Starting Funeral home business plan

Are you looking for how to open funeral home? A funeral home business mortician and burial services for the deceased. The services may include funeral planning, body preparation, transportation, burial, or cremation.

Funeral homes have been in demand from always. However, these days the demand for funeral services has increased due to the sudden rise in death rate because of coronavirus.

While it’s true that the funeral home business is profitable, it’s also correct that running such a business is not easy. You will have to procure protective kits, chemicals, and a lot of other mortuary items on daily basis. Moreover, you will need to ensure that strict protocols and safety rules are being followed throughout the process.

To ensure the successful running of your business, it is essential to first create a business plan. If you don’t know the components of a comprehensive business plan, you can take help from this business plan for a funeral home startup, James Funeral Home.

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Executive Summary

2.1 The Business

James Funeral Home will be a licensed and registered funeral home based in San Antonio. The business will aim at performing all the funeral rituals including bathing and enshrouding, burial, cremation, etc. Moreover, the business will also provide catering services and transportation.

2.2 Management of Funeral home

Opening a funeral home is a relatively difficult venture. The funeral process needs to be carried out with great care and attention. Therefore, there must be efficient management and supervision to ensure that all of the sensitive tasks are taken care of properly.

Before exploring how to start a funeral home business you should keep in mind that it is a tough business. Running a funeral home means you have to be on call 365 days a year. Whether it’s Christmas or your wedding anniversary, you’ll have to arrange for the presence at the funeral home. In this sample plan on how to set up a funeral business we will be listing the details of how James Funeral Home will be managed and administered.

2.3 Customers of Funeral home

In your startup business plan for a funeral home, you should identify your customers. So that you can design your services accordingly. The customers of a funeral home are usually families of the deceased. However, in some cases, alive people also plan their funerals before dying.

2.4 Business Target

Our target is to become the number one choice of people of our city whenever they need funeral services. Moreover, we aim at boosting our net profit margin to $24k per month by the end of the three years.

3 Years Profit Forecast - Funeral Home Business Plan
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Company Summary

3.1 Company Owner

James Ben will be the owner of James Funeral Home. James holds a BS in Mortuary Science from Cincinnati College of Mortuary Science. He has also worked as an embalmer for two years.

3.2 Why the funeral home is being started

After working as an embalmer for two years, James decided to start a funeral home of his own. He entered the business world as he wanted to use his potential to the fullest. And to earn large profits while serving people on a wider scale.

3.3 How the funeral home will be started

Step1: Make Your Business Plan

James had good management skills. However, he didn’t possess the skill set required to make a crematorium business plan. He studied several funeral home business plan examples but eventually decided to hire a professional for it. The marketing analysis, sales strategy, and financial planning done by his business consultant are given in this sample funeral home business plan.

Step2: Get Identified 

The next step is to establish a physical basis for your business and define your business’ services and aims. After this, your customers will start recognizing your presence and the distinct features of yours as compared to your competitors.

Step3: Recruitments

The hiring process is actually a part of the step in which you set up your physical presence. In this phase, you have to organize tests and interviews to find the most skillful and responsible employees for your business.

Step4: A Strong Web Presence

Along with other operations of your funeral home business, it is really important to focus on web development too. Through a website, you will be able to reach a wider audience and leave a positive image of yourself before even interacting with people.

Startup Cost - Funeral Home Business Plan
Start-up Expenses 
Research and Development$25,000
Expensed Equipment$53,000
Start-up Assets$311,900
Cash Required$339,000
Start-up Inventory$48,000
Other Current Assets$218,000
Long-term Assets$238,000
TOTAL ASSETS$1,154,900
Total Requirements$1,556,300
Start-up Expenses to Fund$401,400
Start-up Assets to Fund$1,154,900
Non-cash Assets from Start-up$1,514,800
Cash Requirements from Start-up$356,000
Additional Cash Raised$47,800
Cash Balance on Starting Date$31,000
TOTAL ASSETS$1,949,600
Liabilities and Capital 
Current Borrowing$0
Long-term Liabilities$0
Accounts Payable (Outstanding Bills)$43,000
Other Current Liabilities (interest-free)$0
Planned Investment$1,556,300
Investor 1$0
Investor 2$0
Additional Investment Requirement$0
Loss at Start-up (Start-up Expenses)$324,300
Total Funding$1,556,300
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    Before owning a funeral home, it is essential to decide your services. Through this practice, you can make arrangements for equipment and space accordingly. In this business plan template for funeral home, we’re listing the services that James Funeral Home will provide.

