Do you want to start a funeral home? If YES, here is a complete guide to starting a funeral home business with NO money and no experience.
Okay, so we have provided you an in-depth sample funeral home business plan template. We also took it further by analyzing and drafting a sample funeral home marketing plan backed up by actionable guerrilla marketing ideas for funeral homes. In this article, we will be considering all the requirements for starting a funeral home. So put on your entrepreneurial hat and let’s proceed.
Why Start a Funeral Home Business?
Death we all know is the last stage of human existence. Reports have it that 150,000 people die every day. After death, we all will need funeral services. You can start a funeral home business and make a decent income. The importance of funeral homes can sometimes be understood, feared, or even overlooked—but that does not mean that it is not important.
But you need to understand that this business can be physically and mentally tasking. Death knows how to keep you busy. With all the work, there’s little room for downtime. That means less personal and family time. We believe that running a funeral home requires selflessness, because the job is demanding, and not just because of the hours.
The advent of technology and new ideas has led to a great deal of change in this business. There is the arrival of 3D printing which promises new levels of personalization. Funerals can stream live to the web. A lot of individuals are turning to digital memorials and social tributes.
The sensitization for green funerals is growing immensely and people want their final goodbyes to be as unique as the life they lived and the legacies they left behind. But even with these streams of change, there are those who still choose to adhere to tradition. You need to know that tradition and rituals are not bad but can be comforting.
Funeral traditions play an important part of the grieving process and help to combat anxiety, fear and pain. More than personalization, more than tradition, people want guidance. We all know that losing a loved one is a very hard process. This is why as a funeral director (funeral home owner), your job is not only to arrange the final services of the deceased, you have to serve as a steward of the living, leading them through the array of choices and decisions.
It’s also your job in this business to bring the innovative approach and the tasteful touch needed for every funeral. Owners of funeral homes today are in charge of establishing new rituals at a moment’s notice. If a family wants a traditional service, something like their grandparents had, it’s no problem. You excel at setting up a formal, comforting service. You should be a master of both modernity and tradition. You painstakingly set each little detail for a service, because each detail matters.
This business might seem difficult but it’s a business that will fill your pocket and is recession resistant.
Starting a Funeral Home Business – A Complete Guide
- Industry Overview
Generally, businesses in the Funeral Services Industry are often seen in an unpleasant light, but yet the services and products they offer are very important. The morbid nature of the business does not mean that individuals can’t profit from investments here. Businesses in this industry can loosely be classified under three categories: cemetery owners and operators, funeral homes, and manufacturers of burial and memorial products.
Have it in mind that industry revenue is determined by the death rate, price increases, product mix, and conditions in the broader economy. Consequently, investors looking for above-average revenue and earnings growth ought to look elsewhere. But what this industry lacks in growth prospects, it makes up for with stability.
Statistics has shown that the need for funeral services is inelastic, making the group recession resistant, though not recession proof. We were able to find out that businesses in this industry can be consistent, but there is a degree of seasonality in results, with revenues and earnings becoming highest during the winter months, when influenza and pneumonia cases peak.
Even though the Funeral Services Industry is stable, and its long-term prospects are buoyed by the aging baby-boom generation, it still faces a lot of challenges and threats. We believe that one of the biggest obstacles is the movement away from traditional burials toward cremation.
Experts believe that this trend has been going on for years at a slow, but steady, pace. Cremations produce lower revenues and profits than burials. Also have it in mind that the Funeral home aspect of this industry is the most diverse subsector of the industry.
This sector act as retailers for burial and memorial products, prepare bodies for cremation or burial, provide space for memorial services, and coordinate various other aspects of the cremation or burial process, depending on the wishes of the family or the deceased.
The revenues of this sector falls into two specific categories, pre-need and at-need. Pre-need revenues are established when funeral service plans are made in advance before death, while at-need business stems from family members making arrangements after a loved one has passed.
This sector just like the general industry is strictly dependent on the death rate, even though economic factors do come into play. We believe that when the economy is concrete, pre-need revenue is more plentiful, and consumers are willing to ask for high-end burial and memorial products, which usually carry richer margins than their basic counterparts.
