Death is one of the only certainties in life.

For those who are looking for a business venture, it makes sense to consider the funeral home industry. It’s a good choice for someone with a strong business acumen who is at peace with their own mortality.

Running a funeral home could be a lucrative business in the right market. Nearly everyone will use one or more of the products a funeral home offers, so there is a lot of opportunity for growth.

Here are some tips on how to get started:

Step 1: Write your Business Plan

After coming up with the idea, the next step in starting your funeral home business should be to write a business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.

Step 2: Form a Business Entity

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements. Seek out an accountant or business formation attorney to help walk you through the best choice for your needs.

Step 3: Name the Business

Finding the perfect business name for a funeral home business can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.

Step 4: Select your Location

The rent for a funeral home can be significant because of the size of the building needed. In addition to rent, most buildings will require significant renovations to make them suitable. Because of these renovations and the unique design that a funeral home requires, many funeral home owners purchase their buildings rather than renting them. Finding an existing funeral home for sale or rent may be the best option, saving on renovation time and costs and allowing the business to open sooner.

Step 5: Apply for Business Licenses and Permits

States require different licensing requirements for embalmers and funeral directors. There is oversight from the Federal Trade Commission (FTC) as funeral homes are regulated under the Funeral Rule, which protects customers from non-transparent bundling of products and services being sold. Many states also have regulations on pre-need planning services, which results in funeral homes being audited.

Local health departments and the Occupational Safety and Health Administration (OSHA) will need to certify the funeral home is up to code and cleared to operate.

In addition to professional licensing, there are general business registrations at the local, state, and federal level that a funeral home might need, such as a sales tax permit, Employer Identification Number, and Occupancy Permit, among others.

Step 6: Find Financing

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a funeral home is another. In general, banks like to loan money to funeral homes as demand is steady. That said, getting the funding to start a funeral home can be difficult. In order to get a loan, the borrower(s) will need to have good credit and be able to personally invest 15-25% towards the total start-up costs.

Step 7: Open a Business Bank Account

Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the business’s income and expenses.

Step 8: Get your Marketing Plan in Place

Funeral homes rely on ongoing marketing to bring in new clients. Some common marketing activities include social media marketing, print advertising, and even TV and radio ads. Marketing costs will vary depending on the type of activity being performed.

Step 9: Get Insurance

A funeral home will require several types of insurance policies to be fully covered:

  • General liability insurance protects the business if a customer is ever injured while on the property. This type of policy can cover costs like legal fees and expenses.

  • Commercial property insurance will reimburse the business for insured equipment, property, and inventory lost or damaged in an event like a fire.

  • Commercial automobile insurance protects the business against expenses that can occur if a business vehicle is involved in an accident.


    Worker’s compensation insurance helps to cover expenses like medical bills or lost wages if an employee is ever hurt while on the job.

Insurance policy costs vary depending on many factors like the value of the business’ equipment, the business’ location, and the number of employees on staff. For the most accurate idea of what insurance will cost, request quotes from multiple providers. When comparing the quotes, pay attention to details like policy coverage limits and exclusions, premiums, and deductibles.

Step 10: Hiring Employees

Funeral homes need even a small staff to operate well, and many staff positions are specialized, requiring particular education and skills. According to ZipRecruiter, the following are average annual salaries for common funeral home staff positions:

  • Funeral home manager – $66,666
  • li Funeral director – $50,228
  • Embalmer – $42,909
  • Funeral home driver – $38,710
  • Mortuary assistant – $35,997
  • Funeral assistant – $27,701

In addition to budgeting for salaries, a funeral home’s budget also needs to account for expenses like worker’s comp insurance, paid time off, and health insurance contributions.

Step 11: Set up an Accounting System

Setting up an accounting system for your funeral home is critical to the long-term success of your business. Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

As with any new venture, it’s important to thoroughly research your location and your target market to understand the services that will be most in-demand. Prepare your business plan, seek out other professionals who already operate successful funeral home businesses, lean on guidance from professionals like business formation lawyers, accountants, and others. The stronger you build your foundation, the greater chance for your success.

Since our inception, Osiris Software has been helping funeral homes, cemetery and crematory businesses prosper through innovative solutions and world class customer service.