How to Start a Funeral Home

Written by Dave Lavinsky

how to start funeral business


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Starting a funeral home business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching and running a successful Funeral Home.

Importantly, a critical step in starting a funeral home is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.

11 Steps to Start Your Own Funeral Home

There are 11 steps to starting a funeral home as follows.

Step 1: Do Your Research

The most important part of starting a funeral home is doing your research. 

If you’ve never run a funeral home before, start by reading industry magazines and websites to learn more about the industry. The more you know about the industry, the better you can design your business and the more prepared you will be to launch and grow your funeral home.

Step 2: Develop a Funeral Home Business Plan

A business plan is one of the most important steps in starting any business. Developing the funeral home business plan forces you to think through your business concept and other aspects to help you make your business a success including the following sections:

  • Company Analysis – you will document the type of funeral home you plan to launch. 
  • Marketing Plan – you will document your pricing and how you will attract new customers. 
  • Management Team – you will detail your company’s staffing needs. 
  • Financial Plan – you will identify key expenditures you need, staffing and other costs, and projected revenues. This will help in forecasting the future of your funeral home and in determining if you need to raise outside funding.

Step 3: Determine Your Location & Space Requirements

Before you start a funeral home, it is important to have a location in mind if  you are not purchasing an existing funeral home.

Your location doesn’t need to be one in which there is a lot of foot traffic (such locations are very expensive), but it can’t be inconvenient to get to either. Think about the services you’d like to offer in your funeral home when thinking about the size of the space you need.

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Step 4: Equipment Needed

To start a funeral home, there are many supplies and equipment that you will need. Below are the main supply and equipment categories to consider:

  • Prep Room Equipment & Supplies
  • Chapel, Selection Room Equipment & Furnishings
  • Funeral Service Items
  • Auto Flags
  • Flower Equipment & Supplies
  • Emergency Pouches & Body Bags
  • Caskets
  • Removal Equipment & Transport Supplies

Step 5: Licensing Requirements

In most states, you cannot start a funeral home without having the right licenses and permits in place. Be sure to check your state’s rules regarding starting a funeral home.

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Step 6: Business Insurance

Once all the above steps are completed, it is time for you to get insured. There are many insurance companies that offer different policies that can suit your needs including workers’ compensation and general liability. 

Step 7: Market Your Business

Once you get all the necessary approvals and licenses, it is time for you to market your funeral business. There are many marketing strategies you can employ such as referrals, partnerships, social media marketing, pay-per-click advertising and public relations among others. 

Step 8: Hire Employees

Depending on how busy your funeral home is, you probably need to hire additional staff including a licensed Funeral Director who will lead the final funeral arrangements. 

Here are some things to consider when hiring employees for your funeral home:

  • look for people who are honest and have a good reputation in their work
  • check how organized they are to make sure they won’t miss anything important
  • make it clear whether you require permanent employees or on-call staff
  • check the person’s work history and past employment references before hiring them

Treat your employees fairly and ensure that your business is a safe place to work and that there are no safety hazards.

Step 9: Set up a Business Bank Account

You must set up a bank account for your business and set up credit card processing so you can accept credit cards as a form of payment (along with cash and checks).

Step 10: Record-Keeping Requirements

With any kind of business, keeping proper records is very important because it will help with tax filing, budgeting, and other things. A funeral home is no different.

Step 11: Review & Adapt Your Business Plans

Once your funeral home is up and running, it is time to review operations and make changes where necessary. For instance, if the demand for funerals was higher than expected, consider hiring additional staff to meet client needs. You might also need to change or increase your equipment if the need arises.


How Big is the Funeral Homes Industry?

According to IBIS World, the funeral homes industry in the US reached $16 billion in annual revenue and is anticipated to continue growing at a rate of 0.6%.

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What are the Types of Funeral Homes?

There are various types of funeral homes, but the most common ones include:

Traditional Funeral Home

This type of funeral home offers all types of services including funerals and wakes; traditional funerals, burial services, memorial services, cremation, and more.

Cremation Funeral Home

This is the type of business that focuses mainly on cremation services which are typically less expensive than traditional funeral homes. Cremations have become very popular lately since they are cheaper while still providing similar benefits to traditional funerals. It is important to note, however, that cremation services are usually provided by other types of funeral homes.

Religious Funeral Providers

This is a business that provides funeral services to people of the same religion. For example, it could be an Islamic funeral home or a Catholic funeral home. This type of funeral home only provides the services required by their religion.


Who are the Key Competitors in the Funeral Industry?

While there are many funeral homes in the US, only a few of them are considered the biggest competitors. These competitors include:

Service Corporation International (SCI)

One of the oldest and largest providers of funeral, cremation, and cemetery services in North America, Service Corporation International (SCI) was founded in 1962 and is based in Houston. SCI has 16,503 employees and last reported $3.5 billion in total revenue.

