Want to Run a Funeral Business? Then You Must Know This

Want to Run a Funeral Business? Then You Must Know This

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In South Africa, the funeral industry operates through two channels – independent companies and franchises. The two franchise players are Martins Funerals with a footprint of 167 nationwide and Franchise Association of South Africa member, 21st Century Funerals with a footprint of 25 nationwide and no longer recruiting franchisees. The largest independent funeral service provider is Doves with around 156 branches around the country.

A Martins Funerals franchise costs from R700 000 with a hearse costing around R300 000. This includes start-up stock. Royalties are paid on gross monthly turnover at 7%, working on a sliding scale. The franchise contract is renewable after ten years and full training and ongoing support is included.

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The cost of running a fully functional private funeral home

“Most people think that the funeral business is an easy way to make money, but it isn’t,” says Theo Rix, MD of Independent Crematoriums of SA.

He says the cost to set up a fully functional crematorium in South Africa is around R7 million.

A cremation furnace costs around R1,5 million and you need at least two to run a profitable business. Other costs include smoke extractors and their installation, protective clothing for radiant heat, and so on.

The business opportunities around death 

Sub-contracting

“A funeral director is in fact an events manager, but one who doesn’t have as much time to organise an event,” says Dr Chris Molynex, past president, National Funeral Directors Association Southern Africa.

 

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Funeral directors sub-contract services such as catering, fresh flower arrangements, rental of tents and chairs, transport for mourners, tombstones, coffin name plates and wreaths, music, tributes, casket lining, trimmings and customised handles.

Coffin making

In South Africa a coffin should be manufactured to SABS standards. Coffins are generally made from wood, while caskets are produced from wood or metal. Most importantly, a coffin must be sturdily constructed in order to protect the dead and safeguard the health of the living, which is why the SABS has set strict standards.

There is a growing demand for coffins and training centres where coffin making is taught. Courses are available throughout South Africa and they provide the necessary practical knowledge to start a coffin and casket manufacturing business. Online business, coffins.co.za, was formed eight years ago due to the huge demand for affordable funeral products.

Emerging Trends

Eco-burials: Dust to dust

For more than 20 years around the UK, natural burial grounds have been springing up across the country. People are buried in biodegradable containers, without formaldehyde-based embalming fluid or synthetic ingredients, and returned to the earth to compost into soil nutrients with a forest of trees marking the spot. It’s an idea that’s taking off in Australia, New Zealand, the US, Europe and South Africa too.

It is estimated that in the US alone more than 60 000 tons of steel and 4,8 million gallons of embalming fluid are buried each year. That is enough steel to build eight Eiffel Towers and fluid to fill eight Olympic size swimming pools, according to researchers from Cornell University.

The environmental impact of ‘full-service’ burial, including a casket, vault, tombstone, and flower wreaths, is considerable. Most cemeteries now have little space for native plant or animal life. The danger of mercury and particulate emissions from crematoriums is also a concern.

People who choose green burials don’t use concrete vaults, traditional coffins with metalwork or any embalming chemicals. Instead, the body is wrapped in biodegradable shrouds or placed in a pine coffin and laid to rest where it can decompose and become part of the earth.

Other options are available for green caskets, often called ecoffins. These can be made of bamboo, pine, woven willow, recycled cardboard and even cord from dried banana plants.

Green burials can be less expensive than conventional funerals because they don’t incur the costs of embalming, metal or expensive wooden caskets.

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A typical start-up

Consider a typical existing upmarket funeral home based in Johannesburg:

  • Sales revenue: R4 million
  • Cash flow: R1,2 million
  • Employees: Seven
  • Hearses: Three
  • Leasehold rent: R108 000 p/a
  • Size of the premises: 300m2

Are you the right person for the job?

Starting a funeral home is not for everyone. Here are some points to consider:

  • Funeral directors must be able to work at odd times of the day
  • A person running a funeral home should be an excellent communicator and a good listener
  • You need a good understanding of and respect for various cultures, traditions and religions
  • You must be emotionally strong and not shaken by other people’s distress.
Tracy Lee Nicol
Tracy-Lee Nicol is an experienced business writer and magazine editor. She was awarded a Masters degree with distinction from Rhodes university in 2010, and in the time since has honed her business acumen and writing skills profiling some of South Africa's most successful entrepreneurs, CEOs, franchisees and franchisors.Find her on Google+.