As an alternative to the traditional casket funeral services, many consumers are choosing cremation for themselves or loved ones. Cremation offers families options on the final resting place and reduces funeral costs considerably.
Ready to turn your business idea into a reality? We recommend forming an LLC as it is the most affordable way to protect your personal assets. You can do this yourself or with our trusted partner for a small fee.
Northwest ($29 + State Fees)
DIY: How to Start an LLC
Start a crematorium by following these 10 steps:
- Plan your Crematorium
- Form your Crematorium into a Legal Entity
- Register your Crematorium for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Crematorium
- Get the Necessary Permits & Licenses for your Crematorium
- Get Crematorium Insurance
- Define your Crematorium Brand
- Create your Crematorium Website
- Set up your Business Phone System
We have put together this simple guide to starting your crematorium. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Exploring your options? Check out other small business ideas.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What will you name your business?
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
Luckily we have done a lot of this research for you.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Crematorium Name Generator
If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
When registering a business name, we recommend researching your business name by checking:
- Your state’s business records
- Federal and state trademark records
- Social media platforms
- Web domain availability
It’s very important to secure your domain name before someone else does.
What are the costs involved in opening a crematorium?
Crematoriums need an initial investment for a building and equipment, but can often recoup their initial investment fairly quickly. Budget between $100,000 and $250,000 to start, depending on the location and cremation services offered. Animal cremation furnaces are considerably less than ones for human remains, due to industry standards. The two, by law, cannot be used for other than their intended purposes.
Consider these items in your initial budget:
- Industrial property lease or purchase
- Furnace and fuel equipment
- Staffing
- Business insurance – work with an experienced professional and inquire about both business and liability insurance
- Transportation/delivery vehicle(s)
- Certifications and licensing
- Marketing – if this isn’t your strong suit, consider seeking help from an advertising agency or inbound marketer
If franchising is an option, your initial investment could be estimated between $20,000 and $50,000. The initial investment is less, but so is your earning potential. You will pay a percentage to the parent company for equipment and advertising.
What are the ongoing expenses for a crematorium?
Monthly expenses will fluctuate. Approximate $10,000 – $15,000 per month, depending on the amount of cremations performed.
- Fuel expenses – between $15-$35 per cremation
- Property lease/rent- $1,500 to $4,000 per month
- Furnace maintenance and servicing – $400
- Payroll and taxes – $7,500
- Marketing $150/month
Who is the target market?
Your clients will often consist of other funeral homes, who are using your facility and equipment. Many established funeral homes are not equipped for cremations on site and must turn to an outside service. In some cases, a crematorium will operate independently and will see customers directly.
How does a crematorium make money?
Cremation businesses make money off of each cremation they perform.
How much can you charge customers?
Prices will vary somewhat, depending on the amount of fuel used and any special circumstances. Typical costs for a cremation service range between $1,000 and $2,500.
How much profit can a crematorium make?
Currently, the cremation business is on the rise. It is estimated that it is a $3-$5 billion industry, and growing. Salaries for crematorium executives average around $60,000.
How can you make your business more profitable?
Because cremation renders the remains to ashes, numerous products or services have sprung up around this industry. Offer some of the services as alternative revenue sources.
- Wearable remains – The ashes are sealed into glass pendants, paperweights of commemorative bowls.
- Plantable remains – Ashes are used in the germination and growth of plant or tree seeds.
- Launch your ashes into space
- Create an artificial reef structure with the ashes.
- Carbon free cremation – The cremation process uses alkali hydrolysis to break down the body, instead of fire.
Want a more guided approach? Access TRUiC’s free Small Business Startup Guide – a step-by-step course for turning your business idea into reality. Get started today!
STEP 2: Form a legal entity
One crucial aspect that cannot be overlooked when starting your crematorium is the importance of establishing a solid business foundation. While sole proprietorships and partnerships are the most common entity types for small businesses, they’re a far less stable and advantageous option than LLCs.
This is because unincorporated business structures (i.e., sole proprietorships and partnerships) expose you as an owner to personal liability for your business’s debts and legal actions, while LLCs protect you by keeping your personal assets separate from your business’s liabilities.