But during fragile economic periods, revenues are more dependent on the death rate, and operating variables, such as mix and labour costs, have greater influence on margins. Don’t forget that this Industry is best suited to investors looking for stability and income. Death is one of life’s few certainties, so these businesses have a steady flow of business, despite a degree of seasonality.
But have it in mind that this is not a growth industry because businesses lack control over the death rate, leaving them with limited options to increase revenues and earnings beyond such methods as price increases, acquisitions, and operating margin expansion.
Starting a Funeral Home Business – Market Feasibility and Research
- Demographics and Psychographics
We don’t need a soothsayer to tell us the demographics or the specific people that need the services of a funeral home. Death has no age barrier; it gives no consideration to income or heights, it doesn’t ask questions of achievements or legacies, but chooses to come at its own convenient time. It doesn’t mean you should take the planning and starting of this business lightly.
You should consider conducting a market research study. Having a solid background in data can help you identify the value your funeral home business brings to your community. You should understand and make use of service gaps (things your community wants but doesn’t have available to them right now).
For instance, is your business located in an area with an aging population? Is your community home to many members of the “sandwich generation” (people who support both their own children and their aging parents?). You need to analyse these facts if you want to determine what funeral services your community needs from you.
List of Niche ideas in the Funeral Home Business
It’s a known fact that funeral home businesses 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. In the United States of America, a lot of modern day funeral homes are run as family businesses.
Reports have it that a large percentage of trained morticians and undertakers work in small, independent family-run funeral homes. The owners of these family-run funeral homes usually hire two or three other morticians/undertakers as either full–time employees or part–time employees.
The additional staff are employed to help offer the diverse services available in the industry. These services can become niches where you can focus on. These services may include;
- 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
- Selling funeral merchandise (e.g. caskets, flowers and obituary notices)
- Transporting the deceased
Level of Competition in the Funeral Home Business
Statistics has shown that the need and demand for Funeral Homes is relatively steady because a lot of Americans pass through a funeral home upon their death, which is unavoidable. But with the past five years to 2017, changing funeral trends have led more families away from burial and toward lower-cost cremation services, affecting the industry revenue generated per client.
Also the growth of alternative sales channels for funeral products retailed by this industry has heightened competition. Within the next five years to 2022, experts believe that industry’s growth will continue slowing. Cremation’s growing popularity will remain the primary threat to industry growth.
But then a shaky expected uptick in the US death rate will bode well for the industry. Even though demand for funeral services is steady, competition from e-commerce and cremation services pose a threat to this business.
Note that the places with the greatest concentration of funeral homes include the Southeast, the Great Lakes and the Mid-Atlantic. We believe that the distribution of industry businesses closely follows the share of the region’s population and age structure.
Also consumer preferences for cremation against burials are an important factor that can influence a region’s share of businesses. Also have it in mind that the Southeast has the greatest share of industry businesses, estimated at 26.9% of the total. Florida, with its warm weather and low-priced housing, has long been an attractive destination for retirement-age adults. Thus, 18.2% of the population is over 65, compared with the national average of 13.7%.
List of Well Known Funeral Homes
- Borders crematorium
- Highgate cemetery
- Horan & McConaty Funeral Home
- Pere-Lachaise Cemetery
- Lone fir cemetery
- Hodges funeral home
- Frank E. Campbell
- Punta Arenas Cemetery
- Forest Lawn Memorial Park
- Community life centre
Literally, a funeral home owner is known as a funeral home director. A funeral home owner supervises the upkeep of his facility and instructs staff in areas of embalming, hearse transportation and funeral preparation. But then a funeral home owner’s salary is dependent upon his geographic location, education and type of industry. Your salary would depend on the geographic location of your business.
Reports have it that a funeral home owner/director in Kentucky earns an average annual salary of $43,350. A funeral home owner/director in Massachusetts earns an average annual salary of $82,780. You should also know that educational achievements and academic accomplishments affect a funeral home owner’s annual salary.
