The number of funeral homes in the United States has been dropping steadily since 2004. As of 2018, there were over 19,000. A funeral home must have staff and facilities for planning and coordinating services. The main revenue is from services and products for families. Profitability varies by location, competition, and services offered.
Profitability and Pricing
The average profit for a funeral home is between 6 and 7 percent. The median cost of a funeral is $7,360. Adding profit as a line item is the first step in pricing. The average margin is 20-25 percent.
Factors Affecting Profitability
A funeral home in the right area can make potentially thousands per year. It may take years to reach this high level. Factors affecting profitability include management style and business structure. Since the population is aging, the demand for funeral services is increasing.
Starting a Funeral Home Business
With good business practices and an appropriate location, owning a funeral home can be profitable. Startup costs range from $150,000 to $300,000 for a small business. Ongoing success requires listening skills and creativity from staff.