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A funeral business answers to a licensing board, a lender and, most of all, families who expect clear prices at a hard time. The plan has to settle some questions first. What does it cost to open without a chapel? How many calls a year cover the costs? What happens if calls arrive 20% below forecast?
This article walks through a complete sample plan for a direct cremation and simple-services provider in Kansas City, Missouri, section by section. It covers the executive summary, the market and the competition, how prices are set and published, and in particular all of the financials.
What the plan gives you to work from:
- The executive summary: a one-page statement of what the firm sells, what it needs and when it turns a profit, so a reader sees the whole business before the detail
- The legal position: how the plan treats the FTC Funeral Rule and Missouri licensing, so you know which questions to put to the regulator rather than guess
- Pricing and the price list: a worked example of an all-in direct cremation price and the pass-through costs inside it, so the margin per call is visible
- The marketing plan: what a new provider can spend to reach its first 157 calls, and the cost per call as referrals take over
- The first year, month by month: the months that lose money, and how much cash that takes
- Staffing and on-call cover: when each hire is justified by call volume, so payroll does not run ahead of revenue
- The five-year profit and loss, cash flow and balance sheet, with break-even stated in calls a month
- The downside case: a worked answer to the question of a 20% shortfall in calls, with the steps the owner takes in response
The firm is fictional. Take the structure and the working, and replace the figures with your own market's.
In this plan
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The Plan in Brief
Rest in Power is a Kansas City, Missouri, funeral provider that opens on 1 January 2027 and sells two things: direct cremation at a single published price, and simple services for families who want a gathering without a funeral home chapel. It owns no chapel and no crematory. The firm leases an office for arrangements, runs removals from its own van, holds remains and hosts services at a shared facility under a retainer, and uses a licensed third-party crematory. Founder Denise Whitfield, a licensed funeral director, owns 100%.
The firm needs $215,000: $115,000 of Denise's savings and a $100,000 bank term loan. Of that, $72,500 buys the van, fit-out and equipment, $24,200 covers licences, legal work and the launch campaign, and $118,300 is held as a cash reserve.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $362,155 | $696,463 | $1,022,263 |
| Net income after start-up costs | ($94,037) | $10,556 | $95,702 |
| Closing cash | $47,199 | $50,725 | $138,283 |
Calls grow from 4 in January 2027 to 22 in December, 157 for the year, and reach 410 in Year 3. Year 1 is a loss because two staff and a van are in place before call volume can pay for them. In the monthly table, which spreads Year 1 costs evenly, operating profit turns positive in September 2027; with the arranger's pay added from October it would sit close to break-even until volume builds. Year 2 is the first profitable year.
A downside case is run in full. If calls come in 20% under plan and Denise slows hiring, cuts marketing and her own pay and pays no distributions, the firm closes every year with cash in the bank.
The firm's position is narrow on purpose. Every price is posted on the website, the direct cremation price includes the crematory fee, and families can arrange by phone or video without visiting an office. It does not claim to be the cheapest provider in the city.
About Rest in Power
Legal name: Rest in Power, LLC, a Missouri limited liability company. Owner: Denise Whitfield, 100%. Premises: about 1,400 square feet of leased office space near downtown Kansas City, with a secured parking space for the van. Opening: 1 January 2027. Stage: pre-launch. The lease is in draft, the shared-facility agreement is being negotiated with two candidates and the website with the price list is built.
What the firm sells
| Service | How it is priced | Year 1 share of revenue |
|---|---|---|
| Direct cremation: transfer, care, paperwork, crematory fee, container and return of the ashes | $1,595, all-in | 54% |
| Cremation with a gathering or witnessed service at the shared facility | $3,450 on average, room hire included | 32% |
| Urns, keepsakes and certified copies of the death certificate | $310 per call on average | 13% |
The firm does not embalm, sell caskets or sell pre-need contracts in this plan. A family that wants a viewing or a burial is referred to a funeral home with the facilities.
Targets for the first two years
- 157 calls in 2027, then 290 in 2028.
- A profit after tax in 2028.
- A median reply of under ten minutes to a price enquiry, day or night.
- Three full-time people and two part-time technicians by the end of 2028.
Where the rules apply
Two sets of rules shape the business, and the plan is built to be checked against both.