Have it in mind that a funeral home owner who has an educational degree typically earns a higher average salary than a director who does not have a degree. A lot of funeral home owners/directors have a degree in mortuary science from an accredited university.
Both associate’s and bachelor’s degrees are available in mortuary science. From our detailed research, the median yearly salary for a mortician is $53,057. Morticians in the middle range of wage earners make between $36,452 and $68,000 on an annual basis, while top-earning funeral home owners/morticians earn over $94, 000 a year.
Also note that a funeral home director’s specific job industry affects his average annual salary level. Reports have it that funeral directors who are employed by the federal government earn an average annual salary of $70,190. Funeral home owners/directors who work for private death care services earn an average annual wage of $60,230. We believe that a funeral home director is either a government employee or a self-employed owner of a small business.
Starting a Funeral Home from Scratch or Buying a Franchise
A lot of people won’t believe it but there are franchise opportunities in this business. But you have to understand that starting from the scratch or buying a franchise doesn’t determine success, but can help you mould a clean path. Indeed this business is a competitive business where big fishes are swimming deeper and the little ones are struggling to grow bigger.
Innovation, commitment and brand popularity are important incentives that can guarantee success in this industry and only buying into a franchise can provide that easily. Not everyone is suited to a franchise relationship and not everyone is suited for owning and operating a franchise.
You must be ready, able and most of all willing to do things differently in this industry and the last thing needed in any community is yet another “traditional” funeral home. What people needs is a convenient and affordable choice when it comes to selecting their funeral provider.
And that takes someone who is progressive enough to take off their traditional undertaker’s hat in the new millennium and deliver consumer service that is not only professional but convenient and affordable.
Possible Threats and Challenges of Starting a Funeral Home Business
Indeed the Funeral Home industry has seen and will continue enjoying growth trends, largely because of the growing innovative needs of the industry, and the advent of technology. Possible threats to this business may include;
- Market research and feasibility
- Penetrating the market
- Employing experienced workers
- Gaining patience in your duties etc.
Starting a Funeral Home Business – Legal Aspect
- Best Legal Entity for a Funeral Home Business
You need to understand that deciding the best legal entity for your business is one important step that will set your business apart from any peers as it will clearly explain the foundation of your business. You need to protect your business which is why you will have to decide early if you are going to run your Funeral Home service as a sole proprietorship or as an LLC. Don’t forget that every legal entity has advantages and disadvantages.
Choosing to start your Funeral Home business as a Corporation, limited liability company and limited liability partnership can indeed give you and any investors or partners personal liability protection. You can start forming these business entities via your state’s secretary of state’s office.
We advise that you consult an attorney or accountant to figure out what makes the most sense for you. But in all, the LLC is the best entity for a large scale Funeral Home Business. The benefit of the LLC simply includes;
- Easy to setup
- Cheap to start
Catchy Business Name ideas for a Funeral Home Business
The identity you establish with your business name is very important. Your business name will decide how customers will identify you. With this in mind, your business name should be easy to remember, say something about the kind of business it is and sound professional and caring.
- Peace Route
- Easy Funerals
- Easy call
- Vintage ride
- Life Base
- Neat express
- Family companion
- Safe hands
Have it in mind that your funeral home will be providing essential services to those experiencing loss and grief. In their time of need, your clients trust you to conduct business in a sensitive, yet professional manner. This is why you need to protect your funeral home while continuing to offer reliable care with quality business insurance. Here are some of the insurances you should consider…
- Physical damage protection
- Liability insurance
- Liability Risks.
- General Liability insurance
- Embalming Fluids
- Limited Pollution Liability
- Commercial auto insurance
- Comprehensive coverage
Intellectual Property Protection
In any business industry, with intense competition comes innovations and ideas. These ideas and innovation has now made it a necessity to protect all valuables in your business. Intellectual property protection in the Funeral Home industry is about protecting the time, money and effort you put into your business.
You need to understand that this protection will help you get hold and protect what’s yours, mould your handwork and ingenuity into lucrative returns, set you up for growth or business expansion, keep competitors away, make sure you’re not fringing in anyone’s right, prevent employees from aiding and helping your competitors, attract investors and also promote your business to investors or potential buyers.
