Start a crematorium by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your crematorium. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a crematorium?
Crematoriums need an initial investment for a building and equipment, but can often recoup their initial investment fairly quickly. Budget between $100,000 and $250,000 to start, depending on the location and cremation services offered. Animal cremation furnaces are considerably less than ones for human remains, due to industry standards. The two, by law, cannot be used for other than their intended purposes.
Consider these items in your initial budget:
- Industrial property lease or purchase
- Furnace and fuel equipment
- Business insurance - work with an experienced professional and inquire about both business and liability insurance
- Transportation/delivery vehicle(s)
- Certifications and licensing
- Marketing - if this isn’t your strong suit, consider seeking help from an advertising agency or inbound marketer
If franchising is an option, your initial investment could be estimated between $20,000 and $50,000. The initial investment is less, but so is your earning potential. You will pay a percentage to the parent company for equipment and advertising.
What are the ongoing expenses for a crematorium?
Monthly expenses will fluctuate. Approximate $10,000 - $15,000 per month, depending on the amount of cremations performed.
- Fuel expenses - between $15-$35 per cremation
- Property lease/rent- $1,500 to $4,000 per month
- Furnace maintenance and servicing - $400
- Payroll and taxes - $7,500
- Marketing $150/month
Who is the target market?
Your clients will often consist of other funeral homes, who are using your facility and equipment. Many established funeral homes are not equipped for cremations on site and must turn to an outside service. In some cases, a crematorium will operate independently and will see customers directly.
How does a crematorium make money?
Cremation businesses make money off of each cremation they perform.
How much can you charge customers?
Prices will vary somewhat, depending on the amount of fuel used and any special circumstances. Typical costs for a cremation service range between $1,000 and $2,500.
How much profit can a crematorium make?
Currently, the cremation business is on the rise. It is estimated that it is a $3-$5 billion industry, and growing. Salaries for crematorium executives average around $60,000.
How can you make your business more profitable?
Because cremation renders the remains to ashes, numerous products or services have sprung up around this industry. Offer some of the services as alternative revenue sources.
- Wearable remains - The ashes are sealed into glass pendants, paperweights of commemorative bowls.
- Plantable remains - Ashes are used in the germination and growth of plant or tree seeds.
- Launch your ashes into space
- Create an artificial reef structure with the ashes.
- Carbon free cremation - The cremation process uses alkali hydrolysis to break down the body, instead of fire.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Crematorium Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your crematorium is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a crematorium. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A crematorium is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a crematorium.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your crematorium will be in compliance and able to obtain a CO.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
How to promote & market a crematorium
Since much of your work takes place behind the scenes and out of sight, it is critical that you develop and network with funeral homes and funeral directors in your area. Develop a reputation as someone who takes their job seriously. Become involved with professional organizations and associations in your field. This will help you network and will keep you abreast of the latest trends and technology. This vested interest will convey your professionalism to those you regularly work with.
If you choose to specialize in pet cremations, become associated with veterinary offices and pet groomers around your area. Between word of mouth and business cross-referencing, customers will become aware of your services and reputation.
How to keep customers coming back
Few people find comfort in the passing of a loved one and you want to be as easy to work with as possible. It’s also necessary to understand the trends and business you’re a part of. No matter how you say it, there will always be customers for this business. How you retain business partners, and attract new clients, will often depend on your professionalism and reputation, which will determine your lasting success.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Crematorium In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
A compassionate individual who is comfortable with the disposal of human remains would do best in this profession.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a crematorium?
A cremation business owner will fall into an established routine, with the occasional deviation in schedule.
Day-to-day activities will consist of:
- Scheduling cremation services
- Networking and communicating with funeral homes
- Marketing for your customer base
- Scheduling routine maintenance on building and equipment
- Researching your industry and emerging trends, equipment, and techniques
- Scheduling and training staff
- Handling various administrative duties
- Complying with safety procedures
What are some skills and experiences that will help you build a successful crematorium?
Compassion and strong communication skills, both with customers and other funeral service businesses is necessary. Being personable and professional in this business is also critical. Attention to detail and strong business acumen will also be an asset. For cremation certification, following industry trends, and ongoing enterprise support, the International Cemetery, Cremation, and Funeral Association and Cremation Association of North America offer significant resources.
What is the growth potential for a crematorium?
The crematorium industry is rapidly expanding and becoming increasingly profitable. Numerous families and individuals are making the choice to cremate, as opposed to the traditional funeral procedures and cost. Many pet owners are also choosing to cremate, which adds another facet to the industry.
TRUiC's YouTube Channel
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a crematorium?
This industry is rapidly becoming a popular choice for entrepreneurs. Therefore, it’s important to consider the advice of those that have paved the path for you:
- Research the competition and saturation levels, in your region, prior to opening a business.
- Develop a relationship with the funeral home directors in your area. Networking is your greatest asset.
- Create a business plan before investing / finding investors and follow your plan. Carefully consider all of the costs associated with this kind of start-up.
- Talk with successful and established cremation owners you’re not in competition with. What worked for them?
How and when to build a team
You may not need a very large team for this business, especially initially. Over time, look for reliable and level-headed people to join your business. As with all employees, yours will represent your company and reputation. Persons with experience in the medical field or patient care are sometimes good fits, as they often have the right temperament.