Suppose you are passionate about helping people cope with the loss of their loved ones and providing them with dignified and personalized funeral services. In that case, you may be interested in learning how to start a funeral home business.
A funeral home business can be a rewarding and profitable venture and a worthy service to your community. However, creating a funeral home business is not an easy task. It requires a lot of planning, research, investment, licensing, and marketing.
In this guide, we will answer some of the most frequently asked questions (FAQs) on how to start a funeral home business and provide tips and resources to help you succeed.
How to Start a Funeral Home Business
When starting a funeral home business, one of the first questions you must answer is how much it will cost and how you will finance it. The typical startup costs for a new funeral home range from $250,000 to $500,000, based on the size and location of the facility, the equipment and supplies needed, and the staffing requirements.
Some of the significant expenses include:
- Rent or purchase a suitable building
- Renovation and furnishing of the facility
- Purchase or lease of vehicles such as hearses and vans
- Purchase of prep room equipment and supplies such as embalming machines, tables, instruments
- Purchase of chapel, selection room, and office equipment and furnishings such as chairs, caskets, urns, computers, printers, etc.
- Purchase of funeral service items such as auto flags, flower equipment, emergency pouches, body bags, etc.
- Purchase inventory such as caskets, urns, vaults, flowers, stationery, etc.
To finance your startup costs, you have several options to choose from. Some of the most common ones are:
- Bank loans: You can source a business loan from a bank or credit union offering favorable terms and interest rates. You will need a good credit score, a solid business plan, and some collateral to secure the loan.
- SBA loans: You can also go for a loan from the Small Business Administration (SBA), which guarantees up to 85% of the loan amount and offers lower interest rates and more extended repayment periods than conventional loans. However, SBA loans are more competitive and have stricter eligibility criteria and documentation requirements.
- Angel investors: You can seek funding from angel investors, wealthy individuals who invest in startups in exchange for equity or a share of the profits. They can provide not only capital but also mentorship and connections. However, finding and pitching to angel investors can be challenging and time-consuming, and you will have to give up some control and ownership of your business.
- Crowdfunding: You can also raise money from the public through online platforms such as Kickstarter or GoFundMe, where you can showcase your business idea and offer rewards or incentives to potential backers. Crowdfunding can be a great way to ascertain the market demand for your services and generate some buzz and publicity. However, crowdfunding can also be risky and uncertain, as you may need to reach your funding goal or deliver on your promises.
- Personal savings: You can also use your money to start your funeral home business, either by tapping into your savings account, selling some assets, or borrowing from friends and family. Using your savings can give you more freedom and flexibility in running your business, as you don’t have to worry about repaying debts or satisfying investors. However, using your savings can also be risky and limit your growth potential, as you may need more funds to cover unexpected expenses or emergencies.
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What are the licensing and regulatory requirements for a funeral home business?
Another critical question you need to answer when starting a funeral home business is what licensing and regulatory requirements you must comply with. According to TRUiC, the licensing and regulatory requirements for a funeral home business vary by state and locality but generally include the following:
- Obtaining a funeral director license: To become a licensed funeral director, you need to meet specific educational and experiential requirements, such as completing an accredited mortuary science program, passing a national or state exam, completing an apprenticeship or internship under a licensed funeral director, and fulfilling continuing education credits.
- Obtaining a funeral establishment license: To operate a funeral home business, you need to get a permit from your state or local board of funeral service or health department. You must submit an application form, pay a fee, pass an inspection of your facility and equipment, and comply with specific standards and regulations regarding sanitation, safety, record-keeping, etc.
- Obtaining a preneed sales license: If you plan to offer preplanning services to your customers, where they can arrange and pay for their funeral services in advance, you need to obtain a preneed sales license from your state or local board of funeral service or insurance department. You will need to submit an application form.
- Submit an application form, pay a fee, pass an exam, and comply with specific rules and regulations regarding the management and protection of the preneed funds.