Most individuals will argue how intellectual property protection can be necessary in the Funeral Home, yet they forget that it is deadly to let your competitors take from you without due permission. Intellectual properties in the Funeral Home industry may include;
- Registered and Unregistered trademarks – Your brands name of logo.
- Patents – typically a new way, process or material invented as a business innovation
- Secrecy agreements – contracts that keep valuable information safe and client confidentiality
Is Professional Certification Needed to Run a Funeral Home Business?
To run a funeral home, at least a member of the staff must have a certificate or degree in mortuary science. The local health department and OSHA personal needs to clear the funeral home for safety and to certify it is up to code. Funeral homes are needed to have two copies of their OSHA handbook, and each chemical stored at the funeral home must be logged with the appropriate information.
One handbook is to always be kept outside the funeral home in the event the funeral home is destroyed by some disaster, while the second copy must be in the preparation room at all times. After filing with the state and federal governments as a business and with the appropriate paperwork, you can officially open a funeral home.
List of Documents Needed to Run a Funeral Home Business
Even the Funeral Home industry has due processes, proper documents and permits needed in other to run its day to day activities. You need to understand and follow all laws to avoid penalties if you plan to succeed in this business. Documents needed for a funeral home business differs from state to state. Here are few well known legal documents needed to avoid penalties and fines.
- Vehicle permits
- Vehicle for service permit
- Business permit
- Commercial driver’s license
Financing a Funeral Home Business
Finance in the Funeral Home business is very necessary especially if you are looking to start a large scale Funeral Home Business. The difference between a small and a large scale business is marketing abilities, facilities, work force and target markets. Nowadays getting funds for a business is not an easy task because no one would want to pledge his/her money in a business that can’t guarantee returns and profits. Examples of ways to get funding may include;
- Funds from Personal savings
- Getting loans from families and friends
- Taking small business loans
- Getting microloans
- Attract an angel investor
Choosing a Suitable Location for your Funeral Home Business
When planning to start this business, you will have to choose a suitable location for your business. For you to do this comfortably, you have to make a careful assessment of costs. The ideal location should be one where costs are minimized. You should be able to look at the advantages which each area has to offer as well as any government help which might be available.
In this business, your choice of location should have easy access to all major routes in your area and enough parking spaces for your vehicles if you’ll be transporting the corpse and for your clients. Your Funeral Home business should be easy to locate, convenient for you, your staff and customers. Centrally located sites are best if you will be serving your entire city. Funeral homes are also needed by the federal government to have certain amenities throughout.
First, the preparation room or embalming room must be in a basement area, secluded from the remaining portion of the funeral home. The room needs to have proper ventilation with at least two vents on an outside wall as well as drains in the floor with plumbing separate from the main pipes.
All funeral homes must be handicap-accessible as well. A casket and burial vault display room needs to be on the main level of the funeral home, most commonly attached to a room used to meet with arranging families. Any form of a kitchen or dining area is strictly prohibited on the main and lower floors of a funeral home where a deceased body may exist.
Each funeral home must also have a windowless concrete room with a flame-resistant door and flame-resistant files. This is so that if a funeral home were to ever burn down, all the records and files would be preserved. Records and files must be kept for a minimum of seven years within a funeral home.
Starting a Funeral Home Business – Technical and Manpower Requirements
Just like any other business, you will surely need some equipment to succeed in this business. You will need to buy an embalming machine, which costs about $4,000, and a stainless-steel preparation table, which is about $5,000. You will be expected to have a 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.
Also when employing for your funeral home, we suggest you look for people who can handle grieving and bereaved people not just people looking for a job in other to be able to pay their bills.
Also note that Funeral directors play the role of counsellor, cosmetician and salesperson in a funeral home. Funeral homes need to file a general price list or GPL with the state government each year. Have it in mind that this is to make sure that prices are fair and within the boundaries of current inflation.
