How to Start a Human Composting Business
When You Want More
Starting a human composting business may sound a bit outside the box—or in this case, outside the casket—but in the growing end-of-life services industry, you’ll be on the forefront of a growing movement. On a daily basis, humans are becoming more cognizant of our effect on the environment. Now we have the option of “going green” even when we die.
Below, we’ve done the legwork for you to provide a free guide to starting a human composting business today.
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What Does a Human Composting Business Do?
A human composting business operates in much the same way a regular funeral home does, arranging for after-life care while offering those left behind an opportunity to say goodbye to their loved one in a meaningful and human way. The end results are just different. Instead of a body in a casket or ashes in an urn, human composting employs a process called “natural organic reduction,” which over time turns human remains into soil.
The idea of composting human remains returns us to a time when burial was a much more natural process. Before the 1800s, and for most of all human history, our bodies were simply placed in the ground, either in a fabric shroud or wood box. Preserving bodies for burial really didn’t start until the 1800s, out of which grew the burial industry that we know today. At its most basic, a human composting business offers the the bereaved the option of returning the body of a loved one to the earth in a more natural, more affordable, and more environmental way.
Steps to Starting a Human Composting Business
Create a Business Plan for Your Human Composting Business
Before you get started, you’ll need an idea of what resources you’ll need—and how to monetize your business in a practical way. We’ve answered the biggest questions about clients, costs, and profits below.
Who is the target audience?
Your target audience is going to be people who are both price and environmentally conscious. According to a report from the National Funeral Directors Association, today, more than 50% of the deceased in the United States are cremated, up from an industry-estimated rate of just 4% in the 1960s. This is partially because cremation is less expensive than a regular casket burial. A full-service funeral can cost upwards of $10,000, whereas human composting services run just $5,500. While cremation is the cheapest option, coming in at about $2,000 to $3,000, many Americans have expressed a desire to leave a smaller environmental footprint. It has been estimated that cremation is not as green as many think. The process involves heating a furnace to 2,000 degrees for up to two hours, which by some estimates produces about the same emissions as driving 500 miles in a car. In contrast, natural organic reduction needs only time and leaves behind only soil.
Washington and Colorado are the only states that allow human composting (both California and Oregon are exploring the industry), so your audience will be limited to people in those states, or people willing to transport a body to your facility. It should be noted that the popularity of cremation in both Washington and Colorado is higher than average, which means that alternative end-of-life choices are already quite popular there, which may point to a willingness to explore human composting as an end-of-life option.
How does a human composting business make money?
There’s more to the end of life than just a funeral. Money is made in a variety of ways, all of it service related. Most funeral homes offer an array of services, from body transport, embalming, burial ceremonies, chair and sound system rental, pamphlet printing, casket and urn sales, and so much more. A human composting business would not necessarily be able to offer all of these services, but the gist is that money is made by offering grieving families compassionate, comprehensive services for all their needs at a time when they may need the most help.
With 10,000 Baby Boomers turning 65 every day, a forward thinking entrepreneur would plan for more than just a one-off human composting service. A full-service end-of-life company can offer a myriad of services such as helping the family in closing bank accounts, archiving social media photos, placing memorials on social media accounts, turning off automatic app payments, and generally helping the grieving family wind up the deceased’s affairs. These are all potential revenue options for your business.
How much money will it take to get started?
Starting your own human composting business isn’t cheap. Whereas the average funeral home startup costs runs about $300,000, Seattle-based Recompose, the only company currently offering the service, raised $4 million dollars to get their concept off the ground. One would imagine that the second and third entries into the industry would have lower startup costs, as Recompose has already done the heavy lifting of proving the concept, and lobbying Washington to pass SB 5001, which has made the process legal.
What kind of capital outlay cost can a human composting business anticipate?
You’ll need a significant physical investment, from an office, to a meeting space, a showroom, on-site refrigeration, refrigerated transport vehicles, all the way down to actual compost facilities, and beyond. You’ll also have to budget for rent, labor costs, utilities, and marketing. The good news is, unlike traditional funeral homes that have to spend big bucks on caskets, embalming equipment, or cremation facility maintenance, human composting has few moving parts. Besides refrigeration and basic maintenance of the facility, the heavy lifting is done by the process of natural organic reduction.
You will need some space though. Consider contacting a real estate agent to find an affordable building to rent or purchase where you can operate your composting business. Again, human composting is currently limited to Washington and Colorado, and the building will need to meet each state’s particular guidelines for funeral homes and crematoriums. Commercial real estate can be pricey in certain areas of each state.
What salaries are typical for this industry?
Because human composting is so new, there isn’t any information out there regarding salaries and earnings for the industry. It may make sense to look at normal funeral service salaries. A non-managerial employee can earn around $47,000 per year according to Glassdoor, while managers and owners of busy establishments can earn close to six figures.
A human composting business may be more affordable to run, as you won’t need all the moving parts of hiring employees to manage all that goes along with the modern American funeral home. The Recompose model simply places the body into a bin (they call it a cradle) and let nature do the rest of the work. Fewer moving parts may mean your business can operate with minimal staff, which can save your business money when it comes to payroll.