- Obtaining an embalming license: If you plan to offer embalming services to your customers, where you preserve and prepare the deceased’s body for viewing or burial, you must obtain an embalming license from your state or local board of funeral service or health department. You must meet similar requirements for the funeral director license, such as completing an approved mortuary science program, passing a national or state exam, completing an apprenticeship or internship under a licensed embalmer, and fulfilling continuing education credits.
- Obtaining a crematory license: If you plan to offer cremation services to your customers, where you reduce the deceased’s body to ashes using high heat, you need to obtain a crematory license from your state or local board of funeral service or environmental protection agency. You will need to submit an application form, pay a fee, pass an inspection of your crematory equipment and facility, and comply with specific standards and regulations regarding emissions, waste disposal, record-keeping, etc.
- Additionally, funeral homes must comply with federal laws such as:
- The Funeral Rule: This law is enforced by the Federal Trade Commission (FTC) that protects consumers’ rights when dealing with funeral providers. The Funeral Rule demands funeral providers give customers accurate and itemized price information, allow customers to choose only the goods and services they want, provide written statements of the final costs and arrangements, and not engage in deceptive or unfair practices.
- The Occupational Safety and Health Act (OSHA) is a law enforced by the Occupational Safety and Health Administration (OSHA) that protects workers’ health and safety in the workplace. OSHA requires funeral homes to provide a safe and healthy work environment for their employees, such as providing personal protective equipment, training, medical surveillance, exposure control plans, etc.
- The Americans with Disabilities Act (ADA): is a law enforced by the Department of Justice (DOJ) that protects the rights of people with disabilities in public accommodations. ADA requires funeral homes to make their facilities and services accessible and accommodating to people with disabilities, such as providing ramps, elevators, restrooms, parking spaces, communication aids, etc.
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What types of services and products can a funeral home business offer?
According to Growthink, some of the types of services and products that a funeral home business can offer include:
- Traditional burials: This is the most common type of service where the deceased’s body is put in a casket and buried in a cemetery or other location. A traditional burial service usually involves a viewing or visitation, a funeral ceremony at a church or chapel, a procession to the burial site, and a graveside service.
- Cremations: This is a service where the deceased’s body is reduced to ashes using high heat. A cremation service can be combined with a viewing or visitation, a funeral ceremony at a church or chapel, or a memorial service at a later date. You can place the ashes in an urn, littered in a meaningful place, or buried in a cemetery or other locations. Buried in a cemetery or different site or a columbarium or niche.
- Memorial services: This is a service where the deceased’s body is not present, but the family and friends gather to honour and remember the dead’s life. A memorial service can be held at a church, chapel, funeral home, or any other venue. A memorial service can include music, readings, prayers, eulogies, photos, videos, etc.
- Preplanning services: This is a type of service where the customer arranges and pays for their funeral services in advance. Preplanning services can help customers save money, avoid inflation, lock in prices, express their wishes, relieve their families from stress and burden, and ensure peace of mind.
- Caskets: This product holds and displays the deceased’s body for a burial or cremation service. Caskets can be made of different materials such as wood, metal, fiberglass, plastic, etc. Caskets can also vary in size, shape, color, design, features, etc.
- Urns: This product is used to hold and display the deceased’s ashes after a cremation service. Urns can be made of different materials such as ceramic, metal, wood, glass, stone, etc. Urns can also vary in size, shape, color, design, features, etc.
- Vaults: This product is used to enclose and protect the casket or urn in the ground. Lockers can be made of concrete, metal, plastic, etc. Lockers can also vary in size, shape, design, features, etc.
- Flowers: This is a type of product that is used to decorate and beautify the casket or urn, the funeral or memorial service venue, the burial site, etc. Flowers can be styled in different ways, such as bouquets, wreaths, sprays, baskets, etc. Flowers can also vary in type, color, meaning, etc.
- Stationery: This product is used to communicate and commemorate the funeral or memorial service. Paper can include invitations, programs, thank-you cards, bookmarks, prayer cards, etc.
To successfully establish and manage your funeral home business, it’s essential to adhere to all the steps outlined in this guide meticulously. If you need further assistance, kindly drop a comment in the box.