    • Funeral Planning

    Our primary service will be providing funeral plans. These days, many people have started to purchase funeral plans. So that their families don’t have to stress over their funeral charges after their death. In this service, we’ll also be responsible for informing all the friends/ relatives of the deceased about the death.

    • Body Preparation

    We will prepare the dead body to be buried or cremated. This service will include all the relevant tasks such as bathing the deceased, enshrouding, etc. The paperwork required for burial will also be completed by us.

    • Burial/ Cremation

    We will provide space for performing eulogies and brief prayers for the dead. Moreover, we’ll also be responsible for burying the dead body. Since in some religions, there is a ritual of cremating the deceased. Thus we’ll be offering cremation services too.

    • Transportation

    We’ll also transport dead bodies from one place to another in specialized refrigerated vehicles.

    • Catered Meal

    We’ll offer plated dinner to the mourners in a location other than our funeral home. Since funeral homes are generally prohibited to offer food in the same building, we decided to offer it in another building located nearby.

    Marketing Analysis of Funeral Home

    Accurate marketing analysis is the key to get prominent in the market as soon as you get launched. For doing so it is essential to know the market, direct and indirect competitors, stakeholders, and market fluctuations. An accurate market analysis will enable you

    • To recognize the potential customers
    • To identify the needs and expectations of your target customers
    • To decide a pricing strategy for the business plan that would allow you to meet financial goals while drawing more customers than your competitors

    James studied several funeral home business plans to identify potential customers and market trends. However, he ended up realizing that hiring a professional market analyst would be better for him. As that will make him achieve a greater level of accuracy.

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    5.1 Market Trends

    Funeral homes are high in demand especially after the surge in deaths due to coronavirus. According to IBISWorld, there are more than 28k funeral homes running in the United States. Moreover, Statista predicts that the cremation rate in the U.S. would rise to 79.1 percent by 2035 – resulting in a need for more funeral homes.

    Thus, it is evident that opening a funeral home will not run you into a loss. You only need to do efficient planning before starting funeral home to ensure success for your business.

    5.2 Marketing Segmentation

    The detailed marketing segmentation of our target audience is as follows:

    Marketing Segmentation - Funeral Home Business Plan

    5.2.1 Families of Deceased

    Our primary customers will be the families of late. We expect them to avail of our body preparation, burial, and catering services. In San Antonio, the population is quite large and so the death rate. Therefore, we expect to get a considerable number of customers.

    Our business values are based on customer care. We totally empathize with the families of the deceased. And therefore, to help the grievers in their misery we are offering body preparation and burial services at relatively lower prices.

    5.2.2 Funeral Planners

    Our second group of target customers will comprise alive people who purchase funeral planners before they die. These days, many adults and seniors have started to buy funeral plans so that their families and friends do not have to arrange money for their funerals.

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    5.2.3 Old Homes for Elder Orphans

    The third category of our target customers will include the organizations that shelter elder orphans. Elder orphans are the senior people who do not have any friends or family to look after them. The funeral charges of such people are often paid by shelter homes. Thus, we expect them to contact us for our services too.

    Market Analysis       
    Potential CustomersGrowthYear 1Year 2Year 3Year 4Year 5CAGR
    Families of Deceased49%51,00053,00056,00060,00063,0009.00%
    Funeral Planners35%39,00042,00043,00044,00047,00010.00%
    Old Homes for Elder Orphans16%16,00017,00018,00019,00021,00010.00%

    5.3 Business Target

    Setting financial and customers’ related goals before starting a business is a good practice. It allows the business owners to direct the energy and resources towards the company’s goals.


    And it is important because how much do funeral home owners make is entirely dependent on how well they could manage their assets.

