Steps to Create a Successful Crematorium Business

Here are the most important things to consider when you are starting a crematorium:

1. Location — Find a suitable location. The facility needs to be designed or adapted to accommodate cremation equipment safely and efficiently while providing a respectful atmosphere for clients. 
2. Licenses and permits — Some states or countries require a specific crematorium license that governs the operation of cremation equipment and facilities. Due to the emissions produced by cremation equipment, environmental permits are required to ensure compliance with federal, state, and local environmental protection laws.
3. Equipment — Invest in high-quality cremation equipment that complies with all environmental and safety standards. This includes cremation chambers, processing equipment for handling ashes, and pollution control systems to manage emissions.
4. Franchise — There are a couple of franchises to choose from such as Cremation Society, Neptune Society, and Trident Society.
5. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
6. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
7. Diversify your offer — Consider adding a pet crematorium to your business as it’s becoming more popular.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a crematorium has pros and cons to consider before deciding if it’s right for you. 

Crematorium industry trends

Industry size and growth

• Industry size and past growth – The US cremation services industry is worth $2.3 billion in 2022 after annual 3.1% growth the last five years.((https://www.ibisworld.com/industry-statistics/market-size/cremation-services-united-states/))
• Growth forecast – The US cremation services industry is projected to grow 3% in 2022.
• Number of businesses – In 2020, 13,333 cremation services businesses were operating in the US.((https://www.ibisworld.com/united-states/market-research-reports/cremation-services-industry/)) 
• Number of people employed – In 2022, the US cremation services industry employed 16,244 people. 

Trends and challenges

Trends in the crematorium industry include:

• By 2040, the cremation rate is expected to be nearly 80%, largely because it costs about one third as much as burial.
• Evolving technology in cremation furnaces is allowing them to use green electricity rather than expensive fuels. Alkaline hydrolysis is being used instead of traditional flame-based cremation. The process is more environmentally friendly and uses less fuel and has a lower carbon footprint than traditional cremation. 

Challenges in the crematorium industry include:

• Many funeral home businesses today offer cremation services, creating competition for crematorium businesses.
• Energy costs are rising, which makes the cost to perform a cremation higher.

How much does it cost to start a crematorium business? 

You can start a crematorium for around $140,000 to $165,000. The largest cost is the cremation furnace, which you can get with cremation training included for about $135,000. If you start a pet crematorium instead, your costs will be much lower, but so will your revenue. 

You’ll need a handful of items to successfully launch your crematorium business, including: 

• Cremation furnace
• Furnace fuel
• Cremation processor machine

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$150 - $200	$175
Business licenses and permits	$100 - $300	$200
Insurance	$100-$300	$200
Business cards and brochures	$200 - $300	$250
Website setup	$1,000 - $3,000	$2,000
Rental of an industrial structure	$10,000 - $20,000	$15,000
Furnace with training included	$130,000 - $140,000	$135,000
Total	$141,550 - $164,100	$152,825

How much can you earn from a crematorium business?

The average price of a cremation is $2,000. After costs, your profit margin should be about 30%. 

In your first year or two, you might do two cremations per week, bringing in $208,000 in annual revenue. This would mean $62,000 in profit, assuming that 30% margin. As your business gains traction, the number could increase to four cremations a week. With annual revenue of $416,000, you’d make a tidy profit of $125,000.

What barriers to entry are there?

There are a few barriers to entry for a crematorium. Your biggest challenges will be:

• The high startup costs of a cremation furnace
• Competition from funeral homes

Step 2: Hone Your Idea

Now that you know what’s involved in starting a crematorium, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research crematoriums in your area and beyond to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a pet crematorium or a crematorium that offers a carbon-free cremation service.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your services

Your services are pretty straightforward. You can offer human or pet cremations or both. You could also offer funeral services, but you’d need another location. You can also sell urns and wearable ash products such as lockets. 

How much should you charge for cremation services?

The average price of cremation services is around $2,000. Check prices in your area to make sure that you’re competitive. After fuel, rent, and labor, you should aim for a profit margin of about 30%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be people who are making funeral arrangements, whether pre-planned or immediate. It will tend to be more established people, so you can probably find them on Facebook. 

