Looking for a funeral home business plan? You're in the right place.
A funeral home has to answer questions that a lender, a landlord or a licensing board will ask about a business most people have never run. How many calls a year does it take to cover the building? What share of families choose cremation, and what does that do to revenue per call? How is pre-need money held, and what does the home owe on it? A blank template won't show what a workable answer looks like.
This article walks through a complete sample plan for a funeral home in Louisville, Kentucky, section by section. It covers the executive summary, the SWOT analysis and, most of all, the financials, which are built on calls, prices and the service mix.
Here's what you'll take away:
- The executive summary: see how to set out a facility-heavy business on one page, so a reader sees the funding and the first three years at a glance
- The rules section: learn how the FTC Funeral Rule's price-list requirements and a state license shape what the home publishes and keeps on file
- The service mix and price list: find out how burial, cremation with a ceremony and direct cremation each contribute to revenue per call
- The pre-need schedule: understand what a home owes on contracts it has sold, and what it earns on them
- The first year, month by month: spot the months that lose money before the call count catches up with payroll and rent
- The five-year profit, cash flow and balance sheet: follow how each hire, price change and shift towards cremation shows up in the numbers
- The downside case: have an answer ready for the "what if calls are 20% short?" question, with the steps the owner takes in response
If you're planning a funeral home, read this before you write your own. The home is fictional, so use what fits your community and change the rest.
In this plan
If you need a funeral home business plan template for your own plan, start it in the Toolkit.
Executive Summary
Ridge Cliff is a traditional funeral home that opens on 1 January 2027 in a leased building on the east side of Louisville, Kentucky. It arranges burial services, cremation with a visitation or memorial, and direct cremation, and it sells pre-need contracts so that families can settle the arrangements in advance. Founder Stan Peters, a Kentucky-licensed funeral director and embalmer, owns 100% of Ridge Cliff Funeral Home, LLC.
The home raises $560,500: $230,500 of Stan's savings and a $330,000 bank term loan. About $283,000 goes into the fitted-out building, a preparation room with cold storage, a hearse and a removal van. A further $72,500 covers opening stock, licensing, legal work and the launch, and $205,000 is held as a cash reserve.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $461,880 | $770,708 | $983,296 |
| Net income after start-up costs | ($128,578) | $37,974 | $116,597 |
| Closing cash | $97,664 | $117,879 | $201,651 |
The model counts calls, since the revenue of a funeral home follows the number of families it is asked to serve. Ridge Cliff answers 73 in 2027, 120 in 2028 and 150 in 2029. A burial service averages $9,200 on the home's price list, cremation with a ceremony $5,400 and direct cremation $2,100. Cremation is 55% of calls in Year 1 and 63% by Year 5.
Year 1 is a loss. Rent, payroll and loan interest fall due before the call count can cover them, and EBITDA turns positive in September. Year 2 is the first profitable year.
A 20% shortfall in calls is tested in the financial plan. With later hires, one director position dropped, a pay cut for Stan and no distributions, the home stays cash-positive in every year.
The Home and Its Purpose
Legal name: Ridge Cliff Funeral Home, LLC, a Kentucky limited liability company. Owner: Stan Peters, 100%. Premises: about 5,000 square feet of leased building, with a chapel, arrangement room, selection room, preparation room and a covered vehicle bay. Opening date: 1 January 2027. Stage: the lease is in draft, fit-out quotes are in hand and the first license inspection is booked for the quarter before opening.
Purpose
Ridge Cliff exists to give Louisville families a full-service home where the visitation, the funeral and the committal can all be arranged under one roof, at prices set out on a printed list.
Where the home aims to be
- 73 calls in 2027, 120 in 2028 and 188 by 2031.
- Positive EBITDA from September 2027 and a profit after tax from 2028.
- 24 pre-need contracts sold in 2027 and 100 a year by 2031.
- A staff of seven by 2031: four licensed directors, a coordinator, a counselor and a part-time attendant.
What the home sells
| Service | What it includes | Price | Share of Year 1 revenue |
|---|---|---|---|
| Traditional burial | Visitation, funeral in the chapel or at a church, hearse, casket and outer container, committal | $9,200 | 65% |
| Cremation with a ceremony | Visitation or memorial, cremation container or urn, crematory charge | $5,400 | 21% |
| Direct cremation | Transfer, care, container and crematory charge, no ceremony | $2,100 | 10% |
| Pre-need contracts | Advance arrangements, funded by insurance or a trust | Commission of 12% of face value on insurance-funded contracts | 3% |
Rules the home works under
The Federal Trade Commission's Funeral Rule covers businesses that sell both funeral goods and funeral services. According to the FTC's compliance guide, it applies to pre-need as well as at-need arrangements. The home hands a General Price List to anyone who asks in person about goods, services or prices, gives accurate prices to telephone callers who ask for them, and gives each family an itemized statement of the goods and services selected at the end of the arrangement conference. It states that embalming is not required by law except in special cases, and does not charge a fee for a casket bought elsewhere. The Rule may be amended, so Stan confirms the current text with counsel before opening and each year after.
