Starting a mortuary business is a rewarding venture that combines compassion and attention to detail with business savvy. The industry generates tens of billions of dollars annually, driven by a steady demand for funeral and memorial services across diverse communities.
This guide will take you through the practical steps of obtaining necessary licenses, securing funding, selecting the right location, and acquiring equipment to help you launch a successful mortuary business in the U.S.
Step 1: Create your business plan and validate your idea
Define your market and services
First, you need to understand the community you plan to serve. Use U.S. Census Bureau data to analyze local demographics, paying close attention to age groups, religious affiliations, and cultural backgrounds. This information directly influences the types of services that will be in demand.
Next, look at your competition. Identify at least three other funeral homes in your area using the National Funeral Directors Association (NFDA) directory. Review their websites and, most importantly, their General Price Lists (GPLs) to understand their offerings and pricing structure.
A frequent misstep is to assume what the community wants. For instance, you might invest heavily in traditional burial caskets when the local preference is shifting toward cremation. Solid research prevents you from offering services that do not match local needs.
Calculate your startup costs
With your market research complete, you can build a realistic budget. Startup costs for a mortuary often range from $400,000 to over $1.5 million. The largest variable is almost always the facility itself, whether you choose to buy or lease.
Beyond the property, you will need to account for several key expenses. Here is a typical breakdown to get you started:
- Facility Purchase/Lease: $250,000 to $1 million+ to buy
- Embalming & Prep Room Equipment: $30,000 - $60,000
- Vehicles (Hearse & First-Call Car): $110,000 - $200,000
- Initial Casket & Urn Inventory: $15,000 - $25,000
- Licensing & Legal Fees: $5,000 - $10,000
Here are 4 immediate steps to take:
- Research demographic data for your target area from the U.S. Census Bureau.
- Obtain and compare the General Price Lists from at least three local competitors.
- Create a detailed budget spreadsheet that lists potential startup costs.
- Draft an initial business plan that outlines your proposed services and target market.
Step 2: Secure your legal structure and licenses
First, choose your business structure. An LLC is often a practical choice for a new mortuary. It separates your personal assets from business debts and offers pass-through taxation, which avoids the double taxation found in C Corporations.
Navigate federal and state regulations
Your business will answer to the Federal Trade Commission (FTC), which enforces the Funeral Rule. This rule mandates transparent pricing and consumer rights. You must provide a General Price List (GPL) to anyone who asks. Failure to comply brings heavy fines.
Most licensing, however, happens at the state level through a Board of Funeral Directors or a similar agency. You will need a Funeral Establishment License, which can cost between $300 and $1,000 and take 60-90 days for approval.
You will also need a licensed Funeral Director in Charge. A frequent misstep is not knowing your state's specific rules. Some states require the licensed director to also be the majority owner of the business, so confirm this requirement early on.
Here are 4 immediate steps to take:
- Select and register your business structure, such as an LLC, with your state.
- Contact your state's funeral service board for a complete license application packet.
- Download and review the FTC's "Complying with the Funeral Rule" guide.
- Identify a licensed Funeral Director who can act as your designated manager if needed.
Step 3: Secure your insurance and manage risk
Choose the right coverage
Your insurance needs are specific. You will need a package that includes general liability, commercial property for your facility, and commercial auto for your hearse and first-call car. These policies protect against common business accidents and property damage.
The most important policy is professional liability, also known as malpractice insurance. A general policy will not cover claims from embalming errors or mishandling of remains. You should look for coverage of at least $1 million to protect your business from these unique risks.
Expect to budget between $7,000 and $15,000 annually for a comprehensive package. If you hire staff, you will also need workers' compensation insurance, as required by your state. This protects your team and your business from workplace injuries.
Work with an agent who understands the funeral industry. Providers like Federated Insurance, Funeral Directors Life, or The Cincinnati Insurance Companies specialize in this field. A generalist agent may not grasp the specific liabilities you face, leaving you with costly coverage gaps.
Here are 4 immediate steps to take:
- Request quotes for a full insurance package from at least two specialized providers.
- Confirm your professional liability policy covers specific mortuary risks.
- Budget for annual premiums as part of your financial plan.
- Get a quote for workers' compensation if you plan to hire employees.