Where? Choose your business premises

You’ll need to find an industrial structure for your crematorium. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Crematorium Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “crematorium” or “cremation services”, boosts SEO
• Name should allow for expansion, for ex: “Eternal Rest Crematorium” over “Religious Cremation Services”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Crematorium Business Plan

Here are the key components of a business plan:

• Executive Summary: A brief summary outlining the key points of the crematorium business plan, including its purpose, goals, and potential for success.
• Business Overview: An overview of the crematorium business, highlighting its mission, vision, and the specific cremation services it will offer.
• Product and Services: Detailed information on the cremation services provided, including packages, pricing, and any additional offerings such as memorial services or urns.
• Market Analysis: Examination of the target market for cremation services, identifying trends, demographics, and demand factors to gauge the business’s potential success.
• Competitive Analysis: Evaluation of other crematoriums in the area, analyzing their strengths and weaknesses to position the new business strategically in the market.
• Sales and Marketing: Strategies for promoting the crematorium, reaching potential clients, and building a customer base, encompassing online and offline marketing efforts.
• Management Team: Introduction of the key individuals responsible for running the crematorium, highlighting their qualifications and roles in ensuring smooth operations.
• Operations Plan: A detailed plan outlining the day-to-day operations of the crematorium, including the cremation process, facility management, and compliance with regulations.
• Financial Plan: Projections for the financial aspects of the business, including startup costs, revenue forecasts, and break-even analysis.
• Appendix: Additional supporting documents and information, such as permits, legal documents, resumes of key team members, and any other relevant details that supplement the main body of the business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to crematoriums. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your crematorium will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a crematorium business. 

Step 8: Apply for Crematorium Business Licenses and Permits

Starting a crematorium business requires obtaining a number of licenses and permits from local, state, and federal governments.

States and localities have varying rules regarding specific licenses and permits that are required for crematoriums. Check with your state and local governments for requirements.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your crematorium business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as Halcyon, FrontRunner, or Cemsites, to manage your processes, labeling, invoicing, and payments.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

Here are some powerful marketing strategies for your future business:

• Professional Branding — Ensure your branding conveys a sense of serenity, respect, and professionalism, evident in your logo, facility presentation, and the tone of your marketing materials.
• Website & Local SEO — Develop a compassionate and informative website detailing the cremation process, your services, and memorialization options, optimized for search terms related to cremation, aftercare, and bereavement support. Regularly update your Google My Business and Yelp profiles to strengthen your local search presence.
• Direct Outreach — Establish referral partnerships with funeral homes, hospices, and elder care facilities, focusing on building relationships with local funeral directors.
• Content Marketing — Manage an educational blog that provides guidance on cremation planning, understanding the process, and coping with grief, complemented by FAQs and resource guides to assist families.
• In-Person Engagement — Host open house events to allow the public to visit your facilities, meet staff, and learn about cremation in a supportive setting, and participate in community events like health fairs and senior expos.
• Customer Support Programs — Offer follow-up services to provide ongoing support to families, including providing bereavement resources or support group contacts.
• Local Advertising — Advertise in local newspapers, church bulletins, and publications targeting seniors to reach potential clients within your community.
• Customized Memorialization Options — Highlight personalized services and memorialization options that cater to the specific needs and preferences of families, enhancing your service offering.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your crematorium meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your crematorium business could be: 

• Fulfill the final wishes of your loved ones with peaceful cremation  
• Keep your lost loved one with you always with our ash locket 
• Cremate your pet and scatter their ashes in their favorite place

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a crematorium business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in crematoriums for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in crematoriums. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a crematorium business include:

• Crematorium Workers – perform cremations
• General Manager – scheduling, accounting
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Crematorium – Start Making Money!

It may not be terribly exciting, but cremation is booming and offers great opportunity. It takes a large investment to start, but the returns are likely to be considerable. 

You understand the business side of things now, it’s time to start helping people fulfill their final wishes with your successful new business. 

Common Questions

Is a crematorium a profitable business?

Yes, a crematorium can be very profitable, although it takes a large upfront investment. More importantly, though, you’re performing a valuable service and helpful to fulfill final wishes.

How long does a body need to be cremated?

Generally, it takes about three hours to cremate a body. Then the remains have to be allowed to cool before they’re collected.

What temperature do crematoriums use?

Generally, crematoriums use heat of about 1800 Fahrenheit for about three hours, Then the ashes must be allowed to cool. 

What are the best practices for customer service in a crematorium business?

In a crematorium business, your customer service should have a gentle, empathic approach. You’ll want to be respectful of your customers’ grief. 

How do I handle and transport the remains of the deceased?

Requirements for handling and transporting bodies for cremation vary by state and locality. Often specific permits are required, as is written authorization by family members.