Funeral Home Business Plan

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Table of Content

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.

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.

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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.
Start-up Expenses

Legal $252,400

Consultants $0

Insurance $32,000

Rent $35,000

Research and Development $25,000

Expensed Equipment $53,000

Signs $4,000
TOTAL START-UP EXPENSES $401,400

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 FUNDING

Start-up Expenses to Fund $401,400

Start-up Assets to Fund $1,154,900

TOTAL FUNDING REQUIRED $1,556,300

Assets
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

Liabilities $26,000

Current Borrowing $0

Long-term Liabilities $0

Accounts Payable (Outstanding

$43,000
Bills)

Other Current Liabilities (interest-

$0
free)

TOTAL LIABILITIES $69,000

 Capital

Planned Investment $1,556,300

Investor 1 $0

Investor 2 $0

Other $0

Additional Investment
$0
Requirement

TOTAL PLANNED INVESTMENT $1,556,300

Loss at Start-up (Start-up

$324,300
Expenses)

TOTAL CAPITAL $1,880,600

TOTAL CAPITAL AND

$1,949,600
LIABILITIES

Total Funding $1,556,300

Services
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.

Business Plan for Investors

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:

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.

Marke
t
Analy
sis

Potenti
al Gro Year Year Year Year Year CAG
Custo wth 1 2 3 4 5 R
mers

Famili 49% 51,0 53,0 56,0 60,0 63,0 9.00

es of 00 00 00 00 00 %
Decea
 sed

Funera
l 39,0 42,0 43,0 44,0 47,0 10.0
35%
Planne 00 00 00 00 00 0%
rs

Old
Homes
for 16,0 17,0 18,0 19,0 21,0 10.0
16%
Elder 00 00 00 00 00 0%
Orpha
ns

100 106, 112, 117, 123, 131,

Total 10%
% 000 000 000 000 000

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.

Note
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%
Valentin Marinov

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Thank you so much for your hard work!

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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

6.4 Sales Yearly

6.5 Sales Forecast

Sales Forecast

Unit Sales Year 1 Year 2 Year 3

Funeral Planning 32,000 33,920 35,955

Body Preparation/
46,000 48,760 51,686
Transportation

Burial/ Cremation 40,000 42,400 44,944

Catered Meal 24,000 25,440 26,966

TOTAL UNIT
142,000 150,520 159,551
SALES

Unit Prices Year 1 Year 2 Year 3

Funeral Planning $56.00 $64.96 $75.35

Body Preparation/
$47.00 $54.52 $63.24
Transportation

Burial/ Cremation $51.00 $59.16 $68.63

Catered Meal $40.00 $46.40 $53.82

Sales

Funeral Planning $1,792,000.00 $2,203,443.20 $2,709,353.76

Body Preparation/
$2,162,000.00 $2,658,395.20 $3,268,762.74
Transportation

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 Costs Year 1 Year 2 Year 3

Funeral Planning $52.00 $58.00 $67.00

Body Preparation/
$46.00 $51.00 $60.00
Transportation

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/
$2,116,000.00 $2,486,760.00 $3,101,136.00
Transportation

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
$6,588,000.00 $7,897,000.00 $9,680,937.60
Cost of Sales

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 1 Year 2 Year 3

Supervisors $20,000 $22,000 $24,200

 Accountant $9,000 $9,900 $10,890

Morticians $55,000 $60,500 $66,550

Cooks $24,000 $26,400 $29,040

Waiters $14,000 $15,400 $16,940

Cleaners $49,000 $53,900 $59,290

General Assistants $21,000 $23,100 $25,410

Sales Executive $8,000 $8,800 $9,680

Drivers $14,000 $15,400 $16,940

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 1 Year 2 Year 3

Plan Month 1 2 3

Current Interest Rate 8.01% 8.09% 8.13%

Long-term Interest Rate 8.17% 8.24% 8.29%

Tax Rate 23.98% 24.03% 24.11%

Other 0 0 0

8.2 Brake-even Analysis

 Brake-Even Analysis

Monthly Units Break-even 5403

Monthly Revenue Break-even $136,750

Assumptions:

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 1 Year 2 Year 3

Sales $6,954,000 $8,550,638 $10,513,865

Direct Cost of Sales $6,588,000 $7,897,000 $9,680,938

Other $0 $0 $0

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%

Expenses

Payroll $233,500 $256,850 $282,535

Sales and Marketing and

$125,000 $128,000 $133,000
Other Expenses

Depreciation $2,100 $2,180 $2,260

Leased Equipment $0 $0 $0

Utilities $2,700 $2,900 $3,200

Insurance $2,000 $2,100 $2,195

Rent $3,400 $3,500 $3,600

Payroll Taxes $36,000 $38,000 $40,000

Other $0 $0 $0

Total Operating
$404,700 $433,530 $466,790
Expenses

Profit Before Interest and

($38,700) $220,108 $366,137
Taxes

EBITDA ($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

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 Projected Cash Flow

Pro Forma Cash Flow

Cash Received Year 1 Year 2 Year 3

Cash from Operations

Cash Sales $53,000 $57,240 $61,819

Cash from Receivables $15,400 $16,632 $17,963

SUBTOTAL CASH FROM

$69,000 $75,210 $81,227
OPERATIONS

Additional Cash Received

Sales Tax, VAT, HST/GST
$0 $0 $0
Received

New Current Borrowing $0 $0 $0

New Other Liabilities

$0 $0 $0
(interest-free)