The plan treats a Kentucky funeral establishment as needing a license from the Board of Embalmers and Funeral Directors before it operates. The statute is cited in summaries of the state's regulations as KRS 316.125, and its text was not read for this plan. The Board's establishment standards (201 KAR 15:110, also read only in summary) are understood to cover items kept for inspection, among them current price lists. Ridge Cliff keeps its three price lists and every itemized statement together in the arrangement room. License terms, renewal dates and inspection rules change, so Stan confirms them with the Board and with counsel before opening and at each renewal.
Selling insurance-funded pre-need is expected to require an insurance producer license in Kentucky, and pre-need money is subject to state rules on how it is held and when it can be withdrawn. Stan confirms both with the Kentucky Department of Insurance and with counsel before the first sale. Until he has, the plan's pre-need figures are planning figures.
The Market Ridge Cliff Enters
What the national numbers show
The National Funeral Directors Association projects a national cremation rate of 63.4% for 2025 and a burial rate of 31.6% (2025 Cremation & Burial Report). The share has risen for years, and a faster rise would lower revenue per call; the financial plan sets out that sensitivity. The plan opens at 55% cremation because its first families are older and tied to local congregations, and reaches 63% by Year 5.
What funeral directors earn
The Bureau of Labor Statistics reports a median of $78,790 for funeral home managers and $55,010 for morticians, undertakers and funeral arrangers in May 2025. It projects employment growth of 4% and 3% for the two groups from 2025 to 2035. Ridge Cliff pays Stan $85,000 and its licensed directors $58,000 to $70,000 at the start of the plan. Pay raises of 3% a year are charged from Year 2.
Who a family can call instead
| Alternative | What it offers | Why a family picks it | Where Ridge Cliff differs |
|---|---|---|---|
| Long-established family-owned homes | Full service, often several generations in one community | Familiarity, and a name the family already knows | A new building with a chapel and a gathering room, and a printed price list handed over at the first meeting |
| Homes owned by national or regional groups | Several locations, shared vehicles and staff | Choice of location, and a recognizable name | One location, and the same director from the first call to the committal |
| Direct cremation providers, including online ones | Cremation without a ceremony, which providers commonly price below a full service | Price and speed | A full ceremony where a family wants one, with direct cremation also on the list |
| Church and cemetery arrangements | Services at the family's own church, with a local home handling the rest | Convenience, and continuity with the congregation | Removals, preparation and a staffed chapel when the church is unavailable |
The table describes each alternative by category. Prices are not quoted, because homes publish their own General Price Lists and they change.
What this section does not include
The plan cites no local death count and no count of competing homes in Jefferson County, because neither was sourced for this example. Before opening, Stan would obtain county death figures from the state, list the homes within a 20-minute drive and check that 73 calls in 2027 and 188 in 2031 represent a plausible share of them. The call counts are the plan's figures, and a lender would expect to see that check.
Strengths, weaknesses, opportunities and threats
| Strengths | Weaknesses |
|---|---|
| Founder licensed as funeral director and embalmer, with fourteen years in Louisville homes | No name of its own yet; every family starts from zero |
| A printed price list from day one | Year 1 loses money and draws on the reserve |
| Preparation room and chapel on site, so the home does not depend on other facilities | One building, two vehicles and one licensed director on most nights in the first months |
| Opportunities | Threats |
|---|---|
| Pre-need contracts that bring future calls to the home | A larger group opening or buying a home nearby |
| Referrals from clergy, hospices and care homes | A national shift towards direct cremation lowering revenue per call |
| Gathering space for families who want a ceremony after cremation | Loss of a licensed director in the first two years |
The Families Who Call
Most calls come in the hours after a death, from an adult son or daughter, a spouse or a care-home nurse. The family wants someone to collect the person, explain the choices and the cost, and take charge of the paperwork.
Ridge Cliff expects three kinds of family.
- Families who want a traditional service, with a visitation, a funeral and a burial. They make up 45% of Year 1 calls, falling to 37% by Year 5.