Step 4: Select your location and buy equipment
Your facility needs to be in an area zoned for commercial use, often requiring a special use permit. Plan for 3,000 to 6,000 square feet to fit a chapel, viewing rooms, offices, and a preparation room. Many new owners overlook the need for ample, accessible parking.
When you negotiate a lease, aim for a long-term agreement of five to ten years. You must secure the landlord’s written permission for facility modifications, especially for the ventilation and plumbing required in the preparation room. Get this approval before you sign any documents.
Stock your facility
With a location secured, you can purchase your equipment. Your budget will guide whether you buy new or used, but some items are foundational. Here are some typical price ranges to expect for major purchases:
- Embalming Table: $4,000 - $8,000
- Body Lift: $3,000 - $6,000
- Mortuary Refrigeration (2-body): $5,000 - $15,000
- First-Call Vehicle (Used): $30,000 - $50,000
For supplies like embalming fluid and cosmetics, you will work with industry-specific distributors such as Pierce Chemical or The Dodge Company. They typically sell products by the case, so you cannot purchase single items. Plan your initial inventory order accordingly.
Here are 4 immediate steps to take:
- Research local zoning ordinances for funeral homes in your target area.
- Identify three potential properties that meet space and parking requirements.
- Create a detailed equipment list with projected costs for new and used options.
- Request catalogs and price lists from two mortuary supply companies.
Step 5: Set up your payment processing
Most funeral homes require a 50% deposit before services are rendered, with the balance due before the service date. You will accept payments through credit cards, checks, and insurance assignments. A signed contract that outlines all costs and terms is non-negotiable for every family you serve.
When you select a payment processor, look at the fees. Many providers charge between 2.5% and 3.5% per transaction, which adds up on large funeral bills. Some business owners forget to account for these fees in their pricing, which can eat into profits unexpectedly.
For mortuary businesses that need to accept payments on-site or on-the-go, JIM offers a streamlined solution. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone. Just tap and you are done.
At just 1.99% per transaction with no hidden costs or extra hardware, it is particularly useful for taking deposits at a family's home during an arrangement conference. This rate is significantly lower than what many other payment solutions offer.
- Get Started: Download the JIM app for iOS.
- Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
- Access Funds: Your money is available right on your JIM card as soon as the sale is done. No waiting for bank transfers.
Here are 3 immediate steps to take:
- Draft your payment policy, including deposit requirements and final payment deadlines.
- Compare at least two payment processing solutions, paying close attention to transaction fees.
- Download the JIM app to see how it works for mobile payments.
Step 6: Secure your funding and manage finances
You will likely need a significant loan. The SBA 7(a) loan program is a popular route. Lenders typically offer up to $5 million and require a down payment of 10-20%. You will need a credit score above 680 and a detailed business plan to qualify.
You might also consider lenders who specialize in the funeral industry, such as Live Oak Bank. They understand the unique cash flow and asset structure of a mortuary. This can make the approval process smoother than with a general commercial bank.
Plan your working capital
Many new owners focus on facility and vehicle costs but underestimate operating expenses. You should have at least six months of working capital set aside. This fund covers payroll, insurance, and supplies before your revenue stream is steady. A safe figure is between $75,000 and $150,000.
Here are 4 immediate steps to take:
- Contact an SBA-preferred lender to discuss the 7(a) loan program.
- Request information from a specialized lender like Live Oak Bank.
- Calculate your estimated operating expenses for the first six months.
- Refine the financial projections in your business plan for your loan application.
Step 7: Hire your team and set up operations
Define your key roles
Your first hire is typically a licensed Funeral Director. This person manages family arrangements and oversees operations. Expect a salary between $55,000 and $75,000. They must hold a state license and a degree in mortuary science.
You will also need a licensed Embalmer, who often is the same person as the director. If hired separately, their salary ranges from $45,000 to $60,000. For support, consider a part-time Funeral Attendant to assist with services and transfers.
Streamline your daily workflow
As a benchmark, plan for one full-time staff member for every 40-50 cases annually. This ratio helps you scale your team as the business grows. Trying to handle too many cases with a skeleton crew is a quick path to burnout and service errors.