How much do human composting businesses make each year?
While the technology and idea is relatively new, the US death care industry is a $21 billion dollar a year behemoth. As the Baby Boom generation ages, expectations are that after life care and all that it encompasses could surpass $40 billion or more. If Recompose and other human composting businesses can capture only a fraction of that industry, there is no telling what profits might be in store.
How much should I charge?
The current rate to compost a body in a state sanctioned facility is $5,500, which should serve as a guide to figuring out your price. Cremation, which averages $3,000, is still less expensive, but remember, it is nowhere near as “green,” compared to proper natural organic reduction. A traditional funeral with all the bells and whistles can run anywhere from $8,000 to $10,000.
Select a Name for Your Human Composting Business
While a funny business name may work for a coffee shop or dog grooming business, when dealing with death, you’re going to want to select a name that is comforting. For example, words like “dove” or “sunset” are common for names within the funerary industry. Before you start marketing and branding your business, you’ll need to ensure your name is available. Most states prohibit or restrict businesses from adopting names that are already in use. Even if it’s legally allowed, a copycat name puts your business at risk of a lawsuit.
See if your business name is available in your state with our Free Business Name Search.
Trademarks and Domain Names
Plan to trademark your business name? You can see if the trademark is available on a website like Trademarkia. It’s also a good idea to see if the domain name is available, which you can do on websites like Network Solutions and GoDaddy. Even if you don’t plan on putting together a website right away, you can buy the domain name to make sure no one takes it in the meantime.
Choose a Business Structure
While Washington law RCW 68.20.010 only allows for corporations to operate cemeteries, other funerary practices, including funeral homes, crematories, alkaline hydrolysis facilities or natural organic reduction facilities have no such entity restrictions. This means that in Washington you can form whatever entity best fits the needs of your human composting business. Should you form an LLC? A sole proprietorship? Your choice of business structure will affect many aspects of your business, from liability to taxes.
Sole Proprietorships & General Partnerships
If you don’t file any paperwork to legally form a different kind of business—you have a sole proprietorship or general partnership. Essentially, these are “default” business structures. A sole proprietorship has one owner, and a partnership has multiple owners.
These structures have a few initial benefits. They’re easy, fast and cheap to start and maintain. However, the limitations and risks of these business structures quickly become more apparent as your business grows. In both of these business types, you are your business, legally speaking. Your company’s legal business name is YOUR name—so you’ll need a DBA to operate under any other name. Any business debt is YOUR personal debt. If anyone sues your business, they are suing YOU personally.
LLCs & Corporations
Limited liability companies (LLCs) and corporations are business entities formed at the state level. The entity is legally separate from its owners, meaning the owners are not personally liable for the debts and obligations of the business. As a separate entity, the business also has multiple tax election options. For example, both LLCs and corporations can choose to be taxed as S-corps if they meet the requirements.
LLCs and corporations are not quite as simple and inexpensive as default structures. LLCs and corporations come with formal requirements like state reports. They also have more fees than default structures, such as formation and annual report fees. However, the benefits of an LLC or corporation—especially liability protection and tax flexibility—are significant.
Legally Form Your Human Composting Business
If you opt for a sole proprietorship or general partnership, there’s no formal paperwork to file to legally create your entity—you just start selling your product or service. However, you will not have anyliability protections or tax flexibility. It will also be significantly more difficult to raise capital, and startup costs for any funerary business can be steep.
LLCs and corporations are formed by filing paperwork with a state agency, typically the Secretary of State. To start an LLC, you file articles of organization. To start a corporation, you file articles of incorporation. In most states, you can file these forms online or download a paper form from the state’s website.
Whether you’re forming an LLC or corporation, your articles will require certain basic information about your business, such as your company’s:
- business address
- registered agent and office
- business purpose
- members/managers or directors/officers’ names and addresses
- number and type of authorized shares (for stock corporations)
You’ll also need the signature of someone authorized to sign on behalf of the business, along with the state’s filing fee. Fees vary by state but are typically between $100 and $200. If you hire Northwest to form your LLC or corporation, we complete and submit your formation paperwork on your behalf for just $100 plus state fees.
Create Internal Policies and Procedures
It’s important to put your company’s internal policies and procedures in a written document, especially if you’re starting your business with others. Partnerships have partnership agreements. LLCs have operating agreements. Corporations have bylaws.
These documents look a bit different for each kind of business, but they serve the same general purpose. They ensure there’s a clear path forward for any major issue that may arise, from changes in ownership to closing the business. LLCs and corporations also typically need an operating agreement or bylaws in order to open a bank account.
Get an EIN and Register for Taxes
Nearly all LLCs and corporations will need to request a federal employer identification number (EIN) from the IRS. If you file corporate income taxes, have employees, or file certain franchise taxes, you must have an EIN. An EIN is also a common requirement for opening a business bank account. Most businesses can request an EIN by filling out the IRS’s online form.
Your EIN is for federal taxes—but you’ll likely have state and local tax obligations as well. You will most likely need to set up an account with the state’s Department of Revenue, and you may need to apply for a state tax ID or a sales tax license as well.
