To Start a Business in Massachusetts, follow these steps:
Step 1: Choose the Right Business Idea
The first step toward business ownership is deciding what kind of business to start. Look for an idea that suits your interests, your personal goals, and your natural abilities. This will help you stay motivated when the going gets tough and will greatly improve your odds of success. Need inspiration? Here were the most popular ideas among our Massachusetts visitors in 2017:
Find the Right Business Idea for You
Our free Business Ideas Generator will help you identify great businesses that match your interests and lifestyle.
Step 2: Plan Your Business
Successful businesses are built through careful planning. Before committing a significant amount of money and other resources toward your business, critically analyze your idea and create a game plan. At a minimum, you should have good answers to the following questions.
Naming a business can be challenging. You'll want to choose a brand name that follows Massachusetts naming rules, resonates with your customers, and is available as a URL.
What problem does your business solve? What will set your product or service apart from the competition?
Sales & Marketing
Who are your potential customers? How will you get their attention and convert them into buyers?
People and Partnerships
What roles will you need to hire and what professional relationships will you need to form in order to succeed?
How many clients or sales will you need in order to break even? How much money will it take to get there, and where will you get the funding?
- Create a robust business plan to help navigate the early years of your business. To use this free tool sign up for the Business Center.
- Need Help? Find organizations in your local area that can assist you with planning.
- If you’re a solo-entrepreneur, setting up a virtual office can add credibility to your business by having a business address on Google search, protect your personal privacy, and provide you with a business phone line and a live receptionist to answer your calls. Save $200 on a virtual office today.
- If you’re a woman in business, find funding, tools and resources with this great new series Women in Business.
Step 3: Form Your Business
Registering your Massachusetts company as a legal business entity, such as an LLC or a Corporation, has two major advantages:
- Increased credibility
- Protection from personal liability in the event your business is sued
For most small businesses, registering an LLC is a great option. In comparison to other business entities, LLCs are easier to set up and manage and they have favorable tax treatment. You can set up an LLC in Massachusetts for $500.
Form an LLC in Massachusetts
If you choose not to register your company as a business entity, you will be held personally responsible for the debts and liabilities of your business. In addition, unregistered business owners may need to file a Trade Name, also known as a "DBA." Find out if your business is required to file a DBA.
Secure Your Domain
We recommend that you check online to see if your business name is available as a web domain. Even if you don't plan to create a business website today, you may want to buy the URL in order to prevent others from acquiring it
Not sure what to name your business? Check out our Business Name Generator.
Step 4: Register for Taxes
With limited exceptions, most businesses require an Employer Identification Number (EIN), also known as a Tax ID Number. An EIN is used to identify a business in its federal tax filings. Without an EIN, you can't hire employees or open a business bank account.
You should also be aware of important massachusetts taxes that may apply to your business:
- If you are selling a physical product, you’ll typically need to register for Massachusetts Sales Tax.
- If you hire employees, you will have to register for Unemployment Insurance Tax, and Employee Withholding Tax on behalf of your employees.
Step 5: Create Business Banking and Credit Accounts
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
You can protect your business with these two steps:
1. Opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Read our Best Banks for Small Business guide to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Recommended: BlueVine is an online bank with free business checking and no hidden fees. Great for businesses who do not often deal with cash.
2. Getting a business credit card:
- Helps you separate personal and business expenses.
- Builds your company's credit history, which can be useful to raise capital later on.
Step 6: Set Up Accounting
An accounting system helps you track the performance of your business and simplifies annual tax filings. Quality accounting software lets you download your bank and credit card transactions, making accounting fast and easy. Learn more about the importance of accounting and how to get started with accounting today.
Recommended: QuickBooks has all the accounting features your small business will need.
Step 7: Obtain Permits and Licenses
To operate your new business legally, you will need to comply with federal, state, and local government regulations. In many cases, this involves obtaining one or more business permits and/or licenses. For example, a restaurant will likely need health permits, building permits, signage permits, etc.
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Step 8: Get Insured
Business insurance helps you manage risks and focus on growing your business. The most common types of business insurance you should consider are:
We recommend that all small businesses, including home based businesses, purchase a general liability policy. Businesses selling professional advice or services, such as consulting and accounting firms, should also consider a professional liability policy. In Massachusetts, businesses with one or more employees, excluding business owners, are required by law to have workers compensation insurance.
Our recommended insurance provider can set you up with an insurance policy that is right for your business
Step 9: Define Your Brand
The strongest and most memorable businesses are built on a solid brand.
When developing your brand, think about what your business stands for. What are the core values that drive your business? Customers and clients are looking for companies that have a compelling brand, as much as they are shopping for high-quality products and services.
Your business name is the cornerstone of good branding and a successful business. To learn more about creating the best name for your business, read our How to Name a Business guide.
Creating a logo for your business is vital for increasing brand awareness. You can design your own unique logo using our Free Logo Generator. Our free tool can help you design your own unique logo for your new business idea.
Step 10: Establish a Web Presence
A professional website is critical to the long-term success of your business, regardless of what industry you are in. A website allows potential customers to find your business online and discover the products or services you offer, and it also enhances your business’s credibility.
In addition to a website, you should also consider other avenues for promoting your business online:
- Setting up social media profiles (Facebook, Twitter, etc)
- Creating accounts on review sites (Yelp, Google Reviews, etc)
- Registering for a local Google profile
Massachusetts Formation Guides
- Cost to Form an LLC in Massachusetts
- How to File LLC Articles of Organization in Massachusetts
- Massachusetts LLC Operating Agreement
- Massachusetts LLC Name Search
- How to Choose a Registered Agent in Massachusetts
- How to Dissolve an LLC in Massachusetts
- Massachusetts LLC Annual Report
The City of Boston Small Business Center
Here are the Principle Service Areas:
Accepts Walks In
The Small Business center through the City of Boston has mentors who entrepreneurs can meet with one-on-one, hosts workshops on various business topics, and allows for networking with other entrepreneurs after its events. All workshops are free and registration is not needed but encouraged.
See more business resources in Boston
Springfield Technology Park
Here are the Principle Service Areas:
The Springfield technology park is really three resources in one. The Business Growth Center is the resource most entrepreneurs will have access to. As the name implies, it is where entrepreneurs can go to receive advice and to connect with other entrepreneurs. The Scibelli Enterprise Center is functionally an incubator/coworking space. For Incubator members, the center offers a customized team of mentors to help start and grow your business. The Springfield Technology Park is actually a massive 15.3 acre, 300,000 square feet incubator for technology companies. It has an on-site cafeteria, 24/7 security, and ample parking.
The Springfield Technology Park is restricted to technology-oriented companies, other organizations have no such restriction.
See more business resources in Springfield
Worcester Business Development Corporation
Here are the Principle Service Areas:
- Business Planning
- Legal Assistance
The WBDC is a development corporation that assists businesses in navigating the various legal issues that come with starting a business, such as construction management, state and local permits, environmental assessment and remediation, etc. They also assist entrepreneurs in creating a business plan and are an SBA 504 Loan lender.