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How do I start a Funeral Service Business?

A guide to starting a business in the funeral industry.

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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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1 Comment

1 Comment

  1. Manama

    Oct 2, 2013 at 20:00

    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,

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Start-up Industry Specific

How To Start A Farming Business

Keep these nine points in mind when launching your new farming business.

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How Do I Start A Transport Or Logistics Business?

An all in one guide to starting a transport and logistics business.

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transportation

Thinking about starting a transport business?

Forecasts indicate that the demand for freight transport will grow in South Africa by between 200% and 250% over the 15 to 20 years.

Some corridors, (high volume transport routes that connect major centres), such as the corridors between Gauteng and Cape Town (which amount to 50% of all corridor transport) will increase even faster.

The scope in the transport and logistics industry is varied – from a one-man show using a small truck to transport goods and offer services, to a fleet of transport vehicles which travel the length and breadth of South Africa’s roads.

Road transportation includes commuter transport from taxis to bus transportation.

It can be a tough industry and there are many threats facing transport businesses but if you get it right, you can build a successful business.

What is covered in this guide:

  1. How to start your transport and logistics business
  2. How to get funding for your transport business
  3. What are the costs involved
  4. Finding customers and getting transport contracts
  5. Getting onto suppliers lists
  6. Buying trucks and employing drivers
  7. What are the regulations and risks
  8. Where to find guidance to start your business.

Ready to get going? Click the arrow button to learn how to start your own transport business.

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How does one go about starting a distribution business? Or how do you become a seller for an international company locally (SA)?

How to register an international product nationally.

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17-feature-image-how-does-one-go-about-starting-a-distribution-business-or-how-do-you-become-a-seller-for-an-international-company-locally-sa

If you already have a particular product you are thinking of distributing, your best option would be to contact that company and find out what the requirements are to distribute their products. Each company will have different criteria.

Here is some advice however on starting a wholesale distribution business:

So you want to start a wholesale distributorship. Whether you’re currently a white-collar professional, a manager worried about being downsized, or bored with your current job, this may be the right business for you. Much like the merchant traders of the 18th century, you’ll be trading goods for profit.

And while the romantic notion of standing on a dock in the dead of night haggling over a tea shipment may be a bit far-fetched, the modern-day wholesale distributor evolved from those hardy traders who bought and sold goods hundreds of years ago.

The Distributor’s Role

As you probably know, manufacturers produce products and retailers sell them to end users. A can of motor oil, for example, is manufactured and packaged, then sold to automobile owners through retail outlets and/or repair shops.

In between, however, there are a few key operators-also known as distributors-that serve to move the product from manufacturer to market. Some are retail distributors, the kind that sell directly to consumers (end users).

Others are known as merchant wholesale distributors; they buy products from the manufacturer or other source, then move them from their warehouses to companies that either want to resell the products to end users or use them in their own operations.

Three types of operations can perform the functions of wholesale trade: wholesale distributors; manufacturers’ sales branches and offices; and agents, brokers and commission agents. As a wholesale distributor, you will probably run an independently owned and operated firm that buys and sells products of which you have taken ownership.

Generally, such operations are run from one or more warehouses where inventory goods are received and later shipped to customers.

Put simply, as the owner of a wholesale distributorship, you will be buying goods to sell at a profit, much like a retailer would. The only difference is that you’ll be working in a business-to-business realm by selling to retail companies and other wholesale firms like your own, and not to the buying public.

This is, however, somewhat of a traditional definition. The traditional wholesale distributor is still the one who buys “from the source” and sells to a reseller.

Getting Into the Game

The field of wholesale distribution is a true buying and selling game-one that requires good negotiation skills, a nose for sniffing out the next “hot” item in your particular category, and keen salesmanship. The idea is to buy the product at a low price, then make a profit by tacking on an amount that still makes the deal attractive to your customer.

Experts agree that to succeed in the wholesale distribution business, an individual should possess a varied job background. Most experts feel a sales background is necessary, as are the “people skills” that go with being an outside salesperson who hits the streets and/or picks up the phone and goes on a cold-calling spree to search for new customers.