The FTC Funeral Rule (16 CFR Part 453) applies to any provider of funeral goods and services. The plan relies on the FTC's business guidance and a consumer page dated July 2012, not on the rule text itself, and the exact wording would be checked before opening. As those pages describe it, prices must be given by phone without asking for a caller's name or address. A printed general price list, carrying an effective date, must be offered to anyone who asks in person. A provider that offers direct cremation must offer an alternative container and say that one can be used. The firm may not claim that law requires a casket for direct cremation, and may not charge a handling fee when a family buys goods elsewhere. An itemized statement of the goods and services selected is given at the arrangements conference or before payment, and the guidance asks for price lists and statements to be kept for at least a year. The consumer page says that posting prices online is not required. The firm posts them anyway. The FTC has also considered changes to price disclosure, online posting among them, so the current status of the rule is a question for counsel.
Missouri licensing sits with the Missouri Board of Embalmers and Funeral Directors. Under section 333.061 of the Revised Statutes of Missouri, as published on the state revisor's site, a funeral establishment may not operate without a licence. The licence is issued only if a licensed funeral director manages the establishment, any embalming is done by or under a licensed embalmer, any embalming room meets the statute's standards and the premises comply with zoning. The statute gives the Board 30 days to decide an application, with extensions on request. Denise holds a funeral director licence. Because the firm will not embalm or run a crematory, the open questions for the Board are which premises standards apply to an arrangements office that uses a shared facility for holding and preparation, and how the Board's cremation rules treat a provider that contracts a third-party crematory. They stay open here: $3,200 is budgeted for licences and permits and $9,000 for a lawyer to resolve them in writing before the lease is signed. Missouri also has a separate rule on authorization for cremation, published by the Department of Health and Senior Services (19 CSR 10-10.100). Its content was not reviewed for this plan, and the arrangers would work from its current text.
The Kansas City Cremation Market
What the national figures show
The National Funeral Directors Association's 2025 Cremation & Burial Report projected a 2025 cremation rate of 63.4% in the United States, against a burial rate of 31.6%, and a cremation rate of 82.3% by 2045. A provider built around cremation sits on the side of that trend. No Missouri rate is quoted, because the state table sits in the full report; the local figure belongs in the loan application.
Who works in the trade and what they earn
The Bureau of Labor Statistics reported May 2025 median pay of $55,010 for morticians, undertakers and funeral arrangers (funeral directors) and $78,790 for funeral home managers, and projects employment growth of 3% and 4% respectively from 2025 to 2035. Wages in the plan are set against those two figures.
Sizing the firm, not the market
The metro's annual deaths are not estimated here, so no market share is stated. The firm is sized by what it can deliver: 410 calls in Year 3 and 570 in Year 5, handled by the equivalent of seven full-time staff. The death count from Missouri vital statistics, and the share those calls imply, are the first things a lender will ask for.
Who a family could call instead
| Alternative | What it offers | Why a family picks it | How Rest in Power differs |
|---|---|---|---|
| Full-service funeral homes | Chapel, viewing, burial and cremation | Familiarity, a local building, a chosen faith setting | No chapel and a lower fixed cost than a facility-based home |
| Regional cremation societies | Cremation at set prices, which may be membership based | Name recognition, simple purchase | Arrangements can be completed online without a membership |
| Online cremation brands | Arrangements by web or phone, which may use local partners for the work | Convenience, fast quote | A local licensed director who answers and collects |
| Crematory-run direct services | Cremation sold by the facility itself | May have a shorter handling chain | Independent of any one crematory, with a named director |
| Family-handled arrangements | The family handles forms and transport where the law allows | May cost less | The firm does the paperwork and the transport |
The table describes what each category offers, not a ranking, and discount direct-cremation providers may price below $1,595. This plan sets no Kansas City benchmark; local price lists would be collected before launch. The FTC Funeral Rule requires each provider to give prices on request, so a family can compare.
SWOT
| Strengths | Weaknesses |
|---|---|
| A licensed director with fourteen years in the trade | One senior person for the first nine months |
| A single published price that is easy to compare | No brand or local reputation at opening, and no local price benchmark in the plan |
| Low fixed costs: no chapel, no crematory, one van | Reliance on a shared facility and one crematory contract |
| Opportunities | Threats |
|---|---|
| A rising cremation share nationally | Established homes cutting their own cremation prices |
| Referrals from hospice, senior-care and hospital staff | A change to the Funeral Rule or Missouri licensing that adds costs |
| Families arranging from another city | A single bad review or a service error in the first year |
Families We Serve
Four kinds of caller
Cost-led families. Often the adult children of someone who died, arranging a cremation on a set budget. They call two or three providers and ask for a price first.