- Families who choose cremation and still want a gathering, which is 25% of Year 1 calls and 29% by Year 5.
- Families who want a simple cremation and will hold their own memorial elsewhere, 30% of Year 1 calls and 34% by Year 5.
Many families arrange a funeral only a few times in their lives and may not compare homes in advance, so the nearest home or the one a friend recommended often receives the call. Price becomes a question at the arrangement conference, and the Funeral Rule means the family can ask it on the telephone first.
From First Call to Arrangement
The first twenty-four hours
A director answers every call, day or night. A removal follows within a couple of hours, and the arrangement conference is held that day or the next. The family is handed the General Price List at the start of that conversation. The director then writes the itemized statement with the family and gives it to them before they leave.
Turning inquiries into arrangements
The plan expects about 105 first inquiries in 2027, with 73 becoming arrangements. Others go to homes the family already knows, or choose a provider on price alone. Stan takes the first inquiry on every call in Year 1.
Where Year 1 calls come from
| Source | Calls in 2027 | Share |
|---|---|---|
| Families Stan has served before and their relatives | 30 | 41% |
| Clergy and congregations | 14 | 19% |
| Google search and local reviews | 11 | 15% |
| Hospices, care homes and hospitals | 8 | 11% |
| Community groups and events | 10 | 14% |
Pre-need: what is sold and how it is held
Pre-need lets a person choose and pay for their own funeral in advance. The home sells it two ways. Insurance-funded contracts pay the home when the service is delivered, and the home earns a commission of 12% of face value when the contract is sold. Trust-funded contracts place the family's money in a trust, where it stays until delivery. Ridge Cliff sells 24 contracts in 2027, rising to 100 a year by 2031, at an average face value of $7,500 in 2027 and 3% higher each year.
| 2027 | 2028 | 2029 | 2030 | 2031 | |
|---|---|---|---|---|---|
| Contracts sold in the year | 24 | 50 | 75 | 90 | 100 |
| Contracts sold to date | 24 | 74 | 149 | 239 | 339 |
| Face value sold in the year | $180,000 | $386,250 | $596,756 | $737,591 | $844,132 |
| Face value sold to date | $180,000 | $566,250 | $1,163,006 | $1,900,597 | $2,744,729 |
| Of which in trusts, to date | $54,000 | $169,875 | $348,902 | $570,179 | $823,419 |
Pre-need grows faster than calls because Stan and the directors sell it in 2027, the counselor takes it over from month 19, and the home expects each contract to become a call in time: 24 contracts against 73 calls in 2027, and 100 against 188 by 2031. The counselor costs about $58,000 a year with on-costs, against $32,445 of commission in 2028. The role also covers aftercare and follow-up with families, and the plan treats the gap as the price of building a base of families who have already chosen the home.
The home's liability on a pre-need contract is a promise to deliver the chosen services later, and the money sits with an insurer or a trustee, so neither appears as cash on the balance sheet. The table is a ceiling: some contracts will be delivered within the five years, and the plan does not net them off. When an insured contract is delivered the home bills the insurer, which is one reason receivables are modelled at 28 days.
Staying Known in the Community
What the first year of marketing costs
The 2027 budget is $42,000: $18,000 of launch spend paid from start-up capital and $24,000 of operating spend. That is 9% of Year 1 revenue and about $575 for each of the 73 calls. The share falls to 2.5% by Year 3 and 2.2% by Year 5 as repeat families and referrals take over.
| Channel | 2027 spend | What it is meant to do |
|---|---|---|
| Website, signage and open house (launch) | $18,000 | A site with prices and a prompt telephone number, signs on the building, and an afternoon for clergy, hospice staff and neighbors to see the chapel |
| Clergy, hospice and care-home visits | $5,500 | Regular visits and a short guide on what a home does in the first hours; about 22 calls |
| Community sponsorships | $6,500 | Church bulletins, veterans' groups and school programs; about 10 calls |
| Google Business Profile and local search | $7,000 | Correct hours, reviews and a price-list page; about 11 calls |
| Pre-need talks | $5,000 | Short talks at churches and senior centers, leading to the 24 pre-need contracts |
Milestones
- January 2027: open, with the General Price List published on the website and the license inspection passed.
- April 2027: 17 calls to date, and the first referral from a local congregation.
- September 2027: seven calls in the month and EBITDA turns positive.
- December 2027: 73 calls for the year and 24 pre-need contracts sold.
