What Is a Funeral Home Worth? How Funeral Home Valuation Works

A funeral home is worth what a buyer can expect it to earn after the sale, plus the value of any real estate, less the risks the buyer finds in your records. Funeral home valuation starts with a multiple of adjusted earnings, and the multiple moves with call volume, cremation mix, preneed and staff. This guide shows what named brokers and public companies have published and lists the records a buyer will ask for. The guide is general information and not legal, tax or financial advice, and rules differ by state.

What is a funeral home worth?

A funeral home is worth the price a willing buyer will pay for its future earnings and its property. No published table can tell you that price, because a buyer has to check four things first.

• Earnings, after the owner’s personal expenses and one-time costs are taken out.
• Call volume, and whether the count is rising, flat or falling.
• Real estate, and whether the building is part of the sale.
• Records a buyer can trust, so each figure traces to a case, a contract or a deposit.

According to the National Funeral Directors Association, approximately 75% of United States funeral homes are family or privately owned. Carriage Services wrote in its 2025 annual report that independent businesses and privately owned consolidators account for 77% of funeral and cemetery revenue in the United States. More figures are in funeral industry statistics for 2026.

How do buyers value a funeral home?

Buyers value a funeral home on its earnings first, then check the answer against the assets and the real estate. Alan Creedy of Creedy & Co. wrote in August 2010 that buyers had moved from revenue-based rules to multiples of EBITDA.

Earnings: EBITDA and seller’s discretionary earnings

EBITDA is earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is EBITDA after one-time costs and the owner’s personal expenses are removed. Johnson Consulting Group says one-time and owner-related expenses get a detailed review in its valuations.

Seller’s discretionary earnings (SDE) is pre-tax profit plus the owner’s pay, interest, depreciation, amortization, and discretionary or one-time expenses. SDE shows everything the business provides to one working owner. 4BSF, a firm that advises on funeral home sales, says it anchors most valuations to SDE or EBITDA. Your own pay is the largest adjustment, so read what funeral home owners pay themselves first.

Revenue and per-call rules of thumb

A rule of thumb prices a firm from one number, such as revenue or calls per year. Alan Creedy wrote in August 2010 that the common rule before the 1990s was 1.7 to 1.9 times net revenue. Both rules mislead, because two firms with the same revenue or the same calls can keep very different amounts. 4BSF contrasts a small-town firm with 100 calls at $8,000 average revenue with a multi-location firm with 500 calls.

Asset value and real estate

Asset value is what the building, vehicles, equipment, inventory and receivables would bring if sold separately. Johnson Consulting Group says the method changes when the real estate is leased to the buyer instead of sold. NewBridge Group wrote in November 2023 that a vacant funeral home typically sells for 50% of the market value of an owner-occupied one.

Goodwill is the part of the price paid for reputation and returning families, above the physical assets. The Internal Revenue Service treats a lump-sum sale of a business as a sale of each asset. Ask your accountant how the allocation changes what you keep.

What EBITDA multiple do funeral homes sell for?

No single multiple exists, and the named sources that publish one do not agree. A valuation multiple is the figure that adjusted earnings are multiplied by to reach a price. The table sets four published statements side by side, and the oldest dates from 2010.

A worked example with an invented firm

The firm below is invented for illustration and is not a benchmark. The example firm has revenue of $1,200,000 and pays its owner $150,000. A hired manager would cost $100,000.

Adjusted EBITDA of $250,000 gives $1,000,000 to $1,625,000 at the Creedy & Co. range of 2010, $1,500,000 to $1,750,000 at the Johnson Consulting Group range of 2022, and $1,500,000 to $2,000,000 at The Foresight Companies range of 2024. The invented firm is priced from $1.0 million to $2.0 million, depending on whose figure you pick. These totals are this guide’s arithmetic, not an appraisal.

Johnson Consulting Group wrote its range for average to larger firms, so a small firm may fall below it. For the invented firm, the old revenue rule would give $2,040,000 to $2,280,000 and ignore earnings entirely.

What raises or lowers the value of a funeral home?

Value rises when future earnings look certain and falls when they depend on things a buyer cannot verify. The table lists seven factors and what you can do about each. Alan Creedy’s factors come from his October 2010 article.

The National Funeral Directors Association projects a 2025 cremation rate of 63.4%, reaching 82.3% by 2045. A buyer expects the shift in cremation mix and wants to see what your firm earns on a cremation case, the subject of growing revenue per case ethically.

The measures to watch each month are set out in funeral home KPIs for owners, and old balances in tracking accounts receivable by case.

Who buys funeral homes?

Four kinds of buyer purchase funeral homes: public consolidators, private groups, other local funeral homes, and employees or family. The Foresight Companies says it has helped owners sell to family members, key employees, regional and national acquirers, and new business owners.

Service Corporation International estimates its share of the North American market at approximately 18%, and says it looks for locations where it can benefit from economies of scale. NewBridge Group wrote of the 2025 market that the pool of buyers is narrowing and the strongest buyers are selective.

What records will a buyer ask for?

A buyer will ask for several years of financial statements and for the records that prove them. Due diligence is the buyer’s examination of your business between the letter of intent and the closing. 4BSF says to prepare the last three to five years of tax returns, balance sheets and profit and loss statements.

The financial, real estate, preneed, employee, litigation and inspection rows follow lists published by 4BSF and NewBridge Group. The Foresight Companies adds third-party inspections and inventory lists. The remaining rows answer the questions in the value table above.

Three guides help: the funeral home recordkeeping checklist, preneed recordkeeping, and what belongs in a digital case record. Books that reconcile to the case files are covered in what to automate in funeral home bookkeeping.

How do you sell a funeral home to an employee or family member?

