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 step guide to starting your crematorium. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
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 long it will take you to break even?
- 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 very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your crematorium is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
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?.
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.
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.
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
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
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.
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.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
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.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
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.
A compassionate individual who is comfortable with the disposal of human remains would do best in this profession.
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.
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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.
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.