Inside the Building
Layout
About 5,000 square feet at $14 a square foot a year, all in, which is $70,000 in 2027. The chapel seats about 100. Around it sit an arrangement room, a selection room for caskets and urns, an office, the preparation room with a six-place refrigeration unit, and a covered bay for the hearse and the removal van. The lease runs ten years with two renewal options.
How a service moves through the home
A removal is made by two people, one a licensed director and the other a trained technician paid per call. The person in the home's care is identified and logged at every step. Embalming is done only with the family's authorization. The director plans the service with the family, the coordinator files the paperwork and the part-time attendant staffs the visitation. After the service the family is contacted at one week and at thirty days, by the counselor once that role is filled in month 19.
Software and records
A funeral-management system holds each case, the itemized statement and the price lists with their effective dates. It sits beside phone and e-signature tools. Software costs $9,000 in 2027 and $14,000 by 2031.
Directors and workload
| 2027 | 2028 | 2029 | 2030 | 2031 | |
|---|---|---|---|---|---|
| Calls | 73 | 120 | 150 | 172 | 188 |
| Licensed directors at year end | 2 | 2 | 2 | 3 | 4 |
| Calls per licensed director | 37 | 60 | 75 | 57 | 47 |
The load is light in the first two years on purpose, since every call needs a licensed director available day and night and the home does not stretch two people across a year of nights on call. It reaches 75 calls per director in 2029, with relief directors paid per call covering nights and weekends. The senior director joins in month 38 and the second in month 52, so each hire follows a year of higher volume. The figures are the plan's own and are not a limit.
Zoning, parking and the lease
A chapel for about 100 needs a zoning classification that permits a funeral home and enough off-street parking for a service and a procession. The lease is conditional on Louisville Metro confirming both, and Stan confirms the requirements with the planning office before signing. The lease gives the home a right of first refusal if the landlord sells. The plan does not buy the building. A purchase would need a separate loan, and the plan keeps the bank loan to the fit-out and the vehicles.
Collateral and the loan
The bank takes a lien on the hearse, the van and the preparation-room equipment, an assignment of the lease and Stan's personal guarantee. The fit-out of a leased building adds little collateral, and equipment and vehicles cover only part of $330,000. The bank may therefore ask for further security, such as a lien on property Stan owns. The plan treats the loan as available on those terms.
Licenses and insurance
- A Kentucky funeral establishment license from the Board of Embalmers and Funeral Directors, and funeral director and embalmer licenses for each director.
- General and professional liability, commercial auto for the hearse and van, property, cyber and workers' compensation coverage, budgeted at $20,000 in 2027.
- Written price lists with an effective date on each, held to the FTC's wording, and a signed itemized statement for every family.
- A trust or insurance arrangement for every pre-need contract, reviewed with counsel before the first sale.
Suppliers
A casket and urn wholesaler on consignment terms for part of the stock, a crematory that charges per cremation, a florist, a printer and an answering service for calls after hours. None is hard to replace.
The People Behind the Home
Stan Peters, founder and funeral director
Stan has fourteen years in funeral service in Louisville, the last six as managing director of one location of a regional group. He holds Kentucky funeral director and embalmer licenses and a degree in funeral service. His $230,500 is savings built up over those years. He is leaving the group to run a smaller home where he handles the arrangement conferences himself.
Where the team is thin
Stan has opened a new building only as a manager, not as an owner, and has not run pre-need sales on his own account. The home covers both with a pre-need counselor from month 19, an outside accountant who reviews pre-need records each quarter, and counsel for the trust and insurance paperwork. Until the second director joins in month 8, relief directors cover nights and weekends when Stan is away.
If Stan is unavailable
The second director holds a full Kentucky license and can run arrangements in his absence, and the home carries disability and key-person coverage on Stan. Before month 8 two licensed relief directors hold standing agreements to cover the home, and a family can reach one of them by the same telephone number. A senior director joins in month 38.
Outside advice
An accountant with funeral-home clients reviews the first year each quarter. Stan also draws on state and national association materials for price-list updates and rule changes.
Ownership and the bank
Stan owns 100% of the LLC and gives the bank a personal guarantee. The loan carries a covenant to deliver quarterly accounts.
Five Years of Calls, Prices and Payroll
Every revenue line below is a number of calls multiplied by a price, so the call counts, the service mix and the price list come before any table. The model runs monthly through 2027 and annually after that.