In addition to sales skills, the owner of a new wholesale distribution company will need the operational skills necessary for running such a company. For example, finance and business management skills and experience are necessary, as is the ability to handle the “back end” (those activities that go on behind the scenes, like warehouse setup and organization, shipping and receiving, customer service, etc.).

Of course, these back-end functions can also be handled by employees with experience in these areas if your budget allows.

Setting Up Shop

When it comes to setting up shop, your needs will vary according to what type of product you choose to specialize in. Someone could conceivably run a successful wholesale distribution business from their home, but storage needs would eventually hamper the company’s success.

Starting Out

For entrepreneurs looking to start their own wholesale distributorship, there are basically three avenues to choose from: buy an existing business, start from scratch or buy into a business opportunity. Buying an existing business can be costly and may even be risky, depending on the level of success and reputation of the distributorship you want to buy.

The positive side of buying a business is that you can probably tap into the seller’s knowledge bank, and you may even inherit his or her existing client base, which could prove extremely valuable.

The second option, starting from scratch, can also be costly, but it allows for a true “make or break it yourself” scenario that is guaranteed not to be preceded by an existing owner’s reputation. On the downside, you will be building a reputation from scratch, which means lots of sales and marketing for at least the first two years or until your client base is large enough to reach critical mass.

The last option is perhaps the most risky, as all business opportunities must be thoroughly explored before any money or precious time is invested. However, the right opportunity can mean support, training and quick success if the originating company has already proven itself to be profitable, reputable and durable.

During the startup process, you’ll also need to assess your own financial situation and decide if you’re going to start your business on a full- or part-time basis. A full-time commitment probably means quicker success, mainly because you will be devoting all your time to the new company’s success.

Like most startups, the average wholesale distributor will need to be in business two to five years to be profitable. There are exceptions, of course. Take, for example, the ambitious entrepreneur who sets up his garage as a warehouse to stock full of small hand tools.

Using his own vehicle and relying on the low overhead that his home provides, he could conceivably start making money within six to 12 months.

Operations

A wholesale distributor’s initial steps when venturing into the entrepreneurial landscape include defining a customer base and locating reliable sources of product. The latter will soon become commonly known as your “vendors” or “suppliers.”

The cornerstone of every distribution cycle, however, is the basic flow of product from manufacturer to distributor to customer. As a wholesale distributor, your position on that supply chain (a supply chain is a set of resources and processes that begins with the sourcing of raw material and extends through the delivery of items to the final consumer) will involve matching up the manufacturer and customer by obtaining quality products at a reasonable price and then selling them to the companies that need them.

In its simplest form, distribution means purchasing a product from a source-usually a manufacturer, but sometimes another distributor-and selling it to your customer. As a wholesale distributor, you will specialize in selling to customers-and even other distributors-who are in the business of selling to end users (usually the general public).

It’s one of the purest examples of the business-to-business function, as opposed to a business-to-consumer function, in which companies sell to the general public.

Weighing It Out: Operating Costs

No two distribution companies are alike, and each has its own unique needs. The entrepreneur who is selling closeout T-shirts from his basement, for example, has very different startup financial needs than the one selling power tools from a warehouse in the middle of an industrial park.

Regardless of where a distributor sets up shop, some basic operating costs apply across the board. For starters, necessities like office space, a telephone, fax machine and personal computer will make up the core of your business. This means an office rental fee if you’re working from anywhere but home, a telephone bill and ISP fees for getting on the internet.

No matter what type of products you plan to carry, you’ll need some type of warehouse or storage space in which to store them; this means a leasing fee. Remember that if you lease a warehouse that has room for office space, you can combine both on one bill. If you’re delivering locally, you’ll also need an adequate vehicle to get around in.

The Day-to-Day Routine

Like many other businesses, wholesale distributors perform sales and marketing, accounting, shipping and receiving, and customer service functions on a daily basis.

They also handle tasks like contacting existing and prospective customers, processing orders, supporting customers who need help with problems that may crop up, and doing market research (for example, who better than the “in the trenches” distributor to find out if a manufacturer’s new product will be viable in a particular market?).

To handle all these tasks and whatever else may come their way during the course of the day, most distributors rely on specialized software packages that tackle such functions as inventory control, shipping and receiving, accounting, client management, and bar-coding.

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