Families pointed to the firm by care staff. Hospice and hospital staff cannot steer a family to a provider, but families ask them for names and the staff can hand over a price guide that lists several. The firm wants to be easy to find and to answer when called.
Relatives in another city. A family member arranging by phone and email, who cannot visit an office and needs forms signed remotely. The firm confirms with the Board and the crematory that electronic signatures are accepted for each authorization before it relies on them.
Families who want a gathering without a chapel. They want a short service or a witnessed cremation, and a room that is not a funeral home sanctuary.
The moment of the call
A call usually comes within hours of a death, from someone who has never arranged a funeral. What they ask for first is a price and a time. The firm answers both, and the Funeral Rule requires the price.
What families ask of the firm
A price that does not change. Someone who answers. The paperwork done correctly. Ashes returned when promised. Nothing sold that the family did not ask for.
What they do not get
No pre-need contracts, no caskets and no embalming. Saying so early is part of how the firm earns trust.
Reaching Families
From enquiry to signed arrangements
The sequence is a phone or web enquiry, a price given at once, an arrangement conference by phone, video or in person within a day, and the itemized statement signed before any payment. A removal team goes out inside two hours of a call in the metro area, subject to the medical examiner. Denise handles every arrangement in the first nine months.
The plan expects about 470 price enquiries in Year 1 and one in three to become a call: 157 families.
Where the Year 1 calls come from
| Source | Year 1 calls | Share |
|---|---|---|
| Online search, paid and organic | 56 | 36% |
| Hospice, hospital and senior-living staff | 27 | 17% |
| Repeat families and word of mouth | 22 | 14% |
| Attorneys and estate planners | 20 | 13% |
| Faith, veterans and community groups | 17 | 11% |
| Comparison and directory listings | 15 | 10% |
Marketing spend and cost per call
Year 1 marketing is $50,000: $12,000 of launch spend from start-up capital and $38,000 of running spend. Over 157 calls that is $318 per call, or 14% of revenue. The care-staff line is educational only: a price guide and contact details left where staff are asked for names. The firm pays nothing for referrals and has no referral agreements, since care staff cannot steer families and paid referrals carry legal risk. The cost per call falls to $179 in Year 2, $141 in Year 3, $126 in Year 4 and $118 in Year 5, which is 4% of Year 5 revenue, as families and referrers return.
| Item | Year 1 spend | What it is expected to do |
|---|---|---|
| Website with price list, brand and photography (launch) | $8,000 | A site that posts every price and takes arrangements online |
| Signage and printed packs (launch) | $4,000 | Material for the van, the office and the first outreach visits |
| Paid search | $16,000 | Searches for cremation and funeral services in Kansas City |
| Search content | $6,000 | Plain pages on process and cost, updated as prices change; with paid search, 56 calls at about $393 each |
| Senior-care education | $3,000 | A one-page price guide and talks for staff; 27 calls at about $111 each |
| Attorney and estate-planner outreach | $3,000 | A short briefing pack; 20 calls at about $150 each |
| Faith, veterans and community groups | $3,500 | Talks and events; 17 calls at about $206 each |
| Directory and comparison listings | $3,000 | Listings that show the price; 15 calls at about $200 each |
| Reviews and printed material | $3,500 | Review requests and printed packs; supports the repeat and word-of-mouth calls |
How prices are set
The direct cremation price of $1,595 starts from the pass-through cost of $542 and leaves $1,053 to pay for staff and overhead. It is not tied to a local benchmark. The service price of $3,450 starts from $1,035 of costs. Prices stay flat in Year 1 and rise 3% a year from Year 2. Every item is on the general price list.
Marketing milestones
- January 2027: website and price list live, first four calls.
- June 2027: 12 calls a month and the price guide in the hands of the first ten senior-care providers.
- October 2027: the licensed arranger starts as calls pass fifteen a month.
- December 2027: 22 calls in the month and $51,185 of monthly revenue.
Running Without a Chapel
The office
About 1,400 square feet near downtown Kansas City at $2,900 a month, covering rent and building charges ($34,800 in Year 1), with utilities at $6,000. It has two private arrangement rooms, a records room and storage for urns and supplies. The lease runs five years with a personal guarantee, two years shorter than the loan. Rent stays within the original lease in Years 2 to 5.
