How to Start a Funeral Home in 2026: Licenses, Costs, and the First 90 Days

To start a funeral home, you need a state license for the building, a licensed funeral director in charge of it, price lists that meet the FTC Funeral Rule, and enough money to carry the firm until cases arrive. The order matters: state board first, then the building, then the lender. This guide on how to start a funeral home reports what regulators publish. It is general information and not legal, tax or financial advice, and rules differ by state.

What does it take to start a funeral home?

Starting a funeral home takes six things: a licensed location, licensed people, compliant price lists, workplace safety programs, local zoning approval, and financing. A state board sets the first two, the FTC and OSHA set the next two, your city or county sets the fifth, and a lender decides the sixth.

The National Funeral Directors Association (NFDA) counts 15,401 funeral homes in the United States on its statistics page, read in September 2026, and says about 75% are family or privately owned. The wider picture is in funeral industry statistics for 2026.

Do you need a license to own a funeral home?

The business needs a license in all three states read for this article, and the owner does not always need one personally. A funeral establishment license is a state license issued to the place of business. A funeral director or embalmer license is a personal license issued to an individual.

California’s Cemetery and Funeral Bureau says in its FAQ that a person can own a funeral establishment and employ a licensed funeral director to manage it. Texas Occupations Code section 651.351 says the chapter does not require a licensed owner. Both states still require a licensed funeral director to run the establishment. For one state at a time, with the section numbers, see the state guides to funeral home laws and licensing.

Texas also requires a display of at least five adult caskets, and its application guidelines ask for your General Price List and other price lists with the application. Florida’s division licenses funeral directors, embalmers, direct disposers and preneed sales agents separately. The commission’s posted fee schedule, effective September 1, 2019, shows the same $462, so confirm the fee before you pay. Read your own board’s page, because no figure carries across a state line.

Should you build, buy, or lease a funeral home?

Buy an existing funeral home if you want families and staff on the first day, start in your own building if you want your own name, and consider a cremation or storefront model if capital is the limit.

The SBA says an existing business comes with an established customer base, defined operating expenses and trained employees. The SBA’s due diligence list includes licenses and permits to transfer, zoning, and contracts and leases. The Texas commission’s page on ownership changes says all past and current complaint penalties stay due regardless of ownership.

Funeral home valuation covers how a purchase price is reached. Succession planning for funeral home owners shows what a prepared seller’s records look like.

The cremation model follows demand. The Cremation Association of North America (CANA) reports a 2025 US cremation rate of 62.8% and projects 69.1% by 2030. NFDA reports that 61.4% of consumers in 2025 were interested in exploring green funeral options, a second niche covered in green and natural burial.

How much does it cost to start a funeral home?

No regulator or trade association page read for this article publishes a total cost to start a funeral home, so this guide does not give one. The honest figure is the sum of written quotes for your building, in your state.

Working capital is the row a quote cannot settle. Working capital includes your own pay, which funeral home owner salary covers, and it has to last until case volume covers fixed costs. The break-even example below shows how to size it.

How do funeral homes get financed?

Two federal loan programs fit a funeral home purchase or startup. An SBA 7(a) loan is a loan from a lender that the Small Business Administration partly guarantees. An SBA 504 loan is long-term, fixed-rate financing for major fixed assets, made through a Certified Development Company.

The SBA says a 7(a) borrower must operate for profit, be creditworthy, and be unable to get the credit on reasonable terms elsewhere. The SBA guarantees up to 85% of a 7(a) loan of $150,000 or less and up to 75% of a larger one. A 504 loan cannot pay for working capital or inventory, so a firm that uses one for the building needs another source for payroll and merchandise.

What federal rules apply from day one?

Two federal agencies reach a new funeral home before its first case: the Federal Trade Commission through the Funeral Rule, and OSHA through two workplace standards.

The FTC Funeral Rule

A General Price List is the printed list of the goods and services a funeral provider sells, with the price of each. The FTC’s guide says you must give the list, to keep, to anyone who asks in person about funeral goods, services or prices.

• Contents. Your name, address and phone number, an effective date, six required disclosures, and 16 specified items with a price for each.
• Casket and outer burial container price lists. Shown before you show the items.
• Itemized statement. Given at the end of the arrangements discussion, with each item, its price and the total.
• Phone calls. Callers who ask about prices get accurate answers, with no name required first.
• Records. Price lists and statements are kept for at least one year.

The FTC’s guide states a penalty of up to $53,088 per violation. The working detail is in FTC Funeral Rule basics and General Price List management.

OSHA: bloodborne pathogens and formaldehyde

OSHA’s bloodborne pathogens standard, 29 CFR 1910.1030, applies to all occupational exposure to blood or other potentially infectious materials. OSHA’s formaldehyde standard, 29 CFR 1910.1048, applies to all occupational exposures to formaldehyde. Each standard places duties on the employer.

What goes in a funeral home business plan?

A funeral home business plan holds the sections the SBA lists for a traditional plan, plus the case volume and price assumptions behind your revenue. The SBA’s sections include a market analysis, a funding request and financial projections.

The SBA says the funding request should explain how much funding you need over the next five years. The projections cover five years, with quarterly or monthly figures for the first.

Dividing NFDA’s revenue figure by its count of funeral homes gives about $1.06 million per funeral home. That average across firms of every size and age is this article’s own arithmetic, not an NFDA figure and not a forecast for a first year. Your plan needs deaths per year in your county, the firms already serving those families, and your own price list.

A break-even example

Break-even volume is the number of cases a year at which revenue covers fixed costs. The figures below are placeholders that show the arithmetic, not typical costs.

