20 Steps to Start a Funeral Home and Funeral Business
Opening a funeral home and funeral business means entering one of the most relationship-driven, regulation-shaped industries in the country. This guide walks you through every decision — from choosing a location and securing a funeral director's license to building the supplier relationships and community trust that keep a family-owned operation running for generations.
Most people who read this are already doing the work. You may have helped a family arrange a service, dug a grave, sold a headstone, or handled someone's ashes, and been paid for it. That is a real business, whether or not any paper says so. The steps below are ordered so the paperwork catches up to the work you already do, not the other way round. If you are earning now, you have not done anything wrong by starting before the forms. Start where the flow points you and work forward from there.
This guide walks you through starting a funeral and cemetery business from the first sale to a written plan. It is built for someone who already knows the work — the caring, the arranging, the physical labor — and now wants to stand it up as something official. Read it in order or jump to the step the flow above points you to.
Before any form or account, decide that this is the work you are committing to. Funeral and cemetery work asks a lot of you — it is physical, emotional, and always on someone else's worst day. Sit with that for a few minutes this week. Picture a full year of it: the calls at odd hours, the grieving families, the steady quiet of the grounds. If that still feels right, say so out loud or write it down with a date. Deciding is not a formality. It is the thing that carries you through the slow parts and the hard parts. Everything after this step assumes you have made this choice on purpose, not by drift.
You cannot sell "funeral and cemetery services" — it is too big to price or explain. Pick the single thing you do best and lead with it. It might be arranging a full service, cremation handling, grave preparation and burial, or making and setting memorials. Write one plain sentence this week: "I sell ___ to ___." That sentence is your anchor. You can add more later, but starting with one clear offer means people know exactly what to call you for, and you know exactly what you are getting good at. A narrow start beats a broad blur every time, and it makes every later step — pricing, permission, suppliers — far simpler to sort out.
A funeral home and funeral business sells almost entirely direct to the families it serves — there is no distributor layer between the provider and the person making arrangements. The people who come to you fall into a few recognizable groups. Immediate family members arranging services for a loved one are the most common: they find you through prior relationship, word-of-mouth referral from another family, or an online search made under time pressure. Pre-need customers — individuals planning their own services in advance — represent a second important group and often arrive through community presentations or referrals from financial planners and estate attorneys. Hospitals, hospice programs, and long-term care facilities are a third source: when a resident or patient passes in their care, staff call a funeral home on behalf of the family, making those institutional relationships a quiet but steady referral channel for any funeral home and funeral business.
Make one real sale before you build anything else. A sale proves people will pay you, and it teaches you more thanany plan. This week, tell five people plainly what you do and that you are open for it — a hospice nurse, a clergy member, a neighbor, a former customer, a hospital contact. Offer the one thing from step 2 at a fair price and follow through completely. Do the work well, ask how it went, and note what they actually asked for. One paid job tells you whether your offer lands, what people expect, and what you missed. It also gives you the confidence to keep going. Everything after this is building around work that already sells.
Now think about the shape your business takes on paper. You may already be earning cash — that is fine and common. Choosing a structure is just deciding how you and the business relate legally: as one and the same, or as separate things. Common options are operating as yourself (a sole proprietor), a partnership if you share it, or a limited liability company that separates your personal money from the business. Each has different protection and paperwork. This week, read a plain-language summary of these from your state's business office and note which fits your situation. You are not committing yet — you are learning the choices so the next step is a quick one, not a guess.
If you have been earning without registering, this is where the paperwork catches up — not a punishment, just the next step. Register the structure you chose in step 5 with your state's business filing office, usually the Secretary of State. This makes the business a recognised thing that can hold a bank account, sign contracts, and carry insurance. This week, find your state's business registration portal and read what an entity filing requires. If you picked sole proprietor, you may only need a trade-name filing; an LLC needs formation documents. Have your business name and address ready. Registering does not erase your past informal work — it simply gives that work a formal home going forward.
With your entity registered, get the numbers that let it operate. An Employer Identification Number from the IRS identifies your business for tax and banking — you can apply for one directly at no cost. Then register with your state's tax authority for any sales or service tax that applies, and check with your city or county clerk about a local business registration. Funeral and cemetery work is heavily governed, so local rules matter. This week, apply for the EIN and write down the two other offices you need to contact — state tax and local clerk. Keep every confirmation in one folder. These registrations are what let you invoice cleanly, open accounts, and be found as a legitimate operator.
Funeral homes and funeral business operations sit in the licensed tier of regulatory oversight. The core permission you need is a funeral director's or funeral establishment license, issued by your state's licensing board for funeral directors or mortuary science professionals. In most states the physical facility itself also requires a separate establishment permit from that same board. Because the business handles human remains, it also intersects with state health department rules governing preparation rooms and disposition methods. Confirm every requirement directly with your state's funeral service licensing board before you serve a single family. The category of permission and the issuing body matter more than any checklist; requirements differ meaningfully by state.
Open a bank account in the business's name and run all business money through it. Mixing personal and business funds is the single most common thing that turns tidy books into a mess, and for a licensed field it can undermine your standing. Take your entity registration and EIN to a bank or credit union this week and ask what they need to open a business account. Once it is open, route every payment from families and every payment to suppliers through it. This one habit makes bookkeeping, tax, and any future audit far simpler. It also signals to families and referral partners that you run this properly. Do it before you take your next paid job if you can.