The shared facility
A licensed facility holds remains and hosts services under a $14,400 yearly retainer. The agreement sets out access hours, who is responsible for the remains while they are there, and the room hire per service, which sits in direct costs. Two candidate facilities are being compared.
The van and the removal team
One removal van with a cot and a restraint system, bought for $52,000 with the loan, and a second van leased from Year 3 at $9,600 a year. Removals are done by two people. A part-time technician is on call from the first day, a second from month 20, with Denise or the arranger as the other person.
How a call moves through the firm
First call and removal, the arrangement conference, the death certificate and permits, transfer to the crematory, return of the ashes, and a follow-up call. The firm allows about 12 staff hours for a direct cremation and 22 for a call with a service, about 14.3 on average. The table sets the hours the calls need against paid time, using each year's average staffing at 1,750 hours per full-time equivalent.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Calls | 157 | 290 | 410 | 500 | 570 |
| Staff hours the calls need | 2,224 | 4,147 | 5,904 | 7,200 | 8,265 |
| Paid hours (average staff) | 3,063 | 5,758 | 8,015 | 11,673 | 12,250 |
| Share of paid time on calls | 73% | 72% | 74% | 62% | 67% |
Capacity is not the limit on growth in any year. The remaining paid time covers nights, weekends and waiting, and the Year 4 hire is the most generous, which is why it is the first one dropped in the downside case.
Records, systems and the crematory
Arrangement software that produces the general price list, the itemized statement and the authorization forms, a phone system that records every price quoted, and e-signature. Software costs $9,000 in Year 1 and $15,000 by Year 5. The crematory is a licensed operator under contract, invoicing monthly. It is paid in 15 days. Its fee passes through at cost.
Licences and cover
- Funeral establishment licence and funeral director licences from the Missouri Board of Embalmers and Funeral Directors, with the open questions in section two settled in writing first.
- A general price list, casket price list where goods are sold, and itemized statement meeting the FTC Funeral Rule.
- Professional liability, general liability, commercial auto and cyber cover, budgeted at $14,000 in Year 1. Workers' compensation is carried in the 27% payroll on-cost.
- Written authorization for every cremation, from the person with the legal right to give it.
- A written plan for the security of family records.
The Team
Denise Whitfield, founder and managing funeral director
Denise has fourteen years in funeral service in the Kansas City area. She began as a removal technician, qualified as a funeral director and embalmer, and spent her last six years as an arrangement director at a multi-location funeral home, where she handled several hundred families a year. She holds a Missouri funeral director licence. Her $115,000 investment is her savings. She is leaving to run a smaller firm where prices are posted and she answers the phone herself.
Where the team is thin
Denise has not built a referral network from nothing and has not run a payroll. A fixed weekly outreach schedule covers the first, and a payroll provider and an accountant on retainer cover the second.
If Denise is out
Denise is the only licensed director until the arranger starts in month 10. Until then a licensed director from another firm covers by arrangement, and the firm carries disability cover on her. Even so, one director on call for nine months is a strain the lender will examine.
Outside help
A funeral-law attorney reviews the price list and the shared-facility agreement before opening. A retired funeral director mentors her monthly for the first year.
Ownership and the bank
Denise owns 100% of Rest in Power, LLC and gives the bank a personal guarantee and a lien on the van. The loan carries a covenant to deliver quarterly accounts, and the bank may also ask for a minimum net-worth test.
Questions a lender is likely to raise
These are listed rather than answered, and each needs work before a loan application.
- The metro's annual death count, and the share of it that 410 calls in Year 3 represents.
- Whether the Board will license an arrangements office that has no preparation or holding facility of its own.
- The crematory contract: terms, capacity and any shared refrigeration at the facility.
- Twenty-four-hour cover with one licensed director for the first nine months.
- A five-year lease against a seven-year loan.
- Collateral beyond the $52,000 van.
Financial Plan
The model runs for five years, monthly in Year 1 and yearly after that. Funding and operating figures come first so the tables below can be traced back to a stated reason.
