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Starting a Business in MA: The Ultimate Guide

Nina Godlewski

Staff Writer at Fundera
Nina is a staff writer at Fundera where her goal is to help make complex business topics more accessible for small business owners. She was previously a staff writer at Newsweek covering technology, science, breaking news, and culture. She’s also worked as a reporter for Business Insider and The Boston Globe. Nina has a degree in communication studies from Northeastern University. Email: nina@fundera.com.

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Editorial Note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone.

Starting a business is a huge task, and if you’ve decided to start a business in Massachusetts, you might be wondering where to start. With so many moving parts, it’s no surprise that you may be asking yourself how to start a business in Massachusetts. 

We’re going to go over all of the steps you should take in order to officially become a business owner in Massachusetts. 

Steps to Starting a Business in Massachusetts 

Starting a business can seem like a daunting task and takes plenty of time and patience, but by following the steps in this guide you’ll know just what to do. 

1. Decide What Type of Business to Start and Choose a Name

Before you can get into the specifics, you have to know what you’re working toward. You likely already know what type of business you want to open, but if you’re still deciding or defining the scope of your business, make sure this is squared away first. After all, this will impact all of the subsequent work you do.

When choosing a business type, do some research around what kinds of businesses are already in existence in the area of Massachusetts where you plan to open your business. In other words, you need to make sure there’s a demand for your business’s products or services—if not, you might be setting up an operation that is doomed from the start. Of the small businesses that fail, 42% of them fail due to a lack of demand that leads to a lack of cash flow. 

You should also choose a business name at this time. A good business name will be unique and memorable, while also describing what type of business you’re operating. Of course, the most important factor is that it’s available to use. You can check to see if the business name is available online at the Secretary of the Commonwealth of Massachusetts website. You should also perform a Google and trademark search as well to find out if your domain name is available. If it is, you should reserve it, as well as the social media handles for your future business accounts, as soon as possible.

starting a business in MACredit: State of Massachusetts

2. Choose a Business Entity

The next thing for you to decide on is which business entity you want to structure your business as. The business entity you choose has tax and other legal implications for your business, so choose wisely. If you aren’t sure which one you should pick, consider consulting with a business attorney.  

Some popular options are sole proprietorships, partnerships, LLCs, and corporations. While some of these entities are easier to set up than others (you don’t need to register a sole proprietorship), don’t just choose the simplest option. Your business may demand a more complex entity, or it may offer benefits that make it the better choice for you.

3. Write a Business Plan

Now that you have your business and its name and entity decided, you’re ready to write your business plan. Writing a business plan is one of the most important steps you have to take in order to start a business in MA. 

This plan should include everything from your business’s structure and key members, to what products and services you’ll offer, to an in-depth market analysis, to financial projections and how you’re going to fund your business. 

While writing a business plan is an involved process, it’s vital to your business’s success. Not only will you reference this plan often during the development stage of your company, but if you look for funding, investors, or a business plan down the road, they’ll want to see a strong business plan. To make the process easier, you may decide to use a business plan template

4. Register Your New Business

In the state of Massachusetts, some businesses have to be legally registered with the state. Remember back in the first step when you made sure that the business name you wanted for your business was available? That’s because you’ll now have to register your business with that name. You’ll register your business with the Massachusetts Secretary of the Commonwealth by filing some forms and paying a nominal fee. You must do this before conducting business in the state. 

Of course, not every type of business needs to be registered. If you opted for a sole proprietorship or general partnership, you likely won’t have to register. However, if you want to conduct your business under a name other than your own, you’ll need to file a “doing business as” or DBA name. To get this  DBA certificate you’ll have to go to the city or county clerk’s office where your business will be operating and file for one before you start operating your business under this name. 

5. Apply for an EIN

Another form for you to fill out when starting a business in Massachusetts will be to get an employer identification number (EIN). While this will be required for some types of businesses, including any that plan on hiring employees, an EIN isn’t necessary for every single business. 

However, there are a number of benefits of getting an EIN that make it a smart decision for any business. Those benefits include making it easier to open a business bank account, file your business taxes, speed up business loan applications, and more. It’s also easy to obtain, so it’s worth applying for early on. 

You can apply for an employer identification number directly from the IRS and it’s completely free. The EIN will act as a social security number for your business. 

starting a business in MACredit: IRS

6. Get Any Licenses or Permits

In order to legally operate your business in Massachusetts, you’ll also need to obtain any licenses or permits required at the local, state, and federal levels. You can check the professional licenses and permits necessary for Massachusetts on the state’s website. The types of licenses you’ll need will largely vary based on the type of business you’re starting. Some industries that require licenses include cosmetology, health care, construction, real estate, transportation and more.

Not all businesses require licenses, so if you’re wondering if you need a business license, you should take some time familiarizing yourself with the rules of your industry, as well as consult a business lawyer familiar with your type of business. 

Even if your business isn’t in a highly regulated industry, you may need licenses and permits depending on signage for your business, the physical location in which you’ll operate, whether you have employees, if you handle food or alcohol, and more. It can be a complicated process but don’t cut corners here. Failing to obtain the proper licenses or permits before you open for business could mean hefty fines.

7. Open a Business Bank Account and Credit Card

When you’re starting a new business you’re going to be spending and making money—and that means you’ll need a bank account to handle these transactions. Especially when your business is just starting out, you may not see the need to have separate business accounts, but it’s important that you keep your business finances and your personal finances separate by having a business bank account

Keeping your finances separate will make it easier for you to do your taxes, apply for business loans if you ever need to, and keep your finances in order. Not to mention, this clear separation can help protect your personal assets if your business runs into any legal trouble.

Beyond a bank account, you should also open a business credit card to use for business-related expenses. Having separate business finances that you handle responsibly will also help build your business credit score, which will make you a more attractive candidate for funding down the line. 

8. Get Funding

Starting a business in Massachusetts—or anywhere—is an expensive endeavor. You likely won’t be funding your new business all on your own, in which case you’ll need to find funding. Luckily, there are plenty of options for you to explore when it comes to funding your business. For new businesses, you’ll have to get a little more creative—since you don’t yet have the business history to prove to lenders that you’re responsible with your finances. Some options you may want to explore include business grants, SBA microloans, loans from friends and family, and even a 0% introductory APR credit card.

Once you’ve been in business for a year or two, more traditional business loan options will be available to you. Bank loans, SBA loans, lines of credit, and more are some of the best loan options around, but you’ll need a successful financial track record and proven revenue in order to apply. But, with a healthy business bank account and history of paying your vendors on time, you’re sure to have built up strong credit to be able to apply for these loans when the time comes. 

The Bottom Line

In deciding to start a business you’ve already taken one of the biggest steps to success. But there’s a long road ahead and while these steps to starting a business in Massachusetts may seem daunting, completing them will set you up nicely for business success. 

Keep in mind that it’s always best to check in with a business attorney or other professional for anything you’re unsure of, especially around the registration and licensing processes. It’s better to do everything right the first time around so you don’t hit any snags later down the road that might cause your business problems—especially in the form of costly fines.  

Nina Godlewski

Staff Writer at Fundera
Nina is a staff writer at Fundera where her goal is to help make complex business topics more accessible for small business owners. She was previously a staff writer at Newsweek covering technology, science, breaking news, and culture. She’s also worked as a reporter for Business Insider and The Boston Globe. Nina has a degree in communication studies from Northeastern University. Email: nina@fundera.com.

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