In practice, this means that if your crematorium were to face a lawsuit or incur any debts, your savings, home, and other personal assets could not be used to cover these costs. On top of this, forming your business as an LLC also helps it to appear more legitimate and trustworthy.
More than 84% of our readers opt to collaborate with a professional LLC formation service to kickstart their venture. We’ve negotiated a tailored discount for our readers, bringing the total down to just $29.
Note: If you’re interested in more information before getting started, we recommend having a look at our state-specific How to Start an LLC guide (DIY) or our in-depth Best LLC Services review (for those opting for a professional service).
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It’s really easy and free!
You can acquire your EIN through the IRS website. If you would like to learn more about EINs, read our article, What is an EIN?
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company’s assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business’ expenses all in one place.
- Build your company’s credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a crematorium. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Certificate of Occupancy
A crematorium is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a crematorium.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your crematorium will be in compliance and able to obtain a CO.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers’ Compensation Coverage.
Find out what types of insurance your Crematorium needs and how much it will cost you by reading our guide Business Insurance for Crematorium.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a crematorium
Since much of your work takes place behind the scenes and out of sight, it is critical that you develop and network with funeral homes and funeral directors in your area. Develop a reputation as someone who takes their job seriously. Become involved with professional organizations and associations in your field. This will help you network and will keep you abreast of the latest trends and technology. This vested interest will convey your professionalism to those you regularly work with.
If you choose to specialize in pet cremations, become associated with veterinary offices and pet groomers around your area. Between word of mouth and business cross-referencing, customers will become aware of your services and reputation.
How to keep customers coming back
Few people find comfort in the passing of a loved one and you want to be as easy to work with as possible. It’s also necessary to understand the trends and business you’re a part of. No matter how you say it, there will always be customers for this business. How you retain business partners, and attract new clients, will often depend on your professionalism and reputation, which will determine your lasting success.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites – full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.
Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2024 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it’s fair pricing.
Is this Business Right For You?
A compassionate individual who is comfortable with the disposal of human remains would do best in this profession.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a crematorium?
A cremation business owner will fall into an established routine, with the occasional deviation in schedule.
Day-to-day activities will consist of:
- Scheduling cremation services
- Networking and communicating with funeral homes
- Marketing for your customer base
- Scheduling routine maintenance on building and equipment
- Researching your industry and emerging trends, equipment, and techniques
- Scheduling and training staff
- Handling various administrative duties
- Complying with safety procedures
What are some skills and experiences that will help you build a successful crematorium?
Compassion and strong communication skills, both with customers and other funeral service businesses is necessary. Being personable and professional in this business is also critical. Attention to detail and strong business acumen will also be an asset. For cremation certification, following industry trends, and ongoing enterprise support, the International Cemetery, Cremation, and Funeral Association and Cremation Association of North America offer significant resources.
What is the growth potential for a crematorium?
The crematorium industry is rapidly expanding and becoming increasingly profitable. Numerous families and individuals are making the choice to cremate, as opposed to the traditional funeral procedures and cost. Many pet owners are also choosing to cremate, which adds another facet to the industry.
Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
- Funding
- Events
- Guides
- Support
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a crematorium?
This industry is rapidly becoming a popular choice for entrepreneurs. Therefore, it’s important to consider the advice of those that have paved the path for you:
- Research the competition and saturation levels, in your region, prior to opening a business.
- Develop a relationship with the funeral home directors in your area. Networking is your greatest asset.
- Create a business plan before investing / finding investors and follow your plan. Carefully consider all of the costs associated with this kind of start-up.
- Talk with successful and established cremation owners you’re not in competition with. What worked for them?
How and when to build a team
You may not need a very large team for this business, especially initially. Over time, look for reliable and level-headed people to join your business. As with all employees, yours will represent your company and reputation. Persons with experience in the medical field or patient care are sometimes good fits, as they often have the right temperament.
Useful Links
Industry Opportunities
- Cremation Association of North America
- International Cemetery, Cremation, and Funeral Association
- Franchise opportunity for a pet cremation business