Van, licences and launch funding
| Use of funds | Amount |
|---|---|
| Removal van with cot, restraint system and lettering | $52,000 |
| Office fit-out, arrangement room, computers and phones | $14,000 |
| Stretchers, lift, PPE and first-call kit | $6,500 |
| Establishment and funeral director licences, permits | $3,200 |
| Legal: entity, price-list review, lease, shared-facility agreement | $9,000 |
| Launch: website with price list, brand, signage and printed packs | $12,000 |
| Cash reserve for the slow first months | $118,300 |
| Total uses | $215,000 |
| Source of funds | Amount |
|---|---|
| Denise Whitfield's savings | $115,000 |
| Bank term loan | $100,000 |
| Total sources | $215,000 |
Denise Whitfield puts in $115,000 of her own savings, 53% of the $215,000 total, and borrows $100,000 from a bank over seven years at 10.5%, interest-only for the first six months. The bank takes a personal guarantee and a lien on the van, and may ask for more security. The rate is a figure chosen for this example, not a quoted lending rate. The van is the largest single purchase at $52,000. The $118,300 reserve is 55% of the total. It carries a Year 1 operating loss while calls build from four a month to twenty-two, and leaves month-end cash no lower than about $28,000 in September after allowing for receivables. Cash then builds to $138,283 by Year 3 with the loan still outstanding, a deliberate cushion: the firm could prepay, and keeps the loan so the reserve survives a slower year.
Operating figures behind the model
- A call is one family that signs arrangements. Year 1 handles 157 calls, rising from 4 in January to 22 in December, then 290, 410, 500 and 570 in Years 2 to 5. About 470 price enquiries are needed in Year 1 at the one-in-three conversion the plan uses.
- Year 1 splits into 123 direct cremations and 34 calls that add a gathering or witnessed service. The service share moves from 22% to 25% by Year 5. Prices are set at $1,595 for a direct cremation with the crematory fee included, an average of $3,450 for a service with cremation and room hire, and an average of $310 per call across all calls for urns, keepsakes and certified death certificate copies, since not every family buys them. All three rise 3% a year from Year 2. None is set against a Kansas City price benchmark.
- The crematory fee passes through at cost. Direct costs are 34% of a direct cremation price ($542 in Year 1: the crematory fee, an alternative container, permits and certified copies, and card fees), 30% of a service price ($1,035, which adds room hire at the shared facility), and 42% of keepsake sales. Each pass-through item is itemized on the general price list.
- A direct cremation takes about 12 staff hours from first call to returning the ashes. A call with a service takes about 22. That averages 14.3 hours a call: about 2,200 hours in Year 1 and 8,300 in Year 5. Against average staffing at 1,750 hours per full-time equivalent, calls use 73%, 72%, 74%, 62% and 67% of paid time in Years 1 to 5. The rest covers nights, weekends and waiting.
- Marketing is $50,000 in Year 1, which is $12,000 of launch spend from start-up capital and $38,000 of running spend: $318 per call. It falls to $179 per call in Year 2 and $118 by Year 5 as search content and past families produce more of the calls. No money is paid for referrals.
- Payroll adds 27% to wages for payroll taxes, health cover, workers' compensation and a retirement match (15% for the part-time technicians). The founder's $78,000 matches the May 2025 median for funeral home managers ($78,790) and the arrangers' $60,000 sits above the median for funeral directors ($55,010), both from the Bureau of Labor Statistics. Annual pay raises of 3% are charged as a separate line from Year 2. Payroll is 41%, 37%, 34%, 40% and 37% of revenue.
- Families pay at arrangement by card or bank transfer, and some families assign a life insurance benefit that pays later, so receivables average 10 days. The crematory invoices monthly and is paid in 15 days. Urn and keepsake stock is held at 1% of sales, which turns over about 5.6 times a year.
- The office is about 1,400 square feet at $2,900 a month, covering rent and building charges, with utilities at $6,000 a year. A shared facility holds remains and hosts services under a $14,400 yearly retainer, with room hire for each service charged to direct costs. A second van is leased from Year 3 at $9,600 a year.
- Tax is charged at the 21% federal corporate rate and Missouri's 4% corporate rate. The model offsets the Year 1 loss in full against Years 2 and 3. Federal rules cap a loss carryforward at 80% of taxable income, so tax in those years would be somewhat higher, and the $24,200 of start-up costs carries no deduction in the model. Local taxes and a pass-through election are also left out, and an accountant would confirm all of them.
- Owner distributions of $30,000 and $45,000 are paid in Years 4 and 5, once retained earnings are positive. The loan runs to term.
