Should you plan to start a funeral business, you need to plan the whole thing. It’s better that you look into it and pay attention to the details. After all, it’s still a business, and you want to be able to get some money out of it.
It’s a sad thing, but we still need to deal with death and funeral rituals and services. So, why not give the people the help they need with a funeral?
1. Plan the business
You need a clear plan for your business, no matter the type of business you have. Here are some aspects you may want to consider before going further with the planning:
What is the spending on opening a funeral business?
The equipment for embalming and cremation is mandatory. Even though the majority of people still go with a traditional burial, you should also provide cremation services. More and more people choose cremation over burial, so you don’t want to lose that category of customers.
Cremation table, hydraulic lifts, cremation system, computer, refrigerated storage, printer, and filling system are only some of the many that you need to buy.
An operating space, laborers, a parking lot, and operating space are also on the list of purchases. You also need to provide tables and couches for the viewing area. Add the automobile as well.
Don’t forget about the caskets and the regular items. The variety of caskets is impressive, and many customers get confused with the possibilities.
Think about recommending your customers to check the online options for purchasing a casket. You can also check, for instance, Trustedcaskets.com. Not only that, you can scroll through numerous models, but they’re also very efficiently organized. It’s tough to get confused or overwhelmed when the caskets are very clearly categorized. Besides, your customers will have the chance to choose from attractive prices that cover all kinds of budgets.
Is the ongoing spending high?
You will have to pay for the labor, utilities, operating space, caskets, marketing, and equipment for the cremation and embalming.
Just one embalming machine is around $3,000, and it’s not going to last forever either. You may pay from $5,000 to $10,000 per year only for equipment.
Don’t forget to add the rent, which can range from $700 to a couple of thousand dollars per month. Put aside some money for the marketing ($100 to $200 per month).
A funeral business manager will ask somewhere from $35,000 to $65,000 per year, but you also need to pay the accountant ($35,000 to $75,000), and the marketing agent (another $35,000 to $55,000).
As for the funeral home receptionist, he can cost you $10 to $12 per hour, whereas additional support staff can cost somewhere between $10 and $15 per hour.
How will you make money?
As a funeral business, you will make money by selling caskets, providing cremation and funeral services, urns, flowers, and any other type of services or items related to funeral services.
A regular funeral costs around $7,000, which includes embalming, viewing, transportation costs, cosmetics, and professional spending. You can charge more for all the other services that you provide.
As for profit, it all depends on how you’re managing the business. The chance of making hundreds of thousands of dollars per year is higher when you live in an area with many elderly. However, it’s going to take you a while until you get to that level.
2. Create a legal entity&Register for taxes
It’s wise to create a legal business entity (LLC is an example) so that you don’t get personally liable in case the funeral home is sued. However, there are multiple business structures to select from.
Maybe you want to hire a registered agent service for protecting privacy and remain compliant.
You must also register for numerous state and federal taxes before opening your business per se. The first step is to ask for an EIN through the IRS website, by mail, or via fax.
3. Open the business bank account & credit card
You have to protect your assets, which is why utilizing personal business banking and credit accounts is fundamental.
The business bank account will separate your assets from the company’s assets but also eases out the tax filing and accounting later on.
As for business credit cards, you want to do it for building a company credit history, which can help you raise money and invest in the future. It also helps you separate personal and business spending, placing the latter in just one place.
You should record the many expenses and sources of income so that you get a clear idea of your business’s financial performance. Try your best to have accurate and detailed accounts for making the annual tax filing a lot easier.
4. Get the required permits and licenses
You don’t want to pay any fines or have your business shut down right after opening, so make sure that you obtain all the required permits and licenses for the funeral business.
Go and check with the town/city/county clerk’s office about the local licenses and permits. The majority of businesses have to collect sales tax on the services and goods that they offer. Do due diligence about it.
5. Obtain a business insurance
Any business owner should have business insurance. When you also have employees, worker compensation insurance could be mandatory anyway.
6. Create your brand
Your brand should reflect your personality and values, standing out from other businesses. When you have a strong brand, people will choose you over the competitors.
It’s mandatory that you know your way on marketing your business through flyers, local radio/TV advertisements, social media, and so on. Don’t forget about the local newspaper, either.
Most of your clients are senior people that still like to read the newspaper and are not so much on social media.
Word of mouth advertising is still one of the most efficient ways of advertising. Try your best to please every single customer. Please pay attention to their needs and make sure that you don’t disappoint them.
7. Don’t forget about the Web
No business will nowadays thrive unless it is also present on the Web. It’s an easy way of making possible customers know you, and the services that you provide.
Social media is efficient for attracting new customers and clients. After all, everyone is on Facebook these days J