Caskets, urns and miniature burial vaults are needed for a display room within the funeral home. Adequate protection such as eye goggles, disposable aprons and shoe covers are also needed. Chemicals used to treat conditions such as jaundice, gangrene and skin slip should also be available.
You will need to have a hearse and funeral “lead car” available for funeral processions. Since the vehicles will be used for business, leasing may be more attractive than buying them. We believe that this will allow them to be traded in often for newer models, which will give your business an updated, professional feel. Leasing a hearse and lead car can cost up to $1,500 a month. Of course, this cost can be reduced if you happen to already own a vehicle that is suitable to use as a lead car.
The Service Process Involved in a Funeral Home Business
Immediately a funeral home has been contacted and a body brought to their facility, one of two things generally takes place. For instance, if the family has requested cremation with no viewing or embalming, the body is then placed in a refrigerated holding area until the proper permits have been issued and the cremation can take place.
If the family has authorized embalming to allow for visitation or viewing, then the body is embalmed. Embalming involves replacing the majority of the blood in the body with embalming chemicals (usually formaldehyde or gluteraldehyde based). These chemicals bind with the proteins in the body to retard decomposition. It is this binding process that makes the person’s skin feel stiff or rigid when you touch someone in a casket.
During preparation for embalming, the body is placed on a special table (similar to an operating table) and thoroughly bathed. After that, the hands are positioned and the eyes and mouth closed (if indeed they were open). Then the embalmer assembles and mixes the fluids that will be used.
Reports has shown that this mix will be determined by whether or not the person has dry skin, if they are retaining fluids, if they have a liver condition that has caused jaundice and a variety of other factors. Dye is also added to this fluid, since much of the natural colour in our skin and lips come from the colour of the blood circulating close to the surface.
After it has be mixed, the fluid is then injected with an electric pump into a major artery in the body (often the carotid) and as it pushes the blood forward, it is released from the accompanying vein (in the care of the carotid artery, the jugular vein).
But if the individual has poor circulation, many points of injection may be needed. After the arterial embalming has been completed, the point of injection is closed and the body bathed again. After the embalming is completed, the person is dressed, the hair is fixed and any necessary makeup is done before the person is placed in the casket for funeral arrangements.
Starting a Funeral Home Business – The Marketing Plan
- Marketing Strategies for a Funeral Home
A lot of people may think that marketing a funeral home is a waste of time because people will stop by when they have a need for your services. Indeed it might be true in small communities where your business is someone’s only option, but what about large communities that have multiple service providers? You need to have the quality of your compassion, service, and even pricing structure stand out from the competition. Ways to market a Funeral home may include;
- Tell Your Story
- Provide Value
- Have a Concise FAQ
- Engage Your Audience
- Relate to the News
- Be Personal
- Top Lists Drive Traffic
- Get Yourself On Quora
Winning Competitors in the Funeral Home Industry
Focused and successful entrepreneurs have always been people who saw competition as a need to improve and create a stand. Competition is what brings about ideas and creativity. Without competition, all business industries would be boring and will lack new ideas and orientation, and no one will strive to satisfy the general public.
A business doesn’t necessarily have to be revolutionary in order to succeed. Rather than struggling to come up with a brand new idea, take a look at the industry and see where there’s a void to be filled. Note that your services may be similar in many aspects to that of the competition except for a few defining factors.
- Use Infographics
- Host Other Events
- Make Extra Use of Your Outdoor Space
- Create an Award
- Be Where the People Are
- Have Branded Giveaways
- Speak At Community Events
- Write a Newspaper Column
Strategies to Boost Brand Awareness and Creating a Cooperate Identity for your Funeral Home Business
It’s your duty as a funeral home owner to find ways to get your message to people who need pre-planning funeral services. This is the key to implementing a results-oriented marketing strategy for your funeral home. Have it in mind that you need to market to those who have an urgent need to make funeral arrangements.
To cover your bases, use a marketing strategy that attracts people who still look for funeral solutions in traditional ways as well as those who rely on the internet for answers. Ways to boost your brand awareness may include;
- Digital marketing
- Traditional marketing
- Analyse your competitors
- Survey customers