Carriage Services Inc.

Carriage Services Inc. is a Houston-based firm that was formed in 1991. The business went public in 1996, and current operates 178 funeral homes in 26 states as well as 32 cemeteries in 12 states.

StoneMor Partners LP

StoneMor is based in Pennsylvania and is the nation’s second-largest cemetery owner, with operations in 27 states and Puerto Rico.

There may be other locally-owned funeral homes in your target market. It is important to conduct research on how big they are and how people view them before you start your own funeral home.

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What are the Typical Startup Costs for a New Funeral Home?

The typical startup costs for a funeral home will depend on how much money the owner has to spend. It can probably land somewhere between $150,000 and $300,000.

If funeral homes want a luxurious set-up that includes all of the latest technologies, then they will have to spend more money in order to acquire these resources.

The common startup business expenses for a funeral home include:

  • Equipment & Furnishings – This category includes all of the necessary equipment that funeral homes use during embalming, like disinfectants and chemicals. They will also need to pay for furniture like caskets, chairs, sofas, etc., as well as office supplies and items for everyday life.
  • Marketing & Advertising – Funeral homes will have to spread the word about their business, so they will need to pay for marketing strategies. They should also invest in a website and other online platforms that can help them reach a wider customer base.
  • Insurance – There are going to be insurance premiums that funeral homes have to pay on a monthly basis. This is necessary for legal requirements and it will take up a chunk of the startup costs.
  • Licenses – There are some licenses that funeral homes will need to acquire, which can also take up a lot of money during the startup phase. This includes operational permits and those that relate to the industry as a whole.
  • Hiring and Onboarding –  New funeral homes will have to hire new staff members and they will also need help from employees during the startup phase. This will obviously take up some of their funds, but it can be beneficial because once other businesses see how great your business is, they may want to invest in you themselves.
  • Rent – It is recommended to own a funeral home building rather than renting one. This is a better option because funeral homes will receive tax benefits if they own the building, but they will also have more flexibility when it comes to adapting their funeral home as the industry changes.


Is Owning a Funeral Home Profitable?

Yes, funeral homes can be highly profitable businesses if they have a lot of customers and loyal employees. While there are a few challenges funeral homes need to face when it comes to making a profit, once these issues are resolved, they will definitely see some return on investment.

The average funeral home in the United States makes a profit of $80,000 to $120,000 per year.


What are the Keys to Launching a New Funeral Home?

In order to launch a successful funeral home and make it profitable, you need to keep in mind the following:

Build Loyalty

This is one of the most important factors when trying to make a profit with your funeral home. You want customers who are willing to come back again and again, whether they be family members of the deceased, or people who are planning to eventually pass away themselves.

Offer Competitive Prices

Funeral homes need to offer lower prices than other funeral homes in order to attract customers. They should also offer customized services and packages that will help them save money as well as give the customer what they want.

Market Your Business Online

This is one of the best ways to market your funeral home today. You should definitely invest in social media platforms like Facebook. It would also be beneficial to set up a website where customers can receive information about your business as well as look at price lists and other necessary materials.

Additional Resources

Funeral Mavericks


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How to Start a Funeral Home FAQs

To start a funeral home you need to acquire the necessary permits and licenses. You will not only need to get a business license but also special licenses/certifications depending on your state laws.

For instance:

  • If you live in California you will need to acquire a license from the Board of Funeral Directors and Embalmers
  • If you live in New York you will need a funeral home license from the Department of Health, and so forth.

Marketing a funeral home needs to be done with care, as this is one of the steps that can determine if your business will succeed or fail. Marketing a funeral home usually includes advertising in local newspapers and magazines, building a website, creating business cards and brochures, and networking with funeral service providers in your area.

However, among those advertising options, building a website is the one that will definitely help your business grow. Since almost everything is operated online these days, it is important to have a website that clearly presents your business and the services you offer.

The first thing you will need to start a funeral home is to rent or purchase office space if it's available. If not, make sure to check for possible spaces that are fit for starting your funeral business.

Equipment and supplies such as caskets, urns, clothing, and automobiles will also need to be bought so you can offer the needed services for clients that need them.

One of the most important steps in growing your funeral home business is to offer quality services.

Offering quality service can make or break your funeral home business, so make sure to only hire the best personnel available. Once you have trained them well, they will be able to serve clients with utmost care and respect which is what all customers want in the end.

Keeping your customers happy will eventually result in them increasing word-of-mouth recommendations to family and friends, which can help grow your base of customers.

Having an online presence is another way to increase the customer base by using social media platforms to promote your business. You can also use websites like Yelp or Google Places to attract local customers.


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