Revenue by line of work
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Direct cremation (all-in price) | $196,185 | $366,848 | $527,269 | $662,302 | $767,442 |
| Simple services and gatherings | $117,300 | $237,018 | $360,154 | $452,389 | $553,328 |
| Urns, keepsakes and certified copies | $48,670 | $92,597 | $134,840 | $169,373 | $198,877 |
| Total revenue | $362,155 | $696,463 | $1,022,263 | $1,284,064 | $1,519,647 |
| Growth on prior year | – | 92% | 47% | 26% | 18% |
Direct cremation is 54% of Year 1 revenue and 51% of Year 5. Services carry more than twice the price and more staff time, and grow from 32% of revenue to 36%. Keepsakes hold at 13%. Year 2's 92% growth is mostly annualization: December 2027 runs at 22 calls, or 264 a year, against 290 in Year 2. Call growth then eases from 41% in Year 3 to 22% and 14%, a pace the plan sets by choice, since staff capacity is not the limit.
Calls and revenue in Year 1
| Month | Direct cremation (all-in price) | Simple services and gatherings | Urns, keepsakes and certified copies | Total revenue | EBITDA |
|---|---|---|---|---|---|
| Jan 2027 | $4,785 | $3,450 | $1,240 | $9,475 | ($17,601) |
| Feb 2027 | $7,975 | $3,450 | $1,860 | $13,285 | ($15,078) |
| Mar 2027 | $11,165 | $6,900 | $2,790 | $20,855 | ($10,066) |
| Apr 2027 | $12,760 | $6,900 | $3,100 | $22,760 | ($8,804) |
| May 2027 | $14,355 | $6,900 | $3,410 | $24,665 | ($7,543) |
| Jun 2027 | $14,355 | $10,350 | $3,720 | $28,425 | ($5,053) |
| Jul 2027 | $17,545 | $10,350 | $4,340 | $32,235 | ($2,530) |
| Aug 2027 | $19,140 | $10,350 | $4,650 | $34,140 | ($1,268) |
| Sep 2027 | $19,140 | $13,800 | $4,960 | $37,900 | $1,222 |
| Oct 2027 | $22,330 | $13,800 | $5,580 | $41,710 | $3,745 |
| Nov 2027 | $25,520 | $13,800 | $6,200 | $45,520 | $6,268 |
| Dec 2027 | $27,115 | $17,250 | $6,820 | $51,185 | $10,019 |
Calls rise every month, from four in January to twenty-two in December, so revenue climbs through the year. The monthly table spreads Year 1 costs evenly, so the arranger who starts in month 10 does not show in October to December. On that basis operating profit turns positive in September ($1,222) and reaches $10,019 in December. With the arranger's pay in October, those months would sit near break-even. The lowest month-end cash balance is Sep, at about $28,000, using monthly receivables of 10 days of revenue. The annual cash table uses average receivables and shows Year 1 closing cash about $8,500 higher than December on the monthly basis. Later years are spread evenly, so no winter peak is shown even though real call volume varies by season.
Staffing and on-call cover
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder and managing funeral director | $78,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| On-call removal technician (part time) | $26,000 | Month 1 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Funeral arranger (licensed funeral director) | $60,000 | Month 10 | 1 | 1 | 1 | 1 | 1 |
| Records and online-arrangements coordinator | $44,000 | Month 18 | – | 1 | 1 | 1 | 1 |
| Second on-call removal technician (part time) | $26,000 | Month 20 | – | 0.5 | 0.5 | 0.5 | 0.5 |
| Funeral service assistant | $40,000 | Month 33 | – | – | 1 | 1 | 1 |
| Additional funeral arranger (licensed funeral director) | $60,000 | Month 34 | – | – | 1 | 1 | 1 |
| Second senior funeral director | $64,000 | Month 41 | – | – | – | 1 | 1 |
| Total payroll incl. on-costs | $148,010 | $250,215 | $326,923 | $472,127 | $499,220 |