Fitting out the building and funding the opening
| Use of funds | Amount |
|---|---|
| Fit-out of the leased building: chapel, arrangement room, preparation room, accessible entrance | $105,000 |
| Preparation room and cold storage: six-place refrigeration, tables, instruments, ventilation | $48,000 |
| Used hearse and removal van | $92,000 |
| Chapel seating, selection-room displays, phones and office systems | $38,000 |
| Opening selection of caskets, urns and containers (balance on supplier consignment) | $34,000 |
| Establishment license, inspection fees and local permits | $4,500 |
| Legal: lease, price-list compliance review, pre-need program set-up | $16,000 |
| Launch: website, signage, open house and community introductions | $18,000 |
| Cash reserve for the first-year shortfall while calls build | $205,000 |
| Total uses | $560,500 |
| Source of funds | Amount |
|---|---|
| Stan Peters's savings | $230,500 |
| Bank term loan (SBA-style, equipment and fit-out) | $330,000 |
| Total sources | $560,500 |
Stan Peters puts in $230,500 of savings, 41% of the $560,500 raised, and the bank lends $330,000 over ten years at 10.25%, interest-only for the first six months. The rate is a figure for this example and not a quoted lending rate. The bank takes a lien on the vehicles and equipment, an assignment of the lease and a personal guarantee. A leased fit-out adds little collateral, so a lender may ask for more. Most of the money goes into the fitted-out building and two vehicles, because a funeral home cannot open without a preparation room, a chapel and a hearse. The $205,000 reserve carries the home through a first year in which salaries, rent and loan interest are paid before calls reach ten a month, and through the slower Year 2 that follows.
Calls, prices and costs behind the model
- Revenue is calls multiplied by the average price of the service. The home answers 73 calls in 2027, then 120, 150, 172 and 188 in the four years after. Deaths are often more frequent in winter, but the 2027 build-up from 3 calls in January to 10 in December outweighs any seasonal pattern, and the model applies none.
- The Year 1 mix is 45% traditional burial, 25% cremation with a visitation or memorial, and 30% direct cremation. Cremation of either kind is 55% of calls and rises to 63% by Year 5. NFDA's 2025 Cremation & Burial Report projects a national cremation rate of 63.4% for 2025. The plan starts below that because the home's first families are older and tied to local churches, and ends close to it. The national rate may be higher still by 2031, and the sensitivity in the sales forecast shows what that does to revenue.
- Revenue per call comes from the home's own price list: $9,200 for a traditional burial service with casket and outer container, $5,400 for cremation with a visitation or memorial, and $2,100 for direct cremation. Prices rise 3% a year from Year 2. Blended revenue per call, before pre-need, is about $6,100 in Year 1 and $6,400 in Year 5, because the move towards cremation offsets most of the price rises.
- Cash-advance items, such as cemetery opening fees, clergy honoraria, flowers, newspaper notices and certified death certificates, are paid on the family's behalf and sit outside both revenue and costs. Families reimburse them at the arrangement conference, so the home carries the money for only a few days, and that float is small enough to sit inside the 28-day receivables figure.
- Pre-need sells 24 contracts in 2027 at an average face value of $7,500 and 100 a year by Year 5. Seven in ten are funded by insurance, on which the home earns a 12% commission when the contract is sold. The other three are funded through a trust, where the money stays until the service is delivered. Neither insurance proceeds nor trust balances are the home's cash, so neither appears on its balance sheet. Chargebacks from an insurer on a lapsed contract are not modelled.
- Merchandise and crematory charges run at 19% to 30% of revenue by line: casket and outer container on burial services at 20%, urns and the crematory charge on the two cremation lines at 19% and 30%. Preparation-room supplies, linens and regulated-waste disposal are a separate operating line. Card-processing fees are budgeted at 1% of revenue, and a planning line for Louisville Metro occupational license tax and the Kentucky limited liability entity tax runs from $1,500 to $6,500 a year; Stan confirms both rates with a CPA.
- Receivables average 28 days. Most families settle at the arrangement conference, while insurance assignments and some estate-paid accounts take four to six weeks. The bad-debt allowance is about 1.1% of revenue from Year 2.
- Payroll adds 27% to wages for payroll taxes, health coverage, workers' compensation and a retirement match (15% for the part-time attendant). Annual pay raises of 3% are charged as a separate line from Year 2. Insurance covers general and professional liability, commercial auto for the two vehicles, property and cyber.
- The building is leased: about 5,000 square feet at $14 a square foot a year all in, which is $70,000 in Year 1, rising 3% a year. The lease runs ten years with two renewal options and has no step to a larger building. Zoning and parking approval are conditions of the lease.
