- Profitability
- Startup Costs and Requirements
- Factors Affecting Profitability
The average profit for a funeral home is between 6 and 7 percent. As of 2018, there were over 19,000 funeral homes in the United States. The number has been dropping since 2004. The median cost of a funeral is $7,360.
A funeral home must have staff and facilities for planning and coordinating services. It also must carry products like caskets and urns. The main revenue is from services and products for families. Profitability varies by location, competition and services. The average margin is 20-25 percent. Demand is expected to increase due to aging.
Startup costs range from $150,000 to $300,000 for a small business. Ongoing success requires empathy, listening skills and creativity from staff. Factors affecting profitability include management style and business structure. Properly calculating overhead, adding profit as a line item, is the first step in pricing.
A funeral home in the right area can potentially make thousands per year. It may take years to reach this level. The growth of cremation has hit many funeral homes with a loss of revenue. Having a crematorium as part of your funeral home business is one way to stay afloat.