New Long-term Liabilities $0 $0 $0

Sales of Other Current

$0 $0 $0
Assets

Sales of Long-term Assets $0 $0 $0

New Investment Received $0 $0 $0

SUBTOTAL CASH
$70,000 $76,000 $82,000
RECEIVED

Expenditures Year 1 Year 2 Year 3

Expenditures from
Operations

Cash Spending $31,000 $34,000 $37,000

Bill Payments $21,000 $22,000 $23,000

SUBTOTAL SPENT ON
$52,000 $56,000 $60,000
OPERATIONS

Additional Cash Spent

Sales Tax, VAT, HST/GST

$0 $0 $0
Paid Out

Principal Repayment of
$0 $0 $0
Current Borrowing

Other Liabilities Principal

$0 $0 $0
Repayment

Long-term Liabilities
$0 $0 $0
Principal Repayment

Purchase Other Current

$0 $0 $0
Assets

Purchase Long-term
$0 $0 $0
Assets

Dividends $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

Assets Year 1 Year 2 Year 3

Current Assets

Cash $278,000 $311,360 $342,496

Accounts Receivable $25,200 $28,224 $31,724

Inventory $5,000 $5,600 $6,294

Other Current Assets $1,000 $1,000 $1,000

TOTAL CURRENT
$291,000 $325,920 $366,334
ASSETS

Long-term Assets
Long-term Assets $10,000 $10,000 $10,000

Accumulated Depreciation $16,940 $18,973 $21,344

TOTAL LONG-TERM
$20,800 $23,296 $26,208
ASSETS

TOTAL ASSETS $296,000 $331,520 $372,960

Liabilities and Capital Year 4 Year 5 Year 6

Current Liabilities

Accounts Payable $17,500 $19,600 $22,030

Current Borrowing $0 $0 $0

Other Current Liabilities $0 $0 $0

SUBTOTAL CURRENT
$14,800 $16,576 $18,631
LIABILITIES

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

Earnings $202,600 $220,834 $242,917

TOTAL CAPITAL $272,200 $296,698 $326,368

TOTAL LIABILITIES AND

$287,200 $331,520 $372,960
CAPITAL

Net Worth $272,200 $296,698 $326,368

8.6 Business Ratios

Ratio Analysis

INDUSTRY
Year 1 Year 2 Year 3
PROFILE

Sales Growth 7.39% 8.19% 9.07% 3.00%

Percent of Total
Assets

Accounts
9.31% 10.32% 11.43% 9.80%
Receivable
Inventory 5.44% 6.03% 6.68% 9.90%

Other Current
2.16% 2.39% 2.65% 2.40%
Assets

Total Current
151.00% 151.00% 152.00% 158.00%
Assets

Long-term Assets 11.61% 11.70% 11.82% 12.00%

TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%

Current Liabilities 4.65% 4.69% 4.73% 4.34%

Long-term
0.00% 0.00% 0.00% 0.00%
Liabilities

Total Liabilities 7.22% 7.28% 7.34% 7.38%

NET WORTH 100.10% 100.90% 101.83% 110.00%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 94.87% 97.43% 100.16% 99.00%

Selling, General &
Administrative 92.94% 95.45% 98.12% 97.80%
Expenses

Advertising
1.53% 1.57% 1.62% 1.40%
Expenses

Profit Before
40.98% 42.09% 43.26% 33.90%
Interest and Taxes

Main Ratios

Current 37 37.9 38.5 32

Quick 33 35 35.875 33

Total Debt to Total

0.18% 0.19% 0.18% 0.40%
Assets

Pre-tax Return on
74.66% 75.30% 76.50% 75.00%
Net Worth

Pre-tax Return on
95.20% 99.96% 104.96% 112.00%
Assets

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 31.40% 32.37% 33.38% N.A.

Return on Equity 55.70% 57.43% 59.21% N.A.

Activity Ratios

Accounts
Receivable 7.8 7.8 7.9 N.A.
Turnover

Collection Days 100 100 100 N.A.

Inventory Turnover 33 34.65 35 N.A.

Accounts Payable
16.3 16.9 17.5 N.A.
Turnover

Payment Days 27 27 27 N.A.

Total Asset
2.5 2.6 2.6 N.A.
Turnover

Debt Ratios

Debt to Net Worth -0.03 -0.04 -0.04 N.A.

Current Liab. to
1 1 1 N.A.
Liab.
 Liquidity Ratios

Net Working $241,50

$228,700 $255,032 N.A.
Capital 7

Interest Coverage 0 0 0 N.A.

Additional Ratios

Assets to Sales 0.86 0.87 0.89 N.A.

Current Debt/Total
1% 0% 0% N.A.
Assets

Acid Test 28.01 28.5 28.93 N.A.

Sales/Net Worth 2.1 2.1 2.1 N.A.

Dividend Payout 0 0 0 N.A.

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