- Ridge Cliff Funeral Home, LLC elects to be taxed as a corporation, so tax is charged at the federal corporate rate of 21% and a 5% state planning rate, with the Year 1 loss carried forward. Both rates are planning figures and may change; confirm them with a CPA. A pass-through election would move the tax to Stan's personal return and leave more cash in the home. Distributions of $20,000, $60,000 and $80,000 are paid in Years 3 to 5, only from cash the model shows the home can spare.
Revenue by type of service
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Traditional burial services (visitation, funeral, committal; casket and container) | $302,220 | $477,590 | $585,617 | $657,070 | $720,272 |
| Cremation with visitation or memorial service | $98,550 | $180,209 | $240,612 | $294,328 | $331,359 |
| Direct cremation and immediate burial | $45,990 | $80,464 | $106,939 | $130,249 | $151,079 |
| Pre-need sales commissions | $15,120 | $32,445 | $50,128 | $61,958 | $70,907 |
| Total revenue | $461,880 | $770,708 | $983,296 | $1,143,605 | $1,273,617 |
| Growth on prior year | – | 67% | 28% | 16% | 11% |
Traditional burial carries the revenue because one burial call brings in about 1.7 times a cremation with a ceremony and more than four times a direct cremation. Burial remains the largest line in every year, but its share falls from 65% of revenue in Year 1 to 57% in Year 5 as the mix moves towards cremation. Pre-need commissions are the smallest line, at 3% to 6% of revenue, and each contract also records a family's wish to use the home when the time comes. Sensitivity: if cremation reached 70% of calls by Year 5 (burial 30%, ceremony 28%, direct 42%) instead of 63%, blended revenue per call would fall from about $6,400 to about $5,800, revenue by about $112,000 and gross profit by about $93,000 in that year, before any cost response.
Month by month in 2027
| Month | Traditional burial services (visitation, funeral, committal; casket and container) | Cremation with visitation or memorial service | Direct cremation and immediate burial | Pre-need sales commissions | Total revenue | EBITDA |
|---|---|---|---|---|---|---|
| Jan 2027 | $12,420 | $4,050 | $1,890 | $0 | $18,360 | ($18,391) |
| Feb 2027 | $16,560 | $5,400 | $2,520 | $0 | $24,480 | ($13,502) |
| Mar 2027 | $20,700 | $6,750 | $3,150 | $630 | $31,230 | ($8,111) |
| Apr 2027 | $20,700 | $6,750 | $3,150 | $630 | $31,230 | ($8,111) |
| May 2027 | $20,700 | $6,750 | $3,150 | $1,260 | $31,860 | ($7,608) |
| Jun 2027 | $20,700 | $6,750 | $3,150 | $1,260 | $31,860 | ($7,608) |
| Jul 2027 | $24,840 | $8,100 | $3,780 | $1,260 | $37,980 | ($2,720) |
| Aug 2027 | $24,840 | $8,100 | $3,780 | $1,890 | $38,610 | ($2,216) |
| Sep 2027 | $28,980 | $9,450 | $4,410 | $1,890 | $44,730 | $2,672 |
| Oct 2027 | $33,120 | $10,800 | $5,040 | $1,890 | $50,850 | $7,560 |
| Nov 2027 | $37,260 | $12,150 | $5,670 | $2,520 | $57,600 | $12,951 |
| Dec 2027 | $41,400 | $13,500 | $6,300 | $1,890 | $63,090 | $17,336 |
Revenue follows the call count, from three calls in January to ten in December. EBITDA is negative from January to August and positive from September to December, when calls reach seven to ten a month. The lowest month-end cash balance is Oct, at about $64,000 after allowing for the 28 days families and insurers take to pay.