Denise handles every first call and arrangement in the opening months, with one part-time technician on call as the second person for removals. The licensed arranger joins in month 10, when monthly calls pass fifteen, so nights and weekends can be shared. The records and online-arrangements coordinator follows in month 18, a second part-time technician in month 20, a service assistant in month 33, an additional arranger in month 34 and a second senior funeral director in month 41. The hires run slightly ahead of need in Years 1 and 4, as the utilization table in the operating section shows. The part-time technicians count as half a head each and are paid $26,000 a year. Denise's $78,000 is already in the cost lines, so the profit figures are what remains after she is paid.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $362,155 | $696,463 | $1,022,263 | $1,284,064 | $1,519,647 |
| Direct costs (crematory fees, containers, permits, card fees) | ($122,334) | ($235,262) | ($345,316) | ($433,751) | ($513,330) |
| Gross profit | $239,821 | $461,201 | $676,947 | $850,313 | $1,006,317 |
| Payroll incl. on-costs | ($148,010) | ($250,215) | ($326,923) | ($472,127) | ($499,220) |
| Rent | ($34,800) | ($35,800) | ($36,900) | ($38,000) | ($39,100) |
| Utilities | ($6,000) | ($6,200) | ($6,400) | ($6,600) | ($6,800) |
| Marketing | ($38,000) | ($52,000) | ($58,000) | ($63,000) | ($67,000) |
| Insurance | ($14,000) | ($16,500) | ($19,000) | ($21,000) | ($22,500) |
| Professional fees | ($5,000) | ($5,500) | ($6,000) | ($6,000) | ($6,500) |
| Software subscriptions | ($9,000) | ($11,000) | ($13,000) | ($14,000) | ($15,000) |
| Shared facility retainer (holding, preparation, service space) | ($14,400) | ($15,000) | ($15,600) | ($16,500) | ($17,000) |
| Vehicle fuel, maintenance and registration | ($8,000) | ($11,000) | ($14,000) | ($16,000) | ($17,000) |
| Second van lease | $0 | $0 | ($9,600) | ($9,600) | ($9,600) |
| Licence renewals, continuing education and association dues | ($2,800) | ($3,300) | ($3,800) | ($4,200) | ($4,500) |
| Supplies, PPE and phones | ($5,000) | ($8,000) | ($11,500) | ($13,500) | ($15,000) |
| Equipment replacement and new-hire kit | $0 | ($3,000) | ($3,000) | ($8,000) | ($3,500) |
| Bad debt allowance | ($1,500) | ($3,500) | ($5,200) | ($6,200) | ($7,000) |
| Annual pay raises (3% a year) | $0 | ($7,506) | ($19,910) | ($43,779) | ($62,657) |
| EBITDA | ($46,689) | $32,680 | $128,114 | $111,807 | $213,940 |
| Depreciation | ($12,767) | ($12,767) | ($12,767) | ($12,767) | ($12,767) |
| Interest | ($10,381) | ($9,357) | ($8,042) | ($6,582) | ($4,961) |
| Income tax | $0 | $0 | ($11,603) | ($22,338) | ($47,405) |
| Net income before start-up costs | ($69,837) | $10,556 | $95,702 | $70,121 | $148,808 |
| Start-up costs expensed at opening (legal, licensing, launch marketing) | ($24,200) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($94,037) | $10,556 | $95,702 | $70,121 | $148,808 |
Year 1 loses $46,689 at EBITDA, $69,837 after depreciation and interest, and $94,037 after the $24,200 of start-up costs. Year 2 is the first profitable year at $10,556. EBITDA margin runs 4.7%, 12.5%, 8.7% and 14.1% from Year 2 to Year 5. Year 4 dips because the second senior funeral director starts in month 41, accumulated pay raises reach $43,779 and $8,000 goes to equipment replacement. Income tax is zero in Year 2 because the Year 1 loss is carried forward, and Year 3 tax of $11,603 is after the rest of that loss.
Cash movements
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($89,786) | $15,461 | $100,808 | $76,731 | $156,035 |
| Van, equipment and fit-out | ($72,500) | $0 | $0 | $0 | $0 |
| Funding received | $215,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | ($5,515) | ($11,935) | ($13,250) | ($14,710) | ($16,331) |
| Owner distributions | $0 | $0 | $0 | ($30,000) | ($45,000) |
| Net change in cash | $47,199 | $3,527 | $87,558 | $32,021 | $94,704 |
| Closing cash | $47,199 | $50,725 | $138,283 | $170,305 | $265,008 |
Year 1 closing cash is $47,199 on the annual receivables balance. Distributions wait until Year 4, when retained earnings have turned positive.