You sell to an employee or a family member with the same valuation as any other sale and different financing. An independent valuation protects both sides: the successor knows the price is fair, and your other heirs can see how it was set.

Financing is where an inside sale differs. NewBridge Group notes that passing a firm to your children usually lacks the cash payout of an outside sale, and can trigger gift or estate taxes. The Small Business Administration (SBA) lists changes of ownership among the uses of its 7(a) loans, up to $5 million.

In an August 2024 article in Connecting Directors, Tim Bridgers, senior vice president of funeral lending at Live Oak Bank, wrote that an SBA loan can finance goodwill and real estate in one transaction, while conventional loans run 5 to 7 years. 4BSF notes that consolidators pay multiples that differ from what an independent buyer can finance with an SBA loan, so an inside buyer may not match the highest outside offer. The operating side is covered in funeral home succession planning.

How long does it take to get a funeral home ready to sell?

Preparing a funeral home for sale takes three to five years, so that the statements a buyer reads show your best work. The sale itself is shorter.

1. Five years out: get a first valuation. NewBridge Group says an owner who expects to exit within five years should start now. Johnson Consulting Group recommends a valuation every year.
2. Three years out: bring in advisors and clean the books. Tom Anderson wrote in Funeral Director Daily in July 2017 that it pays to hire a valuation advisor about three years before a sale. Move personal expenses out of the firm.
3. Two years out: build staff depth. Hand arrangements and services to licensed staff.
4. One year out: settle your pricing. NewBridge Group advises proper pricing at least one year before a sale.
5. Six months out: assemble the records. Work through the checklist above and reconcile the preneed book.
6. Listing to closing: 90 to 180 days. 4BSF gives that range, and says the buyer’s application for a new license or a transfer can take weeks or months.

How does buying a funeral home differ from starting one?

Buying a funeral home gives you families, staff and revenue on the first day, at a price that reflects them. Starting one means paying for a building, vehicles and licensing, and beginning with no call volume. The main risk for a buyer is paying for earnings that leave with the seller.

Arizona law says a funeral establishment license is not transferable, requires the new owner to apply within twenty days of a change of ownership, and allows an interim permit of up to forty-five days. Kansas law requires an application for a new license at least 30 days before ownership changes. The other route is set out in how to start a funeral home.

How FuneralHQ handles this

FuneralHQ is software for running cases, not a valuation service, a broker or an accountant, and it does not calculate EBITDA. What FuneralHQ keeps is the record behind the numbers a buyer tests. Reporting reads from live case records and shows case volume by month, quarter or year, burial and cremation mix, revenue, outstanding balances and payments collected, by location. Preneed keeps each contract with its selected services and merchandise until it converts to an at-need case. The page on what funeral home software does gives the general picture.

Card and ACH payments are recorded on the case, and FuneralHQ syncs with QuickBooks Online and QuickBooks Desktop. Records can be exported at any time, as described in exporting funeral home data. Trust and insurance statements still come from your trustee or insurer. If you plan to list within a few months, changing software will not raise the price. Organize the records you have instead.

Questions to ask a broker or appraiser

1. Do you represent the seller, the buyer, or both, and how are you paid?
2. Will you use EBITDA or SDE, and which add-backs will you accept?
3. What multiple are you applying, and which closed sales support it?
4. Is the real estate valued inside the multiple or separately?
5. How do you treat the preneed book and the receivables?
6. How many funeral homes of my size have you valued or sold in the past three years?
7. Who are the likely buyers, and how would an employee or family buyer finance the purchase?

Common questions about funeral home valuation

What is the difference between EBITDA and SDE?

EBITDA is earnings before interest, taxes, depreciation and amortization. Seller’s discretionary earnings adds the owner’s whole pay and personal expenses on top. Adjusted EBITDA assumes a manager is paid a market wage, so it is the lower figure. A multiple of one cannot be applied to the other.

Is my funeral home worth more with the real estate included?

The named sources say real estate moves the price. Johnson Consulting Group wrote in October 2022 that multiples run much higher for prized firms when real estate is included. Alan Creedy wrote in October 2010 that leasing the building to the buyer may have a material effect on price.

Do preneed contracts add value to a funeral home?

Advisors disagree. NewBridge Group names preneed among the drivers of value. Tom Anderson reported in Funeral Director Daily in 2017 that an unnamed podcast guest gave preneed no value, because contracts can move to a competitor, and Anderson disagreed. A buyer will verify the funding behind every contract.

How often should I get a funeral home valuation?

Johnson Consulting Group recommends a valuation every year and compares it to a yearly check-up. NewBridge Group says it performs about 75 to 100 valuations a year. A valuation done years before a sale gives you time to act on what it finds.

How long does a funeral home sale take once it is listed?

4BSF gives a range of 90 to 180 days from listing to closing. The Foresight Companies describes five phases that often overlap: valuation, marketing, a letter of intent, due diligence with the purchase agreement, and closing. Records assembled in advance remove the delay a seller controls.

Does the funeral home license transfer to the buyer?

The answer depends on the state. Arizona law says a funeral establishment license is not transferable, and the new owner must apply within twenty days of the change. Kansas law requires an application for a new license at least 30 days before ownership changes. Ask your state board early.

Can an employee get a loan to buy a funeral home?

An employee can apply for one. The Small Business Administration lists changes of ownership, complete or partial, among the approved uses of a 7(a) loan, with a maximum of $5 million. A lender will want the same financial statements a buyer would ask for.

Will a buyer ask me to sign a non-compete agreement?

A buyer is likely to ask. 4BSF writes that non-compete agreements in funeral home sales commonly run three to five years and cover a defined area. Alan Creedy wrote in October 2010 that strong management that will not sign a non-compete agreement lowers value. Have your attorney review the wording.