Set up Accounting. Get Necessary Permits & Licenses. Get Insurance. Define your Brand.
Financial Considerations and Market Potential
The cremation business is estimated as a $3-$5 billion industry, and growing. Prices for cremations vary, depending on fuel used and circumstances, with typical costs ranging between $1,000 and $2,500. Salaries for executives average around $60,000. Provide goods and services. Ashes are sealed in pendants, paperweights, and memorial bowls.
Meet the demand for simplicity and quality. The cremation rate in the US surpassed 50% in 2016 and continues to rise. This shift has created an opportunity for entrepreneurs to enter the market.
The sources and uses table shows where capital will come from and how it will be spent. It also highlights the starting cash position, which is key as the business needs sufficient funding until break-even.
Legal Requirements and Training
Get information on regulations, laws, permits, and licenses you need to open a crematorium. Formal training on operating crematory machines and running the business is necessary, though special certification is not required. If you come across any helpful certification, pursue it. Seek advice from professionals or other business owners if you have questions.
Setting Up and Staffing
You’ll need to find a location and equipment up to codes and industry standards. The Cremation Association has resources that will be invaluable to your new business. Hiring a trusted team is crucial, especially if you’re new to the industry; consider bringing in staff with experience in crematoriums.
International Considerations and Niches
The cost to set up a crematorium in South Africa is R7 million. A furnace costs R1.5 million and you need two to run a profitable business. Entrepreneurs are exploring less expensive niches like crematoriums for pets, which is promising as Russian law prohibits pet burial.
In South Africa, there are 10,000 legal funeral operators, generating R10 billion a year. It can cost R600,000 to R3 million to open a funeral parlour, depending on location and company. Opening a crematorium requires large start-up capital or investors.