To manage case files and scheduling, you might look at funeral home management software like Passare or SRS Computing. These platforms centralize documents and communications, which is far more reliable than using spreadsheets as your business expands.
Here are 4 immediate steps to take:
- Draft job descriptions for a Funeral Director and a part-time Funeral Attendant.
- Confirm your state's specific licensing requirements for funeral directors and embalmers.
- Request a demo from a management software provider like Passare.
- Calculate your initial annual payroll based on projected salaries and case volume.
Step 8: Market your business and attract families
Establish your digital foundation
Your website is your digital front door. It must be professional, compassionate, and easy to navigate. Make sure it includes your service descriptions, staff biographies, and a downloadable General Price List (GPL) to build trust through transparency.
Next, claim and fully complete your Google Business Profile. This is how most families will find you in an immediate-need situation. It can take three to six months for local search efforts to show consistent results, so start this process early.
Build community relationships
Beyond your website, your physical presence in the community matters. Your best referrals will come from relationships. Introduce yourself to local clergy, hospice care providers, estate planning attorneys, and nursing home administrators. They are trusted advisors to families.
A frequent misstep is to avoid marketing altogether out of fear of appearing insensitive. Instead, focus on education. You might host free seminars on the benefits of pre-planning or create helpful guides on how to write an obituary. This positions you as a resource.
Here are 4 immediate steps to take:
- Create a website that includes your downloadable General Price List.
- Claim and complete your Google Business Profile with high-quality photos.
- Draft an introductory letter for local clergy and hospice centers.
- Outline a topic for a free community seminar on pre-planning.
Step 9: Set your pricing strategy
Define your pricing model
Your pricing must be transparent and follow the FTC's Funeral Rule. This means you need a General Price List (GPL) that itemizes every service and product. From there, you can create packages to simplify decisions for families during a difficult time.
Consider offering three main service packages. For example, a "Direct Cremation" package, a "Cremation with Memorial Service" package, and a "Traditional Funeral" package. This tiered approach helps families find an option that fits their budget and wishes without feeling overwhelmed by individual line items.
Calculate your markups and fees
Merchandise is a major revenue source. A standard markup for caskets and urns is between 2.5 and 3 times the wholesale cost. If you buy a casket for $800, you might price it at $2,000 to $2,400 on your GPL.
Your Basic Services Fee is another key component. This non-declinable fee covers your professional services and overhead. It typically ranges from $2,000 to $4,000. A mistake many new owners make is setting this fee too low, which can cripple profitability from the start.
Here are 4 immediate steps to take:
- Draft your complete General Price List (GPL) with itemized costs.
- Create three service packages at different price points.
- Set your merchandise markup at 2.5x the wholesale cost as a starting point.
- Calculate your Basic Services Fee to cover at least 60% of your fixed overhead.
Step 10: Maintain quality and scale your operations
Once your business is running, your focus shifts to consistency and growth. For professional development, you can pursue the Certified Funeral Service Practitioner (CFSP) designation from the Academy of Professional Funeral Service Practice. This signals a high commitment to your field.
Measure performance and plan for growth
To measure service quality, send a simple survey to families after the service. You should aim for a satisfaction rate above 90%. This feedback provides direct insight into what you are doing well and where you can improve.
Use the benchmark of one full-time staff member for every 40-50 cases per year to guide hiring. As you approach 80 cases annually, it is time to bring on another licensed professional to maintain service quality without burning out your team.
Many owners expand too quickly. Before you invest in a second location or an on-site crematory, ensure your case volume is stable above 150 cases annually. You should also have at least four months of operating capital set aside for the expansion.
Here are 4 immediate steps to take:
- Review the requirements for the Certified Funeral Service Practitioner (CFSP) designation.
- Create a short post-service survey to send to families.
- Analyze your current case volume against the 40-50 cases per staff member benchmark.
- Schedule a demo with a management software provider like Passare if you plan to hire soon.
You have the steps to build your mortuary. Remember that success here balances business details with genuine compassion for the families you serve. With a solid plan, you are well-equipped to begin this meaningful work and create a lasting community presence.
Speaking of details, getting paid should be straightforward. JIM turns your smartphone into a card reader to accept payments anywhere for a flat 1.99% fee, no extra hardware needed. Download JIM to handle transactions with ease.