Directors and staff
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder, funeral director and embalmer | $85,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Family-services coordinator (phones, price lists, paperwork) | $36,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Service attendant (part time, visitations and funerals) | $16,000 | Month 1 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Funeral director and embalmer | $58,000 | Month 8 | 1 | 1 | 1 | 1 | 1 |
| Pre-need and aftercare counselor | $46,000 | Month 19 | – | 1 | 1 | 1 | 1 |
| Senior funeral director and embalmer | $66,000 | Month 38 | – | – | – | 1 | 1 |
| Second senior funeral director and embalmer | $70,000 | Month 52 | – | – | – | – | 1 |
| Total payroll incl. on-costs | $202,762 | $274,940 | $304,150 | $380,985 | $454,645 |
Stan opens with a family-services coordinator, a part-time attendant and relief directors paid per call. A second licensed director and embalmer joins in month 8, when monthly calls reach six and one person can no longer cover every removal and every evening. The pre-need and aftercare counselor starts in month 19, a senior director in month 38 and a second senior director in month 52. Stan's $85,000 salary is already in the costs, so the profit lines show what is left after he has been paid. Payroll with pay raises is 44% of revenue in Year 1, falls to 33% in Year 3 and rises to 40% by Year 5 as the senior hires arrive.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $461,880 | $770,708 | $983,296 | $1,143,605 | $1,273,617 |
| Direct costs (caskets, containers, urns, crematory charges) | ($92,965) | ($155,125) | ($197,914) | ($230,181) | ($256,349) |
| Gross profit | $368,915 | $615,583 | $785,382 | $913,424 | $1,017,268 |
| Payroll incl. on-costs | ($202,762) | ($274,940) | ($304,150) | ($380,985) | ($454,645) |
| Rent | ($70,000) | ($72,100) | ($74,300) | ($76,500) | ($78,800) |
| Utilities | ($15,000) | ($15,500) | ($16,000) | ($16,500) | ($17,000) |
| Marketing | ($24,000) | ($24,000) | ($25,000) | ($26,500) | ($28,000) |
| Insurance | ($20,000) | ($22,500) | ($25,000) | ($27,000) | ($29,000) |
| Professional fees | ($9,000) | ($9,500) | ($10,000) | ($10,500) | ($11,000) |
| Software subscriptions | ($9,000) | ($10,500) | ($12,000) | ($13,000) | ($14,000) |
| Relief directors, removal technicians and after-hours answering (per call) | ($14,000) | ($20,000) | ($27,000) | ($27,000) | ($26,000) |
| Preparation-room supplies, linens and regulated-waste disposal | ($5,500) | ($9,000) | ($11,000) | ($12,500) | ($13,500) |
| Vehicle fuel, servicing and chapel hospitality | ($11,500) | ($17,500) | ($21,500) | ($24,700) | ($27,000) |
| Licenses, continuing education and association dues | ($3,800) | ($4,200) | ($4,600) | ($4,900) | ($5,200) |
| Pre-need trust administration, audit and compliance | ($1,500) | ($3,500) | ($5,500) | ($7,000) | ($8,000) |
| Equipment and vehicle replacement | $0 | ($6,000) | ($9,000) | ($14,000) | ($12,000) |
| Card-processing fees | ($4,600) | ($7,700) | ($9,800) | ($11,400) | ($12,700) |
| Louisville Metro occupational license tax and Kentucky LLET (planning figures) | ($1,500) | ($3,500) | ($5,000) | ($5,800) | ($6,500) |
| Bad debt allowance | ($4,500) | ($8,500) | ($11,000) | ($12,700) | ($14,000) |
| Annual pay raises (3% a year) | $0 | ($8,248) | ($18,523) | ($35,328) | ($57,062) |
| EBITDA | ($27,747) | $98,395 | $196,009 | $207,111 | $202,861 |
| Depreciation | ($28,729) | ($28,729) | ($28,729) | ($28,729) | ($28,729) |
| Interest | ($33,602) | ($31,692) | ($29,242) | ($26,529) | ($23,525) |
| Income tax | $0 | $0 | ($21,441) | ($37,887) | ($37,577) |
| Net income before start-up costs | ($90,078) | $37,974 | $116,597 | $113,966 | $113,031 |
| Start-up costs expensed at opening (licensing, legal, launch marketing) | ($38,500) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($128,578) | $37,974 | $116,597 | $113,966 | $113,031 |
Year 1 loses $90,078 before start-up costs and $128,578 after them: payroll, rent and loan interest are fixed, and only 73 calls arrive to cover them. Year 2 is the first profitable year, with an EBITDA margin of 12.8%. The margin peaks at 19.9% in Year 3, before the senior director arrives in month 38, and eases to 15.9% by Year 5 as two senior directors are added and the 3% pay raises compound. Income tax is zero in Years 1 and 2 because of the Year 1 loss carried forward.
Cash movements
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($169,281) | $43,012 | $129,018 | $130,397 | $131,786 |
| Fit-out, preparation room, vehicles and furnishings | ($283,000) | $0 | $0 | $0 | $0 |
| Funding received | $560,500 | $0 | $0 | $0 | $0 |
| Loan principal repaid | ($10,555) | ($22,797) | ($25,246) | ($27,959) | ($30,964) |
| Owner distributions | $0 | $0 | ($20,000) | ($60,000) | ($80,000) |
| Net change in cash | $97,664 | $20,215 | $83,771 | $42,438 | $20,822 |
| Closing cash | $97,664 | $117,879 | $201,651 | $244,088 | $264,910 |
Closing cash stays positive at every year end, and the lowest year-end balance is $97,664 in December 2027. From Year 3 cash builds faster than the plan needs. Stan keeps the loan in place and holds the cash as a buffer against a weak year, the replacement of a vehicle and a net-worth covenant, and pays distributions of $20,000, $60,000 and $80,000 in Years 3 to 5. He would consider prepaying part of the loan once calls had met the plan for two years in a row.
