The average profit for a funeral home is between 6 and 7 percent. Properly calculating overhead, adding profit as a line item, is the first step in pricing. 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. 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.
Services and Revenues
A funeral home offers products and services for funerals and memorials. It must have staff and facilities for planning and coordinating services. It also must carry products like caskets and urns. Running a professional funeral home can be profitable. The main revenue is from services and products for families.
Profitability varies by location, competition and services. The average margin is 20-25 percent. This is relatively high, making funeral homes lucrative. Demand is expected to increase due to aging. Careful planning and attention to detail is still required.
A funeral home in the right area can potentially make thousands per year. It may take years to reach this level. Factors affecting profitability include management style and business structure.
Business Practices for Success
Overall, with good business practices, owning a funeral home can be profitable. You need an appropriate location, quality service and efficiency. Startup costs range from $150,000 to $300,000 for a small business. Ongoing success requires empathy, listening skills and creativity from staff.