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In times of grief, the people we interact with can help lighten the heavy burden. Funeral service businesses, also known as funeral homes or funeral parlours, are one of the most important points of contact for those experiencing a loss.
If you’re considering a career where you can extend compassion and support to those in need, starting your own funeral service business might be the right path. However, launching a funeral service business requires more than just understanding and sympathy – to build a successful operation, you must ensure your business is set up the right way.
Keep reading to learn more.
What Do Funeral Service Businesses Provide?
Whether someone has just lost a loved one or is planning for their own arrangements, funeral service businesses typically provide services such as:
- Funeral planning
- Burial and cremation services
- Live streaming and online access to services
- Embalming and body preparation
- Casket selection
- Memorial services
- Obituary writing and notifications
- Repatriation services
- Obtaining death certificates and closing accounts
As a funeral service business, it’s important to establish the range of services you will offer and ensure that these are clearly communicated to your clients. Keep in mind that you will need to consider different beliefs and cultural practices when providing funeral services – it’s crucial that your business is prepared and equipped to meet the diverse needs of your clients.
A Legal Guide To Starting A Funeral Service Business In Australia
The most effective way to be well-prepared is to do thorough research and pay attention to the details. Starting a funeral service business isn’t something to be rushed into; it’s crucial to understand both the industry and the legal landscape that affects it. By doing so, you’ll be equipped to handle each step of the process as you build your business. Below, we’ve outlined a few key steps you need to take when starting a funeral service business in Australia.
Create A Funeral Service Business Plan
A business plan is the blueprint for your business. Without a good business plan, it’s easy to lose your way or forget important information that’s relevant to your business. A business plan ideally covers everything that is necessary to your funeral services business. This includes matters such as financial plans, intellectual property, competitor research, market analysis, long term goals and marketing strategies.
When all the necessary information is in the one place, it can be much easier to stay focused on your business goals. If you’d like to learn more about creating a business plan for your funeral services business, check out our article: How To Start Writing A Business Plan
Choose A Business Structure For Your Funeral Service Business
An important decision you will make when starting your funeral service business is deciding the legal structure of your business. The legal structure for your business will lay the foundation for your funeral services business and impacts almost every element of your business, so it’s necessary to make a choice that’s best for your business. In Australia, the most commonly registered business structures are a sole trader, partnership and a company. Let’s take a closer look at them below.
Sole Trader: A sole trader business is generally for people who want to be the exclusive owner and operator of their business. Sole traders businesses generally allow you to have full control over the business and are much easier to set up, as they only require applying for an Australian Business Number (ABN) online and registering a business name; however, they are always going to be legally attached to you. A lack of legal separation between you and your funeral services business can be a high risk, especially if your business is ever facing financial or legal trouble.
Partnership: A partnership business is also legally tied to all the partners involved. The lack of legal separation between the business and its partners means that all partners share equal liability for the business’s debts and obligations. Setting up a partnership is relatively simple — you just need to apply for an ABN and register a business name. However, it’s advisable to take the additional step of creating a Partnership Agreement. Establishing clear rules and processes for the partnership can help minimise the risk of disputes, ensuring the business runs more smoothly.
Company: A company is a legal structure that offers the most protection because it provides limited liability for its owners. This is possible because a company is a separate legal entity, meaning it can operate independently from its owners. A company can enter into contracts, generate profits, and purchase property on its own behalf. Importantly, a company’s legal issues and debts are its own, which helps protect your personal assets.
If you consider your funeral services business a serious venture, setting up a company may be the right option. However, establishing a company is more complex than other business structures. You will need to decide on the type of company to set up, how it will be governed, and who the key officeholders will be. A legal expert can assist with registering your company with the Australian Securities and Investments Commission (ASIC) and ensure you understand the rules and regulations necessary to run your funeral services company successfully.
Key Contracts For Your Funeral Service Business
Once you’ve set up your funeral services business, it’s important to think about the contracts that will help protect it. Like any other business, a funeral services business is open to risk. Getting the right contracts in place can help manage these risks by communicating rights and obligations, securing revenue streams, limiting liabilities and protecting confidentiality.
A few contracts to consider getting drafted include:
- Service Agreement
- Non-Disclosure Agreement (NDA)
- Privacy Policy
- Workplace Agreement
- Employment Agreement
These legal agreements play an important role in keeping your funeral service business safe. Properly investing in them and getting them catered to meet the specific needs of your business is important, so we always recommend working with a legal expert to get the necessary contracts sorted.
Licencing And Permits: What Do I Need To Start A Funeral Service Business?
In some Australian states, you need to obtain a funeral director’s licence to open and operate a funeral service business. States that require this licence will have their own specific qualifications, standards, and procedures that need to be met. Be sure to do your due diligence and secure your funeral director’s licence before opening your funeral service business to the public.
In addition to a funeral director’s licence, you will need a cemetery and crematorium licence if you plan to offer those services. Again, you’ll need to check with your state authority to understand the requirements for obtaining a cemetery and crematorium licence.
It’s also important to determine whether any local council registrations and permits are needed to open your business or carry out business activities. Every local council has different rules, so make sure you comply with the regulations that apply to your locality.
Having the necessary licences and permits in place before starting your business activities is crucial. Failing to do so can lead to legal consequences, which is never good for business
Essential Legal Requirements For Starting A Funeral Service Business
Legal compliance is another important factor to consider when starting a funeral service business. Australian Consumer Law (ACL) regulates the funeral service industry by setting certain standards that every funeral service business must follow.
The Funeral Information Standard is a set of regulations under ACL that outlines specific practices funeral service businesses must engage in to protect consumer rights. Given that people typically engage with funeral services during vulnerable times, the Funeral Information Standard ensures consumers are not taken advantage of and that funeral businesses operate in line with ACL standards.
The Funeral Information Standard covers matters such as:
- Clear Disclosure of Prices
- Itemised Quotes
- Transparency of Third-Party Costs
- Provision of Standardised Information
- Online Disclosure Requirements (where applicable)
Beyond the Funeral Information Standard, it’s essential for your funeral service business to comply with other ACL regulations, employment law, data privacy laws, work health and safety standards, and any other applicable regulations. Consulting with a legal expert can provide clarity on the specific regulations that affect your business, so don’t hesitate to reach out.
Key Takeaways
There’s various legal considerations to think about when starting a funeral service business, it’s to do your research and seek expert legal help. To summarise what we’ve discussed:
- Starting a funeral service business requires thorough preparation and legal compliance. Funeral services include planning, burial, cremation, body preparation, memorials, and more, with a need to accommodate various cultural practices.
- Creating a solid business plan and choosing the right business structure (sole trader, partnership, or company) are key early steps
- Legal structures like companies offer more protection, but involve more complex setup processes, including governance and officeholders
- Important contracts for a funeral service business include service agreements, NDAs, and employment agreements to manage risk
- Obtaining the required licences, including a funeral director’s licence and cemetery/crematorium licences (where applicable), is crucial for compliance
- Legal compliance involves adhering to the Funeral Information Standard, ACL, employment law, privacy laws, and local council regulations
If you would like a consultation on starting a funeral service business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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