The first money in a funeral home and funeral business goes, in order, to the physical facility — either a lease deposit and tenant improvements or an outright purchase of an existing building configured for the work. After the facility comes preparation room equipment: embalming tables, refrigeration units, and ventilation systems built to code. The next cost layer is the vehicle fleet, starting with at least one removal vehicle and one hearse. Casket, urn, and merchandise opening inventory follows. Technology — funeral management software, a website, and payment processing — comes next, along with initial insurance premiums covering general liability, professional liability, and vehicle coverage. Finally, budget for working capital to cover payroll and operating costs during the months before cash flow stabilizes. The total range varies considerably based on whether you build, buy, or lease.
This work carries real risk — physical labor, vehicles, handling human remains, holding families' trust and money. Insurance is what keeps one bad day from ending the business. Common coverage includes general liability, professional liability for the arrangements you handle, vehicle coverage if you transport, and coverage for your premises and equipment. If you ever hold funds in advance for future services, some states require specific protection for that money. This week, call an independent insurance agent who has worked with funeral or cemetery operators and describe exactly what you do. Ask what coverage is standard for your work and what your state or licence requires. Get it in writing. Being insured also makes you the safer choice when families and partners decide who to trust.
A funeral home and funeral business draws from a wider supply network than most people expect. Two categories are especially central. Miscellaneous durable goods wholesalers Miscellaneous Durable Goods Wholesalers supply the caskets, urns, memorial products, and related merchandise that families select during arrangement conferences — this is typically the largest merchandise cost center. Miscellaneous manufacturing firms Miscellaneous Manufacturing produce the specialized items the industry relies on: clothing, viewing accessories, and preparation supplies that are not stocked by general distributors. Concrete product manufacturers Other Concrete Product Manufacturing supply grave liners and burial vaults, which many funeral homes sell or coordinate as part of full-service arrangements. The full supplier picture for a funeral home and funeral business extends beyond these three categories; the relationships you build across that broader network directly affect your margins and service quality.
Write down how you do the work, step by step, while it is fresh. In this field, consistency is dignity — families need the same careful handling every time, and regulators expect documented process. Pick your most common job and write out every step from first call to final follow-up: what you ask, what you do, what you record, who you notify. This week, do this for one service. Keep it simple enough that someone else could read it and understand your standard. These written steps become your training material when you hire, your defence if a family questions something, and your own checklist on a hard day. They also reveal gaps you didn't notice while everything lived in your head.
Keep clean records from your first dollar. For each job, note what you charged, what it cost you, and when you were paid. Keep receipts for every supplier payment and expense. Funeral and cemetery work often involves holding money for future services, so your records must clearly separate what is yours now from what is held for later. This week, set up a simple system — a spreadsheet or bookkeeping tool like QuickBooks — and enter your last month of activity to start the habit. Good records tell you whether you are actually making money, make tax time short instead of frightening, and satisfy the reporting your licence may demand. Do a few minutes weekly rather than a panicked scramble once a year.
Set your business up to handle tax before it surprises you. Because you are now earning through a registered entity, you likely owe income tax on profit and may need to collect and remit sales or service tax depending on your state and what you sell. Self-employment tax also applies to your own earnings. This week, set aside a fixed share of every payment into a separate account so the money is there when tax is due. Talk to a tax professional who knows small service businesses about which taxes apply to your entity type and how often to file. Getting this right early costs a little time; getting it wrong costs penalties and stress. Treat set-aside money as never yours to spend.
At some point you cannot do every service alone. Your first help might be a contractor you call for grave preparation or transport, or an employee you train to your standard. The difference matters: employees involve payroll, withholding, and more legal duty; contractors run their own businesses and invoice you. In a licensed field, check whether the person needs their own credential for the tasks you give them. This week, decide which tasks you would hand off first and whether they suit a contractor or an employee. Write a short description of that role. Bringing in help too late burns you out; bringing it in without deciding the arrangement creates tax and legal trouble. Choose the structure on purpose.
The first three sales for a new funeral home and funeral business almost always come from personal networks and community visibility rather than advertising. If the owner or funeral director has worked in the area for another firm, former families who trusted that individual personally are the most likely first callers — loyalty to a practitioner often transfers to their new location. The second source is civic and religious community ties: introducing yourself to clergy, grief counselors, hospice social workers, and hospital chaplains before you open means your name is already in circulation when a need arises. The third path is a visible, professional physical presence in the neighborhood — a clean, dignified building with clear signage tells the community you are open and serious before a single dollar is spent on marketing.
Being findable and being trusted are two different things — you need both. Get your business listed where families search: a Google Business Profile, local directories, and any funeral or cemetery association listings your state recognises. Then get verified wherever a platform offers it, so your licence and legitimacy show plainly. This week, create or claim your Google Business Profile and add your hours, service area, and a real photo. Ask two families you served well to leave an honest review. In this field, families choose with great care and often on a recommendation — visible reviews and a verified listing do quiet, constant work for you. Keep every listing accurate; a wrong phone number or address costs you the call.
Once you have a few months of real numbers, compare them to how others in funeral and cemetery work actually operate. Look at typical costs, typical margins, and how time is spent across services. This tells you whether your pricing is sane, your costs are in line, and where you are leaving money or effort on the table. This week, find one industry benchmark source — a trade association report or a small-business data summary — and compare a single figure, like your average revenue per service, against it. You are not aiming to match everyone; you are looking for the places where you are far off and asking why. This check turns your own records into decisions instead of just history.
Now write the plan — after you know the work, not before. A plan built on real sales, real costs, and real benchmarks is worth something; one built on guesses is fiction. Keep it short: what you sell, who buys it, what it costs to deliver, how you find families, and what you want the next year to look like. This week, draft one page using everything you gathered in the earlier steps, in a simple document or a tool like LivePlan. Revisit it every few months as your numbers change. The plan is not for a drawer or a bank alone — it is how you decide what to do next with your eyes open. Finish it, then use it.
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