Balance sheet
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $97,664 | $117,879 | $201,651 | $244,088 | $264,910 |
| Accounts receivable | $35,432 | $59,123 | $75,431 | $87,729 | $97,702 |
| Merchandise inventory | $34,000 | $34,000 | $34,000 | $34,000 | $34,000 |
| Fit-out, preparation room, vehicles and furnishings (net) | $254,271 | $225,543 | $196,814 | $168,086 | $139,357 |
| Total assets | $421,367 | $436,545 | $507,896 | $533,902 | $535,970 |
| Bank term loan | $319,445 | $296,648 | $271,402 | $243,442 | $212,479 |
| Paid-in capital | $230,500 | $230,500 | $230,500 | $230,500 | $230,500 |
| Retained earnings | ($128,578) | ($90,603) | $5,994 | $59,960 | $92,991 |
| Total liabilities and equity | $421,367 | $436,545 | $507,896 | $533,902 | $535,970 |
Margins, cover and break-even
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -6.0% | 12.8% | 19.9% | 18.1% | 15.9% |
| Net margin (before start-up costs) | -19.5% | 4.9% | 11.9% | 10.0% | 8.9% |
| Payroll incl. pay raises as share of revenue | 44% | 37% | 33% | 36% | 40% |
| Revenue per full-time equivalent at year end | $131,966 | $171,268 | $218,510 | $207,928 | $195,941 |
| Average monthly revenue | $38,490 | $64,226 | $81,941 | $95,300 | $106,135 |
| Monthly revenue needed to cover operating costs | $41,385 | $53,960 | $61,491 | $73,692 | $84,970 |
| Debt service cover (EBITDA / interest + principal) | -0.6x | 1.8x | 3.6x | 3.8x | 3.7x |
In Year 1 the home averages $38,490 of monthly revenue against $41,385 needed to cover operating costs, which at about $6,100 a call is nearly 6.8 calls a month against a Year 1 average of 6.1. In Year 2 it needs about 8.8 calls a month and answers 10. Debt service cover is negative in Year 1 because EBITDA is negative while interest is paid, then holds between 1.8x and 3.8x.
If calls run 20% short
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $369,504 | $616,566 | $786,637 | $914,884 | $1,018,894 |
| Net income before start-up costs | ($133,870) | ($22,393) | $16,217 | $51,688 | $60,122 |
| Net income after start-up costs | ($172,370) | ($22,393) | $16,217 | $51,688 | $60,122 |
| Closing cash | $60,958 | $25,543 | $32,196 | $74,814 | $124,722 |
This case cuts every revenue line by 20% in every year, which is about 58 calls in 2027 and 150 by Year 5. The management response: hires from month 13 start six months later, the second senior director is dropped, marketing is cut by 20%, Stan takes a 20% pay cut, relief, supply and bad-debt costs fall with the volume, and no distributions are paid. On those terms the home ends every year with cash in the bank, at no less than $25,543, and is profitable from Year 3. The lowest month-end cash in 2027 is about $41,000, in November, after allowing for receivables. Equity ends Year 1 at $58,130, which leaves little room under a net-worth covenant, so Stan would speak to the bank before the first covenant date. Without the response, the same shortfall would leave the home without cash from Year 2.
Sources
- Federal Trade Commission, Complying with the Funeral Rule. The Rule may be amended; confirm with counsel.
- National Funeral Directors Association, Statistics: 2025 Cremation & Burial Report, projected cremation and burial rates for 2025, page updated 29 September 2025.
- Bureau of Labor Statistics, Funeral service occupations, Occupational Outlook Handbook, May 2025 wage data and 2025 to 2035 projections.
- Kentucky Legislature, 201 KAR 15:110, funeral establishment standards, known here through search summaries of the regulation page. KRS 316.125 was identified the same way and its text was not read. Confirm both with the Board and counsel.
- Federal corporate income tax rate of 21% and the Kentucky corporate rate: planning figures, not sourced to a primary page. Confirm with a CPA.
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