How to Open a Funeral Home — Ultimate guide

Craft Your Business Plan

While in the past, the trend was for funeral homes to be passed down from parent to child and so on, the times are changing. We are now seeing more and more independent ownerships pop up that are not inherited from previous generations. Thus, you will have competition from funeral directors who have had the business in their families for decades, but if you conduct your research, delineate a plan, and work closely with a business attorney, you should be all set.

A business plan is necessary no matter what field you are in, and no matter if this is your first business or your twenty-first business. Everything that you venture into requires some pre-planning so that you can preempt any hiccups or obstacles along the way.

The main components of a business plan include:

  • Executive Summary. Here is where you detail what your funeral business is all about and what your primary goals are. It’s essentially a declaration of who you are, what you will provide to your clients, and how you will go about doing that. In order to get any type of help from the bank — such as a small business loan — you are going to need a business plan, so use this section as a quick way to present the overview of your company. Discuss here how you will work with your clients and how you will ease them through their time of grief with your services.
  • Market Analysis. In this section, you will put forth the research you’ve done on your target market as well as the competition for your area. Look into the community trends: what is the demand for the type of funeral services that you are providing? Are there any ethnic or cultural differences between your intended services and the types of services that are prevalent or wanted in your community? What is being offered by the funeral competitors in your community, and what sets them apart from you? All of these components should be answered as you set forth to grow your business.
  • Marketing Plan. You might be the most prepared person in the world, your designs might be flawless and eye-catching, but you are nothing without a steady client base! Your business plan will have to address how you plan on reaching your clientele and what you are going to do to get your name out there.
  • Funeral Services Overview. In this section, you will get into the specifics about the types of funeral services you are going to offer to your clients. Most funeral homes oversee the actual funeral as well as the transportation and removal of the body. You will also be expected to oversee the preparation and presentation of the body, as well as any other forms of care needed; the casket or coffin; music; floral arrangements or urns; scattering or interment of ashes; and more. Be clear within your business plan what it is you intend to offer.

Register Your Business Entity

Once you have crafted your business plan, you will have to decide how you want to register your business. There are a variety of classifications when it comes to this process, known as business entities. These business entities include:

  • Sole proprietorship
  • Partnership
  • Limited Liability Company, or LLC
  • Corporation

First, you should choose a name for your business that you will register as your official business name. Be sure to check with your state and the federal registry to make yourself aware of other business names so as not to either duplicate or have a name that sounds too similar to another funeral home. One of the best elements to consider is how easy it will be to remember your business name. That way, in an urgent time of need, people will be able to recollect your funeral home without doing much research.

Second, decide what kind of an entity you’d like to register as. Recall that an LLC, or a Limited Liability Company, is an entity which protects you as the individual. Should your business be sued, your personal assets would be protected.

Third, register for all of the necessary taxes. You can do this easily by first applying for an EIN, or an Employer Identification Number through the IRS website. Then, be sure to register for the required state and federal taxes.

Finally, be sure to secure all of the necessary business licenses that come with starting your own business. Check with your local government to determine what kinds of permits and licensing you will need, especially if you plan on purchasing or using a home for your funeral business, versus buying a funeral home business outright. To help you navigate this journey, it is always recommended that you consult a business attorney.

Assess the Costs

First and foremost, there are insurance costs that must be taken into account when you open your doors as a funeral director. Since your funeral home and the vehicle(s) you use are commercial entities, you will have to obtain commercial insurance to cover them should any damage be done to the equipment, the home, or the vehicle(s). A general liability insurance will also have to be obtained. As always, it is recommended that you check with your local government and your business attorney to ensure you have covered everything.

Next, factor in the costs to get your business up and running. Your equipment will include the following (but will not be limited to just what you see below):

  • Your funeral home/space
  • Utilities
  • Labor and employee costs
  • Equipment for embalming and/or cremation
  • Urns
  • Floral costs
  • Decorations and seating
  • Caskets and coffins
  • Cosmetic supplies

Note that all of the above are going to be revolving costs, meaning you will not pay for them just once. When you figure out how much one funeral is going to cost you, then you can calculate how much you should charge your clients. Recall that the first year of business is always the toughest financially.

Find a Location

You might not want to convert your own residence into a funeral home, which is entirely your choice. Should you want to rent a building as your base of operations, then you are going to have to go back to your market analysis from your business plan to determine the right location for you.

Size, location, and the interior of the home all matter. A sizable home or building will dictate how much business you can handle at any given time, as well as how many people you can accommodate during one ceremony.

The interior of the home should be tasteful and demure. People are coming to your funeral home during a somber time in their lives, and the last thing you want is for your decor to be flashy and to draw too much attention. The interior should also be comforting. There is a reason why funeral ‘homes’ look the part.

Lastly, try to rent or look for a space with a spacious parking lot. This will make it so that your business vehicles can get in and out of the lot with ease, and will also ensure that more guests can park in the lot to attend the funeral. Your clients will be grateful that you made the process smooth for them from the moment they arrive.

Market Yourself

Many people do not realize it, but a funeral home must have a marketing strategy. Although it’s not the happiest sector of business to draw attention to, an owner still has to get his/her name out there. Instead of being flashy with your brand, you will want to maintain a more serious, somber tone that also connotes respect. For this, it is important to craft a logo to make yourself look legitimate and credible. One that features your business name will allow people to not only remember you, but they will associate the logo with your services.

You might also want to invest in a professional website that lists your services. During a time of loss, people are not going to want to spend time price checking and comparing, since they will be in a state of grief. Make it easy for your clients upfront. Let them know exactly what your services and offerings are, and have your contact information readily accessible.

The easier you make this process for them, the more grateful they will be. If you connect with them on an emotional level through your marketing and your outreach, then they will be more likely to consider your services. If you treat their business like a simple, emotionless transaction, then they will more than likely not book you nor will they recommend you. Always remember the emotional standpoint of the clients you will be working with



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