    Our business targets are:

    • To earn a profit margin of $24k per month by the end of the third year
    • To maintain a CSAT score of above 85%
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    5.4 Product Pricing

    The prices of our funeral plans and catered foods are a little higher as compared to our competitors. However, our other services could be availed at lower rates than those of our competitors.

    Marketing Strategy

    Sales strategy is another component that can decide the future of your business. This part enables you to reach out to your target customers and increase your sales on a monthly and yearly basis.

    In this marketing plan for funeral home, we’re providing the sales strategy of James Funeral Home.

    6.1 Competitive Analysis

    James studied several funeral business ideas to find out the areas where his competitors were lacking. After that analysis, he decided to come up with the following competitive aspects:

    • James Funeral Home will have a user-friendly app so that people can connect to it remotely and conveniently.
    • Secondly, it’s the only funeral home in the whole city that is providing catering meals to the mourners in a separate location.
    • Third, it has extremely responsible employees who’ll always adhere to SOPs and strict protocols.

    6.2 Sales Strategy

    • We’ll promote our startup through Google Local ads and local magazines
    • We’ll offer a 50% discount to the first 100 purchasers of our funeral plans
    • We’ll offer a 30% discount on our transport and catered meal services for the first two months of our launch

    6.3 Sales Monthly

    Sales Monthly - Funeral Home Business Plan

    6.4 Sales Yearly

    Sales Yearly - Funeral Home Business Plan

    6.5 Sales Forecast

    Funeral Home Business Plan Sample - Unit Sales
    Sales Forecast   
    Unit SalesYear 1Year 2Year 3
    Funeral Planning32,00033,92035,955
    Body Preparation/ Transportation46,00048,76051,686
    Burial/ Cremation40,00042,40044,944
    Catered Meal24,00025,44026,966
    TOTAL UNIT SALES142,000150,520159,551
    Unit PricesYear 1Year 2Year 3
    Funeral Planning$56.00$64.96$75.35
    Body Preparation/ Transportation$47.00$54.52$63.24
    Burial/ Cremation$51.00$59.16$68.63
    Catered Meal$40.00$46.40$53.82
    Funeral Planning$1,792,000.00 $2,203,443.20 $2,709,353.76
    Body Preparation/ Transportation$2,162,000.00 $2,658,395.20 $3,268,762.74
    Burial/ Cremation$2,040,000.00 $2,508,384.00 $3,084,308.97
    Catered Meal$960,000.00 $1,180,416.00 $1,451,439.51
    TOTAL SALES$6,954,000.00 $8,550,638.40 $10,513,864.98
    Direct Unit CostsYear 1Year 2Year 3
    Funeral Planning$52.00$58.00$67.00
    Body Preparation/ Transportation$46.00$51.00$60.00
    Burial/ Cremation$48.00$56.00$64.00
    Catered Meal$37.00$42.00$48.00
    Direct Cost of Sales   
    Funeral Planning$1,664,000.00 $1,967,360.00 $2,408,998.40
    Body Preparation/ Transportation$2,116,000.00 $2,486,760.00 $3,101,136.00
    Burial/ Cremation$1,920,000.00 $2,374,400.00 $2,876,416.00
    Catered Meal$888,000.00 $1,068,480.00 $1,294,387.20
    Subtotal Direct Cost of Sales$6,588,000.00 $7,897,000.00 $9,680,937.60

    Personnel plan

    Before starting a funeral parlor business you should make a list of employees you will need along with their job descriptions.

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      7.1 Company Staff

      James will be the CEO himself. However, he’ll hire the following staff

      • 2 Supervisors to help manage the operations
      • 1 Accountant to maintain financial records
      • 1 Front Desk Officer
      • 8 Morticians to perform funerals
      • 3 Cooks to prepare food
      • 2 Waiters to serve food
      • 8 Cleaners to maintain the facilities
      • 3 General Assistants for routine tasks and paperwork
      • 1 Sales Executive to promote the company
      • 1 Web developer/ App Developer to manage the company’s website and app
      • 2 Drivers to transport dead bodies

      7.2 Average Salary of Employees

       Personnel Plan   
       Year 1Year 2Year 3
      General Assistants$21,000$23,100$25,410
      Sales Executive$8,000$8,800$9,680
      Front Desk Officer$6,500$7,150$7,865
      Web Developer$13,000$14,300$15,730
      Total Salaries$233,500 $256,850 $282,535

      Financial Plan

      Financial planning for a funeral home business is a little complicated. Firstly, because you’ll need to buy and discard certain materials and protective kits off and on. And secondly due to the complexity involved in setting prices of funeral plans. When you sell a funeral plan to a person you don’t know the inflation rate that will prevail at the time of their death. The period may be shorter or longer – resulting in unpredictable losses or profits.

