How do I start a Funeral Service Business?

How do I start a Funeral Service Business?

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Starting your on funeral parlour business follows the exact same procedure as starting any business, but you will need a Certificate of Competence. To begin, choose a business entity, i.e. Sole Proprietorship, Closed Corporation or Private Company.

Before you start a business you need to register with the South African Revenue Services, Employees tax (PAYE), Value-Added Tax (VAT) and Unemployment insurance fund (UIF).

Certificate of Competence

Government regulations state that a Certificate of Competence must be applied for in order to open funeral parlour. Before you submit an application for a Certificate of Competence, you must publish two notices in two different official languages in newspapers that circulate in the area in which such premises are situated.

This must be done 21 days before submitting the application. The applicant makes an application for a Certificate of Competence in writing to the Local Authority in whose area of jurisdiction the funeral undertaker’s premises will be situated.

The application must be accompanied by-

  • A description of the premises and the location
  • A complete ground plan of the proposed construction or of the existing buildings on a scale of 1:100
  • A block plan of the premises on which north is shown indicating which adjacent premises are already occupied by the applicant or other persons and for what purpose such premises are being utilised or are to be utilised
  • Particulars of any person other than the holder or any of his employees who prepares or will prepare corpses on the premises.
  • Subject to the provisions of regulations R 237 of 8 February 1985, no person is allowed to prepare any corpse except on a funeral undertaker’s premises in respect of which a Certificate of Competence has been issued and is in effect.

Dealing with other issues

As a funeral home owner, you will have to deal with various insurance providers. It is important that you understand how funeral insurance cover works. Your staff must know how to assist the family in claiming the policy. Other matters you must have knowledge of are:

  • Registration of Death
  • Purchasing of Graves
  • Cancelling of Identity Documents
  • Arrangements with Church and Minister
  • Crematorium protocol
  • Health Department documents

The Basics

How much capital is required?

To find out how much capital you will need and to determine what infrastructure is required can only be established through research. There is no fixed formula that will tell you how much money you need to set up a business.

The amount needed to establish a funeral home depends on what you intend to offer: viewings, professional charges, transportation expenses. Other charges may be required for cremation, graveside funerals, obituary announcements, online memorial programs, assistance in the procurement of mandatory paperwork such as death certificates permits and so on. Every funeral home should have an itemised price list.

How to write a business plan

For more information on how to write a comprehensive business plan, read Entrepreneur’s guide: How to Write a Business Plan: Step-by-Step Guide. Sample Business Plans: For more information on what should be included in your business plan. Refer to one of our sample plans for guidelines.

Research the market

This is why you have to do research into the market, speak to funeral home owners, and ask questions such as how many mortuaries are in the area? What is the cremation rate versus burials? The most important step to take is to write your own business plan.

In doing research, you need to study the market in the area in which you are panning to operate your business. Services offered must be geared towards the needs of the community. Figure out what your competitive advantage is over the other funeral homes. This will help you prepare your marketing strategy, which is necessary in every business plan.

Marketing strategy

A solid marketing strategy is the foundation of a great marketing plan. You need to create and execute an effective marketing strategy that will take your service to the next level. This includes writing a marketing plan, conducting a SWOT analysis, and implementing your marketing plan.

Facts and stats

For the most recent research, facts and stats pertaining to the funeral industry contact The Funeral Academy for Africa (FAfA) and Independent Crematoriums of SA.

A Guide to Crematoriums

How to start a crematorium

Equipment

Cremation units have to be built to exacting quality and safety standards and are not manufactured in South Africa. These units are all imported and one unit, without emission systems or installation, costs in the region of R1.2million.

Set up costs

“The cost to set up a fully functional crematorium in South Africa is around R7million”, says Theo Rix, Managing director of Independent Crematoriums of SA. “Most people think that this is an easy way to make money, but it isn’t,” he says.

“It can take up to two years to get the necessary permits and permission from local municipalities and Government authorities. “ Because the paperwork is so extensive, we don’t attempt to do it ourselves. We employ attorneys to get the process going on our behalf,” says Rix. Rix explains that to make one unit viable you will have to cremate more than 60 bodies a month. “Location is crucial as you don’t want to be too near another crematorium. The recommended cost per cremation is R1000 (excluding the urn and the service),” says Rix.

Regulations

To open a new crematorium business you would need to apply for a licence through your local municipality. There is no fee, but the application requires a great deal of work and preparation on your part. Further, you will also need to contact the Cemetery Board of the local municipality as well as the Department of Environmental Health to gain permission.

More information

If you don’t have a background in crematory services, you will need to familiarise yourself with it. If you need more information, contact Independent Crematoriums of SA on 021 447 1150.

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  • Manama

    Good day, what happens if my funeral policy insurer business closes, do I claim the paid premiums? do I loose everything I have paid until the issue of notice. The insurer has given me an option to find another service provided and I will remain covered until the other cover waiting period is completed without paying further premiums to them.
    Please advise if there is a legal action I can consider in this situation.
    Thanks,