How Much Does It Cost to Own a Funeral Home?
There are more than two and a half million funerals in America every year. Prices for funerals vary from one region of the country to another, but with average funeral costs ranging from $8,000 to $10,000, it is a lucrative business. The largest population group in America at present is the baby boomers, who alone guarantee that a brisk funeral home business outlook for the next several decades.
The Business Model of Death
The business model of death is continuous. People have life cycles. They are born, they live, and they die. Just as people go to the hospital to be born, they go to the funeral home for help when a loved one passes from this world to the next. A funeral home’s business model is the working plan it lays out for how it plans to make a profit. Business models vary, depending upon the service or product offered.
Business models selling consumer goods have the option of running sales to increase their client base, but it doesn’t work that way in the funeral business. Funeral home employees, morticians and funeral directors all know that death is unpredictable. Even so, death is an inevitable part of living, which means there will always be a need for funeral services.
How to Own a Funeral Home Business
Many people gain ownership of a funeral homes through inheritance. In the funeral industry, many families work together and pass their businesses down. There are two other ways to own a funeral home business. One is to start one from scratch. The other is to purchase an already established funeral business.
Starting a funeral home from scratch is far more difficult, takes more time, and is more prone to expensive errors. Many existing funeral home businesses began with little more than a dream and dreams still come true today.
Purchasing the funeral home business where one works is also common. Purchasing a funeral home franchise is another option. Funeral home franchises are not yet the norm because many communities are loyal to funeral businesses that have served them well for generations. Private individuals own most funeral homes. Funeral home brokers arrange many sales of funeral homes.
What Are the Requirements to Open a Funeral Home?
The requirements to open a funeral home are straight-forward and readily obtained from each state’s board of funeral directors. Each state sets rules and regulations to govern the conduct of the funeral home profession. This benefits the public, who are more vulnerable to manipulation by shysters at a time of grief.
Funeral home facilities, morticians and undertakers, and funeral home directors all require state licenses. State code sets standard funeral home requirements. Like restaurants, funeral home businesses must be regularly inspected.
Concern for one’s fellow man is an undisputed requirement of running a successful funeral home operation. Those without a passion for others are unsuited for bereavement work. If an individual’s grief makes you want to cry, the chances are good that that profession is not a good fit for you. However, someone who recognizes the inevitability of death and is comfortable with it is apt to be of great value to those who have just suffered a loss.
Is the Funeral Business Attractive?
The funeral business is an attractive business model, but beauty is in the beholder’s eye. It is not for everyone, but for most of those who serve their community in this unique way it has benefits unlike any other. There is more to operating a funeral businesses than is immediately apparent. Funeral home businesses are about caring for people. What sells a funeral business is its reputation for service.
People with compassionate hearts will find the funeral industry an attractive one. The needs of grieving people require people with a special talent for rendering comfort when all seems bleak. Funeral homes fill an essential community need. It speaks well of the funeral business industry that surveys of funeral home owners illustrate high career satisfaction industry wide.
What Do Funeral Directors and Funeral Homes Do?
People wonder what funeral directors and funeral homes do. Put aside any macabre thoughts and instead focus on this: Funeral home directors and funeral homes bring comfort and order to people who are potentially enduring the worst days of their lives. There is a reason funeral homes are so often seen in older, established houses in the historic part of towns. It is because they are a pillar of the community, as much as the hospital and the church.
Funeral home directors help the bereaved make arrangements for the burial, cremation, and final services for their loved ones. It is uncharted territory for many, and few greater sources of strength are available than a funeral director who knows what you’re supposed to do next.
Average Salary of a Funeral Home Director
How much does a funeral home owner make a year? According to the Bureau of Labor Statistics, the mean wage earned by funeral home directors in the U.S. ranges between $32,830 in rural eastern Kentucky and $131,450 in the metro area of Lincoln, Neb. Rather than ask what is the average salary of a funeral home director, perhaps instead we should ask how much does a funeral home made per funeral?
What Are Recent Developments in the Funeral Business
Recent developments in the funeral business add further encouragement. Popular trends within the funeral business include environmentally friendly cardboard coffins, cremation necklaces, and tattoo ink. The distribution of many families is widespread today, and not everyone can get home for a funeral without advance notice. As a result, it is more popular for families to cremate or bury their loved one privately and then hold a formal memorial service some time later to accommodate the largest number of mourners.
Funeral homes in small towns know their clients. Some must provide all popular services for their clients because they are the only provider in town. Other funeral home directors have the option of providing services for a certain distinct clientele. Often, these will be the same people with whom the funeral director shops, dines out, and goes to church. No ethical undertaker looks forward to seeing their clients come through the door, but they commit to providing all they can at a difficult time to ease their pain and sorrow all the same.