Balance sheet
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $47,199 | $50,725 | $138,283 | $170,305 | $265,008 |
| Accounts receivable | $9,922 | $19,081 | $28,007 | $35,180 | $41,634 |
| Urn and keepsake stock | $3,622 | $6,965 | $10,223 | $12,841 | $15,196 |
| Van, equipment and fit-out (net) | $59,733 | $46,967 | $34,200 | $21,433 | $8,667 |
| Total assets | $120,476 | $123,738 | $210,713 | $239,758 | $330,505 |
| Accounts payable | $5,027 | $9,668 | $14,191 | $17,825 | $21,096 |
| Bank loan | $94,485 | $82,550 | $69,300 | $54,590 | $38,260 |
| Paid-in capital | $115,000 | $115,000 | $115,000 | $115,000 | $115,000 |
| Retained earnings | ($94,037) | ($83,481) | $12,222 | $52,342 | $156,150 |
| Total liabilities and equity | $120,476 | $123,738 | $210,713 | $239,758 | $330,505 |
Per-call economics and break-even
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -12.9% | 4.7% | 12.5% | 8.7% | 14.1% |
| Net margin (before start-up costs) | -19.3% | 1.5% | 9.4% | 5.5% | 9.8% |
| Payroll incl. pay raises as share of revenue | 41% | 37% | 34% | 40% | 37% |
| Revenue per full-time equivalent at year end | $144,862 | $174,116 | $170,377 | $183,438 | $217,092 |
| Average monthly revenue | $30,180 | $58,039 | $85,189 | $107,005 | $126,637 |
| Monthly revenue needed to cover operating costs | $36,055 | $53,926 | $69,066 | $92,935 | $99,715 |
| Debt service cover (EBITDA / interest + principal) | -2.9x | 1.5x | 6.0x | 5.3x | 10.0x |
The last two rows of the ratios table compare average monthly revenue with the revenue needed to cover operating costs. Year 1 averages $30,180 against $36,055 needed. At $2,307 a call that is 15.6 calls a month needed against 13.1 handled. Year 2 turns the other way: 22.5 calls needed against 24.2. Year 5 needs 37.4 against 47.5. Debt service cover is negative in Year 1 and 1.5x in Year 2, then above 5x from Year 3.
A 20% shortfall in calls
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $289,724 | $557,170 | $817,810 | $1,027,251 | $1,215,718 |
| Net income before start-up costs | ($90,389) | ($9,268) | $45,353 | $45,924 | $94,647 |
| Net income after start-up costs | ($114,589) | ($9,268) | $45,353 | $45,924 | $94,647 |
| Closing cash | $28,350 | $13,625 | $52,365 | $91,422 | $178,073 |
This case cuts every revenue line by 20% in every year, which means 126 calls in Year 1 and 456 in Year 5. The response has five parts: every hire from month 13 starts six months later, the second senior funeral director is dropped, marketing is cut by 20% in line with the fewer calls, Denise takes a 20% pay cut and no distributions are paid. A deeper marketing cut would risk the search and referral work that supplies later calls. With those steps the firm closes every year with cash of at least $13,625 and is profitable from Year 3. Within Year 1, month-end cash on the monthly receivables basis bottoms at about $19,000 in November. Year 1 equity ends at $411 and dips to about ($8,900) in Year 2, so a net-worth test, if the bank adds one, would be at risk; Denise would raise it with the bank before any covenant date. Without the response, the same 20% shortfall takes cash to about ($86,200) by the end of Year 2 and the firm could not meet its loan payments.
Sources
Source pages were read during a 2026 review. Each publisher's own date applies, and rules and figures may have changed since.
- Federal Trade Commission, Complying with the Funeral Rule, and FTC Funeral Rule (consumer page dated July 2012). The rule itself is 16 CFR Part 453.
- Missouri Revised Statutes, section 333.061, funeral establishment licences.
- Missouri Board of Embalmers and Funeral Directors, Division of Professional Registration (the Board's rules are in 20 CSR 2120). Cremation authorization rule, Department of Health and Senior Services: 19 CSR 10-10.100, listed but not reviewed.
- National Funeral Directors Association, statistics, 2025 Cremation & Burial Report.
- Bureau of Labor Statistics, Funeral service occupations, Occupational Outlook Handbook, May 2025 wage data and 2025 to 2035 projections.
- Missouri Department of Revenue, corporate income tax: 4% for tax years beginning on or after 1 January 2020.
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