1. Fixed costs for the year: $300,000.
2. Average revenue per case: $6,000, from your own price list.
3. Direct cost per case: $2,000 for merchandise and crematory fees.
4. Margin per case: $4,000.
5. Break-even: $300,000 divided by $4,000 is 75 cases a year.

Suppose your research supports 40 cases in the first year. The plan is then 35 cases short, which at $4,000 a case is $140,000 that working capital must cover.

What do you need to run the first case?

You need five things working on opening day: answered phones, a first call process, price lists, a document packet, and a way to take payment. A first call is the first contact reporting a death, and it can come at any hour in your first week.

• Phones. Decide who answers at 3 AM. Choosing a funeral home phone system compares the options.
• First call process. One sheet with the caller, the callback number, the name and the location.
• Price lists. Printed and dated.
• Document packet. Authorizations and the itemized statement, ready to sign.
• Payment. A way to take a card or bank payment and record it against the case.

Software is optional at very low volume. Paper forms, a spreadsheet and a forwarded phone can carry the first cases, and free funeral home software explains where free tools stop. A live answering service is the better choice if you want a person on every night call. Your first funeral home software explains what to look for.

What should you do in the first 90 days?

Work in the order below, because each step depends on the one before. The 90 days count your own working time. The license arrives when your state board and its inspectors are satisfied.

1. Days 1 to 10. Read your state board’s licensing pages and call its licensing unit.
2. Days 1 to 10. Choose the route: buy, build, or a cremation model.
3. Days 10 to 30. Confirm zoning for funeral use before you sign a lease.
4. Days 10 to 30. Name your funeral director in charge.
5. Days 10 to 30. Collect a quote for every row of the cost checklist.
6. Days 30 to 45. Write the business plan and take it to a lender.
7. Days 30 to 60. Write the price lists and have them reviewed.
8. Days 45 to 75. Write the OSHA programs and train every employee.
9. Days 45 to 75. File the establishment application.
10. Days 60 to 90. Set up phones, the first call sheet, documents and payments, then run a practice case.

What happens in week one of a software implementation shows the software part of the last step.

How FuneralHQ handles this

FuneralHQ is case software for independent funeral homes. One case record runs from first call to final payment: first call intake, tasks, documents, unlimited e-signatures, family text and email, card and ACH payments, preneed, and sync with QuickBooks Online and QuickBooks Desktop. The General Price List is kept once, and the Statement of Funeral Goods and Services is built from the same line items. AI phone answering is optional and stays off until you switch it on. The assistant leaves a draft first call sheet that a person reviews and confirms. To see the steps in order, read how funeral home software runs a case.

FuneralHQ is not the right choice if you want software that files with your state’s electronic death registration system, or if you need Spanish documents or Spanish family pages, which are not offered. FuneralHQ comes in three packages, Platform, Growth, and Growth Managed: see pricing.

What should you ask your state board, lender, and vendors?

Ask these eight questions before you sign anything.

1. State board: must the owner hold a personal license?
2. State board: may the preparation room or refrigeration be at another licensed location?
3. State board: which inspections come before the license, and how long do they take?
4. State board: does selling preneed need a separate license?
5. Lender: which SBA program fits, and what share of the cost must come from me?
6. Lender: what support do you want for each figure in the projections?
7. Vendors: what is the total first-year cost, including setup?
8. Vendors: can I export my data if I leave?

Common questions about starting a funeral home

Can one funeral director be in charge of two locations?

The answer depends on the state. The Texas commission’s appointment form says a person may not serve as funeral director in charge at multiple locations unless the locations are within 100 miles of each other and share the same ownership. California’s bureau may allow one director to manage nearby establishments.

Do you need an embalming room to open a funeral home?

State rules differ. California’s bureau lets an establishment share a preparation room by contract. The Texas commission describes an exemption for an establishment within 50 miles of a second one under common ownership where embalming takes place. Florida requires an establishment to maintain, or arrange for, a preparation room.

Does a funeral home have to post prices online?

The FTC’s current Funeral Rule does not require online prices. The FTC announced an advance notice of proposed rulemaking on access to funeral prices online on October 20, 2022 and held a workshop on September 7, 2023, and its Funeral Rule page shows no amended rule. Your state may have its own rule, so ask your board.

Can an SBA loan be used to buy an existing funeral home?

The SBA lists changes of ownership, complete or partial, among the uses of a 7(a) loan, and the maximum 7(a) loan is $5 million. Whether your purchase qualifies is a decision for the lender. The SBA says the business must be creditworthy and show a reasonable ability to repay.

Does a funeral home have to display caskets?

Casket display is set by state law. Texas Occupations Code section 651.351 requires at least five adult caskets, two of them full-size and displayed in a showroom. The other three may be shown by video, brochure or online. The California and Florida pages read for this article state no count.

What is a funeral director in charge?

A funeral director in charge is the licensed funeral director a state holds responsible for an establishment. The Texas commission says the funeral director in charge is responsible for compliance with mortuary, health and vital statistics laws. Florida’s statute requires every licensed funeral establishment to have one.

Can you open a cremation-only business instead of a full funeral home?

Some states license a cremation business separately. Florida’s division lists a direct disposal establishment as a license type apart from a funeral establishment. The FTC’s Funeral Rule still applies to any business that sells or offers both funeral goods and funeral services to the public.

Do you need funeral home software before you open?

No. A firm with a few cases a month can open with paper forms, a spreadsheet and a dependable phone arrangement. Software earns its cost when retyping the same names into the statement, the documents and the invoice starts to cause errors.