your crematorium in local directories/yellow pages
- Advertise your crematorium services company in your official website and employ strategies that will help you pull traffic to the site.
- Position your Flexi Banners at strategic positions in the location where your crematorium is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles and wagons are well branded with your company logo.