Discover New Marketing Opportunities by Watching How People Save Money on Funeral Costs
Grieving people tend to feel emotional, and some are prone to guilt spending. According to Joshua Slocum, executive director of the Funeral Consumers Alliance, a nonprofit consumer-rights organization based in South Burlington, Vermont, “When a loved one dies, his/her relatives, friends or estate often pay upward of $10,000 for a full-service funeral, without considering alternatives. There are other options you could instruct your heirs to select if you would prefer a more distinctive exit strategy and/or lower cost.”
A general business principle, true for profitable funeral home businesses, is that those who adapt with the times are the ones who continue to thrive. All businesses must adapt to the changing desires of the clientele it serves. Funeral home directors who don’t understand this directive are more likely to fall behind as their former clientele marches away to other, nearby funeral homes that are less stubborn about accepting change. It is dangerous to the future of any funeral home business when those in leadership cannot accommodate the needs and desires of their clients.
The best way for a funeral director to identify new markets in the funeral industry is to pay attention to the things that people do to save money on funeral costs. Suggestions to save money include cremation, modest coffin purchases, and simplified floral arrangements. Many opt for direct burials, which all funeral homes offer, eliminate the cost of the embalming, the viewing, and the service, and are far less expensive. Suggestions offered by Slocum for a more flamboyant exit include:
- Donation to science–Donate the body to science via the closest teaching hospital. Although some hospitals charge transportation costs, usually this option is free.
- Cryonic freezing–Have your body cryonically frozen upon death. The idea is to wait until science has made sufficient progress and then reinvigorate the body. Options include whole body freezing, or, if preferred, just one’s head. The second option when the individual hopes to find a new body later on.
- Sea Burial–This option is free to those who have served in any branch of the US military. Sea burials require advanced planning and have rules. One is a requirement for attached weights on bodies buried at sea. A second is that all sea burials be a minimum of three miles from shore.
- Backyard burial–Another popular option for those with enough land is a backyard, or home burial.
- Rocket launch–The most adventurous have the option to send their ashes into space. Not all of them, but a portion. Versatile funeral homes are happy to help make such arrangements.
Many funeral home owners pride themselves on offering services that are sober, reverent, solemn, and serious. Community funeral home provides those without a church the secular equivalent. These quiet services aren’t going out of style soon just because some people make alternative decisions.
Funerals are like weddings in the sense that more people have begun to “do their own thing” and it is a wise funeral home director that avails himself to them as one able to make their end-of-life desires come to fruition. Funerals and memorial services are an important part of the grieving process and serve a purpose not just for the person who passed but for their families, and entire communities.
The Funeral Business Model Explained
That the funeral home business is profitable nearly anywhere one goes, anywhere in the country, says much about society’s universal need for compassionate funeral care for community members in their time of need. It isn’t possible for a funeral home to increase its clientele organically. But prepaid options, in which clients play and pay for their funerals ahead of time, is one way to even out the business’s cash flow.
People interested in becoming funeral directors or owning funeral homes should know in advance that people die at inconvenient times and they should be prepared to respond as the need dictates. The needs of the bereaved take precedence over everything else at such times. Advance payment for funerals is the norm unless there is an alternative payment arrangement. Those experiencing loss may expect their funeral director to provide help with things such as contacting the departed individual’s life insurance company, obituary wording and placement, clothing selection, and other important details.
Cost of Starting a Funeral Business in the United States
The cost of starting a funeral business in the United States depends upon variables such as location and the current cost of real estate, and whether the business is being built from the ground up or bought as a functioning entity. In the latter case it includes the fees for relevant licenses. Dedicated software is essential for any computerized funeral home establishment. Many municipalities require permits for things like pollution control, signage, fire department, and possibly others depending upon local codes.
After calculating the cost of the facility, a business consultant, marketing and advertising, insurance, staff, overhead, and inventory and you’re likely looking at an investment that ranges somewhere between $150,000 on the low end, ultimately to end up with a facility that can service several families, and upwards of $2.5 million on the high end, which would purchase a large-scale establishment simultaneously able to accommodate fifteen or more families.
Ideal Funeral Home Buyer Profile
That the funeral home business model is sound, productive, and thriving isn’t in question. It is a working formula: Invest in a funeral home and you’ll make money. The best reason for investing in a funeral home isn’t the money you’ll make, though, but the quality of life that accompanies the profession. Many funeral home owners confirm the pleasure they take in raising their children in view of the full spectrum of life, giving them the gifts of acceptance, compassion, and understanding. They enjoy filling a necessary role in their communities. They don’t see their business as merely a business, but rather, a way of life.
Contact the experienced team at BSF today for more information.