Learn more about how to Get an EIN for your business.
Open a Bank Account
A business bank account keeps your personal finances separate from your business finances. For LLCs and corporations, keeping separate finances is essential for maintaining liability protection. To open an account, LLCs and corporations typically need to bring to the bank a copy of their articles, their operating agreement or bylaws, and their EIN.
Obtain Licenses, Permits and Insurance
Many businesses will need a business license to operate. Licensing information—as well as any zoning requirements or other permits—can usually be found on the city or county website.
Since Colorado just passed their human composting law, we’ll focus on Washington statues. Washington’s natural organic reduction law follows guidelines for crematoriums, and must be performed by a licensed operator in a licensed facility. The Washington State Department of Health has also created guidelines specific to the industry that govern soil testing, heat thresholds, and disbursement. Your facility will be inspected on an annual basis, which means you’ll need to make sure your business has properly obtained all of the appropriate permits and licenses.
To obtain the required license and permits you’ll need to first apply for a Washington Funeral Director license. The initial fee is $100 for the application, and a $150 annual renewal fee ($185 if filed late). Once you have obtained this license, you can apply for a Funeral Establishment license, which costs $400 for the initial license, and $325 to renew on an annual basis. Your final step is to pay $210 for a Crematory Operator license. The annual renewal fee is $8 per cremation, or in your case, per natural organic reduction. If your human composting business can perform 120 organic reductions per year, you will have to budget $960 to renew your license.
Human composting creates an entire cubic yard of “soil” per person, which is enough to fill up the bed of a pickup truck. Families can choose to have you dispose of the soil in a designated area, or they can use it as they see fit, often at the wishes of the deceased. Since you’ll want to cover all your bases, you will need to apply for a “Final Disposition of Human Remains” permit, which allows you to handle the human compost, and dispose of it if a family does not want to take possession. The cost for this permit is $70, and will need be renewed annually.
If you plan to offer body transport services (most funeral homes do), you will need to apply for a burial transit permit on a case by case basis. For example, if you are transporting a body from King County, the cost for a permit is $70. It should also be noted that Funeral Directors in Washington are required to complete five hours of continuing education every year. The exams are online, and once passed, you will be able to immediately download and print your completion certificate, which will need to be kept on hand at your place of business.
Next Steps for Your Human Composting Business
After your business is up and running, there are a few additional steps you may want to take as you grow:
- Get online: With your domain name, you can create a business website. You can hire a professional or use a website-builder like Wix or WordPress. You may also want to invest in online ads through a program like Google Ads.
- Hire employees: Hiring employees requires quite a few steps. You’ll need to collect W-4s and I-9s from employees, report the new hires to the state, set up withholding, pay for unemployment insurance, distribute any required documents and notices to employees, and display wage and safety info in the workplace. Employer.gov is a good place to start, followed by your state’s tax or labor office.
- Get business insurance: While LLCs and corporations protect you from personal liability, you don’t want your business to go bankrupt in the face of an accident, injury or other disaster. At minimum, it’s a good idea to look into general liability insurance.
Is a Human Composting Business Right for Me?
What’s it really like to work in a human composting business?
Logistics is the name of the game. When a death occurs, your business has only a few days to get everything lined up; from registering the death with the appropriate authorities, to transporting the body, to meeting with the bereaved family and deciding on funeral services, to finally placing the body in the cradle to begin the organic reduction process. The goal is to offer a full-service experience. By handling the complicated logistics, you not only put your customers at ease, but can also charge a premium price for your services. Daily routines run the gamut from mundane paperwork and office maintenance, to social media marketing, and the more intense, but very important job of turning the bodies in their cradle to help speed organic reduction. A human composting business is not a 9 to 5 gig. People don’t stop dying during the holidays, or when you’re sick, or on vacation. You’ll need to staff appropriately, with an eye toward compassionate employees who can stomach the work load, both mentally and physically.
In many ways, working at a human composting business is like working any other job that requires human interaction. The overall goal is to serve your customers as best as you can, it just so happens that you are seeing them at a time when they are at their most vulnerable. You work to guide them into making the best decisions for their deceased loved one, and you hope that at the end of the day, you’ve done right by the customers and the business.
What does it take to succeed in the world of human composting?
Empathy, compassion, and diversification. You’re not selling cars or magazine subscriptions, and this is not the place for the “hard sell.” Death is a fact of life, and the job of anyone who works in this industry is to provide a service at the appropriate price in order to keep your business humming along. As we’ve mentioned earlier, end-of-life businesses make their money by diversifying their services in order to provide a simple purchasing experience for the bereaved family. Your human composting business will need to look beyond just turning bodies into soil, and keep its eye on the myriad of services one might offer in order to increase the bottom line while also offering a compassionate solution to the families of the deceased, and the deceased themselves.
Ready to Form an LLC or Corporation?
Northwest Registered Agent is here to help with all your small business ideas and needs. Answer a few simple questions about your business, and we’ll prepare and submit your formation paperwork to the state. We also provide your new business registered agent service, free business forms and guides, and much more.