      However, there are still many areas through which you can control the financial trajectory of your business. In this build a funeral home business plan, we’re providing the financial plan developed for James Funeral Home. So that you can have an idea of the cash flows, gross margins, and business ratios for this business.

      8.1 Important Assumptions

       General Assumptions   
       Year 1Year 2Year 3
      Plan Month123
      Current Interest Rate8.01%8.09%8.13%
      Long-term Interest Rate8.17%8.24%8.29%
      Tax Rate23.98%24.03%24.11%

      8.2 Brake-even Analysis

      Brake-even Analysis - Funeral Home Business Plan
       Brake-Even Analysis 
      Monthly Units Break-even5403
      Monthly Revenue Break-even$136,750
      Average Per-Unit Revenue$232.00
      Average Per-Unit Variable Cost$0.65
      Estimated Monthly Fixed Cost$162,000

      8.3 Projected Profit and Loss

       Pro Forma Profit And Loss   
       Year 1Year 2Year 3
      Sales$6,954,000 $8,550,638 $10,513,865
      Direct Cost of Sales$6,588,000 $7,897,000 $9,680,938
      TOTAL COST OF SALES$6,588,000 $7,897,000 $9,680,938
      Gross Margin$366,000 $653,638 $832,927
      Gross Margin %5.26%7.64%7.92%
      Sales and Marketing and Other Expenses$125,000$128,000$133,000
      Leased Equipment$0$0$0
      Payroll Taxes$36,000$38,000$40,000
      Total Operating Expenses$404,700 $433,530 $466,790
      Profit Before Interest and Taxes($38,700)$220,108$366,137
      Interest Expense$0$0$0
      Taxes Incurred($7,740)$44,022$73,227
      Net Profit($30,960)$176,087$292,910
      Net Profit/Sales-0.45%2.06%2.79%

      8.3.1 Profit Monthly

      Profit Monthly - Funeral Home Business Plan

      8.3.2 Profit Yearly

      Profit Yearly - Funeral Home Business Plan

      8.3.3 Gross Margin Monthly

      Funeral Home Business Plan Sample - Gross Margin Monthly

      8.3.4 Gross Margin Yearly

      Gross Margin Yearly - Funeral Home Business Plan

      8.4 Projected Cash Flow

      Projected Cash Flow - Funeral Home Business Plan
       Pro Forma Cash Flow   
      Cash ReceivedYear 1Year 2Year 3
      Cash from Operations   
      Cash Sales$53,000$57,240$61,819
      Cash from Receivables$15,400$16,632$17,963
      SUBTOTAL CASH FROM OPERATIONS$69,000 $75,210 $81,227
      Additional Cash Received   
      Sales Tax, VAT, HST/GST Received$0$0$0
      New Current Borrowing$0$0$0
      New Other Liabilities (interest-free)$0$0$0
      New Long-term Liabilities$0$0$0
      Sales of Other Current Assets$0$0$0
      Sales of Long-term Assets$0$0$0
      New Investment Received$0$0$0
      SUBTOTAL CASH RECEIVED$70,000 $76,000 $82,000
      ExpendituresYear 1Year 2Year 3
      Expenditures from Operations   
      Cash Spending$31,000$34,000$37,000
      Bill Payments$21,000$22,000$23,000
      SUBTOTAL SPENT ON OPERATIONS$52,000 $56,000 $60,000
      Additional Cash Spent   
      Sales Tax, VAT, HST/GST Paid Out$0$0$0
      Principal Repayment of Current Borrowing$0$0$0
      Other Liabilities Principal Repayment$0$0$0
      Long-term Liabilities Principal Repayment$0$0$0
      Purchase Other Current Assets$0$0$0
      Purchase Long-term Assets$0$0$0
      SUBTOTAL CASH SPENT$52,600 $56,808 $61,353
      Net Cash Flow$15,300$16,400$17,200
      Cash Balance$24,000$25,900$27,300

