Both for oneself and for a deceased loved one, cremation is becoming more and more popular. Americans’ propensity to choose cremation rose markedly between 2015 and 2020, and the cremation market grew by 25% during that time. In the upcoming years, that growth rate is predicted to rise. Even if it’s not the most enjoyable job, running a cremation company can be lucrative and offers a useful service.
However, you must be familiar with the entrepreneurial process if you plan to open a crematorium. Fortunately, everything you need to know is laid out in this step-by-step manual so you can start along the path to success.
Step 1: Find Out if this is the Right Business for You?
Positives Vs Negatives
| Complete final wishes – Assist folks in leaving in the manner they like. Cost of cremation services is approximately $2,000. Market Growth – The cremation business is anticipated to expand more. | Not the most enjoyable line of business, morbid High Startup Costs: Up to $150,000 for a business |
Industry Trends
- Industry size and past development: The US cremation services sector is expected to reach $2.3 billion in value in 2022, following five years of 3.1% annual growth.
- Estimate for growth: In 2022, it is expected that the US cremation services market would expand by 3%.
- Number of enterprises: 13.333 cremation services businesses were in operation in the US as of 2020, according to statistics.
- Number of employees: In the US cremation services sector, 16,244 persons were employed in 2022.
Cost of Starting Crematorium
For roughly $140,000 to $165,000, you can establish a crematorium. The cremation furnace, which costs the most, can be purchased for roughly $135,000 with cremation instruction included. Instead, if you open a pet incinerator, your expenses will be far less, but your income will also be smaller.
Investment Items:
- Burning chamber
- Fuel for a fireplace
- Equipment that processes cremains
Is Crematorium Profitable?
Cremations usually cost $2,000 on average. You should aim for a 30% profit margin after expenses.
If you perform two cremations every week in your first year or two of business, your annual revenue will be $208,000. Using the 30% margin as an assumption, this would result in a profit of $62,000. The quantity might rise to four cremations each week as your company grows. You’d bring in a handsome $125,000 profit on your $416,000 in annual income.
Entry Barriers
- A cremation furnace’s high initial investment costs
- Death houses are a source of competition
Step 2: Create a Strategy
Identify a Gap
Examine the services, costs, and client feedback of crematoriums in your neighborhood and abroad. Finding a market gap to fill is what you’re after. For instance, it’s possible that there isn’t a pet crematory or a crematory that provides cremations without the use of carbon in the neighborhood.
Your word-of-mouth advertising may pick up steam as a result, drawing customers in immediately.
Solutions
- It’s pretty simple to use your services. You can offer both human and animal cremations. However, you would need a different site. You may also provide funeral services. Additionally, you can market urns and items made of wearable ash, such lockets.
Pricing
Cremation costs approximately $2,000 on average. To make sure you’re competitive, check the rates in your neighborhood. You should strive for a profit margin of roughly 30% after expenses like fuel, rent, and labor.
To calculate your markup and final price points after knowing your costs, utilize this Step By Step Profit Margin Calculator. Keep in mind that the prices you use at launch should be flexible and subject to adjustment as the market demands.
Target Market
People who are planning funerals, whether in advance or right away, will be your target market. You can probably discover them on Facebook because they tend to be more established individuals.
Location
For your crematorium, you must locate an industrial building. Sites like Craigslist, Crexi, and Instant Offices are good places to look for rental opportunities for commercial space in your area.
These general guidelines may be helpful to remember while selecting a commercial space:
- Central site that is reachable via public transportation
- Large, well-ventilated, and well-lit
- As your firm expands, you can extend your flexible lease.
- Unrequited big repairs or renovations, ready to use space
Step 3: Write a Business Plan
A plan is important for any business. This will help you guide your new business through the launch process and keep your eye on your main goals. A business plan also helps possible partners and investors understand your business and its goals better:
- Executive Summary: A brief outline of the whole business plan that should be written after the plan is done.
- Business Overview: A summary of the company’s goals, vision, purpose, assets, and control structure.
- What we make and what we do: Explain in detail what you’re selling.
- Do a SWOT analysis and look at market trends like changes in demand and growth opportunities.
- Competitive Analysis: Look at your key rivals’ strengths and flaws and make a list of what makes your services better.
- Sales and Marketing: Look at the unique selling points (USPs) of your business and come up with sales, marketing, and promotion plans.
- Management Team: An overview of the team’s tasks and professional backgrounds, as well as a business structure.
- Operations Plan: Your company’s operational plan includes how it will get supplies, where it will put its office, what its most important assets and tools are, and other practical details.
- Financial Plan: A three-year plan for money, including start-up costs, a break-even analysis, predictions of profits and losses, cash flow, and a balance sheet.
- Appendix: Add any other papers related to money or business.
Step 3: Create a Marketing Plan
Some of your business will come from passersby or people who find you online, but you should still spend money on marketing! Getting the word out is especially important for new businesses because it will bring in more customers and make people more aware of the brand.
Link your website to your social media accounts once your site is up and running. Social media is a great way to market your business because you can make posts that are interesting and sell your goods.
- Facebook is a great place for paid ads because it lets you target specific groups, such as guys under 50 in the Cleveland area.
- Instagram: Same perks as Facebook, but it’s for a different crowd.
- Website: Search engine optimization (SEO) will help your website show up higher in appropriate search results, which is a key part of making more sales. Make sure your website has clear calls to action. Try changing the size, color, and placement of calls to action like “Book Now” This could bring in a lot more customers.
- Google and Yelp: Getting mentioned on Yelp and Google My Business can be very important for getting people to know about your business and buying from you.
- Sales made in person – Present your products to funeral establishments without a cremation service.
- Create a blog – Publish regularly. Share on many sites while varying your material.
- Seek out referrals – To encourage consumer referrals of new clients, consider offering incentives.
- Paid ads on social media – Choose platforms that will allow you to reach your target market and run targeted social media marketing.
- Pay-per-click advertising – Boost your search engine ranking with Google AdWords. Initial keyword research is required.
- Testimonials – Share client endorsements of your cremation services to illustrate how they benefited your clients.