Researching the funeral home business? Make forecasts based on total market size, serviceable clients, and profitability timeline. With customizable options for expenses, growth rates, and service volumes, you’ll see find out how many funerals you’ll need to conduct every month to break even or scale operations.
Funeral Home Business Financial Calculator
Business Information
Startup Costs
Revenue Projections
Market Analysis
Operational Costs
How to use this calculator
Here’s how to complete the inputs in this calculator. I’ve also provided citations on where I sourced some default values for this tool so you have confidence in the results. But always make sure to conduct your own research and consult with a licensed professional before investing or starting any business. This tool should only for educational purposes.
Add Startup Costs
Enter the following one-time costs:
- Facility Setup Costs (building purchase/renovation). This field is set to $450,000 by default, but the number could be much higher if you decide to purchase land and building.
- Licensing Fees (permits and certifications). According to Funeral Mavericks, the ball-park cost for a business permit, zoning permit, and director’s license will be around $500 total.
- Initial Marketing Costs (grand opening, branding)
- Initial Stock Costs (caskets, urns, supplies)
Add Revenue Projections
Input your expected:
- Number of burial funerals per month. The average funeral home in the US completes about 179 funerals per year. This works out to 14.91 funerals per month. The default setting is 14 funerals per month for this reason.
- Average revenue per burial funeral. The median cost of a viewing and burial is $8,300 and set as the default value in this tool.
- Number of cremation funerals per month. According to the National Funeral Directors Association, the cremation rate is 61.9% with that number expected to climb in the coming years.
- Average revenue per cremation funeral. The typical cost for a cremation is $2,000 – $10,000 depending on location. I went with a higher-end estimate for the default setting.
- Monthly ancillary revenue (flowers, memorials, etc.)
- Annual growth rate percentage
- Annual net-profit goal
A little funeral home meme to lighten the mood.
Important: Keep in mind that while the funeral home industry is valued at $18 billion in the United States that doesn’t mean all funeral homes will succeed. In fact, 58% of all funeral homes serve fewer than 150 cases per year. The number of funeral homes has declined the last 10 years so location is extremely important when opening this business.
Add Market Analysis
Use the sliders to set:
- Service Area Population. You can take the population of your town or use a 10-mile radius to determine the population of your market.
- Death Rate Percentage (default is 0.7988% based on the US average in 2022 as reported by the National Vital Statistics System.)
- Projected Market Share. I selected 30% for the default. This field will determine the number of deaths that become customers.
Reading the obits section for market research.
Add Operational Costs
Enter your monthly expenses: Staffing Costs, Loan/Rent/Mortgage, Maintenance Costs, Insurance, Utilities, Marketing Budget, Transportation Costs. You can also add custom expenses as needed to make this section more accurate.
Then click the “Calculate Financial Projections” button to get the results. You can download your data with a CSV file or print and save the results.
Understanding the Results
Revenue Calculations:
Monthly Revenue = (Burial Funerals × Revenue per Burial)
+ (Cremation Funerals × Revenue per Cremation)
+ Ancillary Revenue
Market Size Calculations:
Total Market Size = Service Area Population × (Death Rate ÷ 100)
Serviceable Market = Total Market Size × (Market Share ÷ 100)
Profitability Calculations:
Monthly Net Profit = Monthly Revenue - Monthly Operational Costs
Annual Net Profit = Monthly Net Profit × 12
After-Tax Profit = Annual Net Profit × (1 - 0.30) // Assuming 30% tax rate
ROI and Payback Period:
ROI = ((Cumulative Profit + Total Startup Costs) ÷ Total Startup Costs × 100) - 100
Payback Period = Total Startup Costs ÷ Monthly Net Profit
By carefully inputting accurate data and regularly updating projections, you can make informed decisions about your business’s financial future. Remember that while these calculations provide insights, professional financial advice and local market research will help you understand the nuances of this business opportunity.
The Math of Funeral Care
In a candid interview with entrepreneur Jonathan Jay, funeral home owner turned business coach James Gardner dropped some serious knowledge about the business of death care. While discussing his journey from washing hearses at 14 to owning multiple funeral homes, Gardner revealed key metrics behind operating a successful funeral care business that were used to help shape this tool.
The Recession-Proof Revenue Factor
“I wanted to get into a sector that was recession-proof… there’s two things certain in life which is death and taxes,” said Gardner. This fundamental observation directly connects to the calculator’s Market Analysis section, which uses death rate percentages (defaulted to 0.7988%) against service area population to calculate potential market size.
The calculator’s approach to computing serviceable market size (population × death rate × market share) helps you determine market opportunity that’s less impacted by the larger economy. When you’re adjusting numbers into the market analysis sliders, you’re not just playing with percentages – you’re mapping out what Gardner calls “certain” revenue potential in your area.
The Multi-Service Revenue Model
The calculator’s separation of burial versus cremation services isn’t arbitrary. When Gardner discusses his acquisition targets, he focuses on businesses with multiple revenue streams. The calculator’s distinct inputs for “Number of Burial Funerals per Month” and “Number of Cremation Funerals per Month” reflect the importance of diversifying services, allowing for precise modeling of what Gardner calls “predictable revenue streams.”
The calculator’s built-in formula:
Monthly Revenue = (Burial Funerals × Revenue per Burial) +
(Cremation Funerals × Revenue per Cremation) +
Ancillary Revenue
The calculator also allows you to add “Ancillary” revenue sources that could provide a variety of add-on revenue from things like floral arrangements, memorial cards and printing, video and montage creation, reception services, grief counseling, or live streaming of services for remote attendees.
Related tools:
Market Demand Calculator: Conduct further research and determine if there’s sufficient demand for this service in your area. With the number of funeral homes declining nationally, market research is critical for this business model.
About the Author: Brett Lindenberg