      8.5 Projected Balance Sheet

       Pro Forma Balance Sheet   
      AssetsYear 1Year 2Year 3
      Current Assets   
      Accounts Receivable$25,200$28,224$31,724
      Other Current Assets$1,000$1,000$1,000
      TOTAL CURRENT ASSETS$291,000 $325,920 $366,334
      Long-term Assets   
      Long-term Assets$10,000$10,000$10,000
      Accumulated Depreciation$16,940$18,973$21,344
      TOTAL LONG-TERM ASSETS$20,800 $23,296 $26,208
      TOTAL ASSETS$296,000 $331,520 $372,960
      Liabilities and CapitalYear 4Year 5Year 6
      Current Liabilities   
      Accounts Payable$17,500$19,600$22,030
      Current Borrowing$0$0$0
      Other Current Liabilities$0$0$0
      SUBTOTAL CURRENT LIABILITIES$14,800 $16,576 $18,631
      Long-term Liabilities$0$0$0
      TOTAL LIABILITIES$15,000 $16,800 $18,883
      Paid-in Capital$30,000$30,000$30,000
      Retained Earnings$54,800$59,732$65,705
      TOTAL CAPITAL$272,200 $296,698 $326,368
      TOTAL LIABILITIES AND CAPITAL$287,200 $331,520 $372,960
      Net Worth$272,200$296,698$326,368

      8.6 Business Ratios

       Ratio Analysis    
       Year 1Year 2Year 3INDUSTRY PROFILE
      Sales Growth7.39%8.19%9.07%3.00%
      Percent of Total Assets    
      Accounts Receivable9.31%10.32%11.43%9.80%
      Other Current Assets2.16%2.39%2.65%2.40%
      Total Current Assets151.00%151.00%152.00%158.00%
      Long-term Assets11.61%11.70%11.82%12.00%
      TOTAL ASSETS100.00%100.00%100.00%100.00%
      Current Liabilities4.65%4.69%4.73%4.34%
      Long-term Liabilities0.00%0.00%0.00%0.00%
      Total Liabilities7.22%7.28%7.34%7.38%
      NET WORTH100.10%100.90%101.83%110.00%
      Percent of Sales    
      Gross Margin94.87%97.43%100.16%99.00%
      Selling, General & Administrative Expenses92.94%95.45%98.12%97.80%
      Advertising Expenses1.53%1.57%1.62%1.40%
      Profit Before Interest and Taxes40.98%42.09%43.26%33.90%
      Main Ratios    
      Total Debt to Total Assets0.18%0.19%0.18%0.40%
      Pre-tax Return on Net Worth74.66%75.30%76.50%75.00%
      Pre-tax Return on Assets95.20%99.96%104.96%112.00%
      Additional RatiosYear 1Year 2Year 3 
      Net Profit Margin31.40%32.37%33.38%N.A.
      Return on Equity55.70%57.43%59.21%N.A.
      Activity Ratios    
      Accounts Receivable Turnover7.87.87.9N.A.
      Collection Days100100100N.A.
      Inventory Turnover3334.6535N.A.
      Accounts Payable Turnover16.316.917.5N.A.
      Payment Days272727N.A.
      Total Asset Turnover2.52.62.6N.A.
      Debt Ratios    
      Debt to Net Worth-0.03-0.04-0.04N.A.
      Current Liab. to Liab.111N.A.
      Liquidity Ratios    
      Net Working Capital$228,700$241,507$255,032N.A.
      Interest Coverage000N.A.
      Additional Ratios    
      Assets to Sales0.860.870.89N.A.
      Current Debt/Total Assets1%0%0%N.A.
      Acid Test28.0128.528.93N.A.
      Sales/Net Worth2.12.12.1N.A.
      Dividend Payout000N.A.

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