How To Start A Business In Massachusetts: The Ultimate Guide, Step-by-Step

Massachusetts is ranked the second best state for access to venture capital. Little wonder why a lot of entrepreneurs want to know how to start a business in Massachusetts.

The state’s economy supports the growth of small businesses till they become very large and successful brands. And this makes it a great location choice for entrepreneurs.

Conversely, starting and building a business can be difficult irrespective of the location. This is because the requirements for starting out often differ in different states.

And if you want your business to succeed, you have to put in every little detail into consideration.

So, this article will show you the different steps to take when you want to start a business in Massachusetts.

The Big Bay State has a lot of rules and regulations you must follow if you want your business to suceed.

But first, lets consider the people and city of Massachusetts.

About Massachusetts

Massachusetts is the most popular state in the United State. Its capital, Boston, is also the most populous city in the New England region of the United States.

Originally, Massachusetts was dependent on agriculture, fishing and trade. Then, after the industrial revolution, it was transformed into a manufacturing center.

Now, the city of Massachusetts is a global leader in biotechnology, engineering, higher education, finance, and maritime trade.

Interesting facts about Massachusetts

Also known as the “Bay State,” Massachusetts has some interesting facts about it.

Below are some of them.

  • Massachusetts is known for its many colleges and universities, including Harvard University.
  • Massachusetts has the highest percentage of residents with a college degree in the nation.
  • Health services employ the most people in the state
  • Massachusetts was the first state to legalize gay marriage and the second to pass anti-discrimination laws for those who identify as lesbian, gay, or bisexual.
  • Massachusetts was home to the first railroad (1826) and the first subway (1897) in the U.S.

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Are there business opportunities in Massachusetts?

Of course, there are business opportunities in Massachusetts. In fact, the economy if the state is supports the growth of small businesses.

The United States Bureau of Economic Analysis estimates that the Massachusetts gross state product in 2017 was $527 billion.  The per capita personal income in 2012 was $53,221, making it the third-highest state in the nation.

More so, as of January 2021,  Massachusetts state general minimum wage is $13.50 per hour while the minimum wage for tipped workers is $5.55 an hour.

CNBC’s list of “Top States for Business for 2014” has recognized Massachusetts as the 25th-best state in the nation for business, and for the second year in a row, the state was ranked by Bloomberg as the most innovative state in America.

More so, tourism plays a great role in the economy of Massachusetts. In fact, it is the sixth most popular tourist destination for foreign travelers.

Manufacturing isn’t left out, as it contributes about 10% of the states gross product. This includes the manufacture of medical devices, paper goods, specialty chemicals and plastics, telecommunications and electronics equipment, and machined components.

Agricultural products such as cranberries, sweet corn and apples are the largest sectors of production.

The more than 33,000 nonprofits in Massachusetts employ one-sixth of the state’s workforce.

In February 2017, U.S. News & World Report ranked Massachusetts the best state in the United States based upon 60 metrics including healthcare, education, crime, infrastructure, opportunity, economy, and government.

The Bay State ranked number one in education, number two in healthcare, and number five in the handling of the economy.

All of these show that Massachusetts is a great place for anyone who wants to start a business there.

Its economy is a progressive one and supports the growth of small businesses.

What Business Can I do in Massachusetts?

Since Massachusetts has an economy that supports the growth of small business, its very easy to think that anything you start will automatically grow.

However, that’s not the case. As there are specific businesses which the sooil of the state supports entirely.

Below is a list of businesses you can start in Massachusetts.

#1. Food truck

Starting a food truck in Massachusetts is a low-investment business option. You don’t need a lot of things. Just an old truck and few types of equipment, then you’re good to go.

Moreover, food truck business has high potential in the state.

#2. Business Consulting Firm

If you have the expertise, you can offer business consulting services to small businesses in Masachusetts.

#3. Berry Farming & Export

Massachusetts is known to love cranberries. I fact, it is the second-largest state to produce cranberries.

So, you can choose to grow cranberries and export to other states. The market for this is already established.

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#4. Customized Tour Services

Asides cranberries, another thing Massachusetts is known for is tourism. In fact, its a major contributor to the state’s economy.

You can offer customized tour services to foreigners as a tour guide.

#5. Travel Agency

Since Massachusetts is a popular tourist center, these tourists often need services from travel agencies like ticketing, booking, currency exchange and more.

#6. Cab Service

Massachusetts and its capital Boston, are one of the most populous cities in the United States. Hence, starting a cab service is one business that wouldn’t run out of customers.

As long as there are lots of people, the business can retain its cash flow.

#7. Advertising Agency

Another business you can start in Massachusetts is an advertising agency. The city is home to lots of people and businesses.

So, you can take advantage of this market by running advertisements for these businesses for the people to see and be aware of.

All of these are viable businesses you can start in Massachusetts. There are others, but these are the most viable business option.

How to Start A Business in Massachusetts

Before you start a business in Massachusetts, there are some key steps you must take to ensure the overall success of your business.

Below are the steps before you start a business in Massachusetts.

#1. Choose a Business Idea

The first step to starting a business in Massachusetts is to choose a business Idea.

There are lots of business ideas to try. In fact, the economy of the state supports businesses to grow. But, that’s not an excuse to go for all the business ideas available.

Instead, look for ideas that suit your interests, your natural abilities, and your personal goals. It will help you stay motivated on days when business isn’t going so well.

Some business ideas you can start include; Drive-in theatres, barber shop, car repair shop, convenience store, and grocery store.

However, if you are still clueless about which business idea you want to start, you might want to go online. Read this post on 200+ Online Business Ideas That Can Make You Wealth in 2021. You’d definitely find one that suits you.

#2. Plan your business

The next step to starting a business in Massachusetts is to plan your business. You already have a business idea, so the next right thing to do is to plan how you will bring that business idea into reality.

Furthermore, this is where you will critically analyze your idea to be sure its viable.

Here is a list of parameters to check.

Business Name

Having a business idea is one thing, then choosing a name is another. In naming a business, you would want to choose something that can be easily remembered by your customers, and follows Massachusetts naming rules.

Don’t forget to develop your business logo and business cards alongside your business name. It makes you look professional and serious to do business.


Next is what does your business offer. What problems does your business solve? What is the unique selling point of your business from your competitors?


Now, its time to let the citizens of Massachusetts know the solution your business will bring. And to do this, you need to figure out a way to first get their attention. Afterward, think of how you will convert them to buyers, and then to loyal customers.

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You most likely can’t handle your business alone. So for what roles will you need to hire people? To move your business to the next level, what partnerships do you need to form? What relationships would you need to create to make this happen?

Financial Planning

How much money will it take to achieve your business goals? How much sales or clients do your need in other to get to that point of success? This is where you figure that out.

#3. Choose a business structure

The next step to follow is to form your business. A lot of businesses grow to a tremendous point and then get hit with heavy taxes or charges.

These taxes can cripple the company’s finances and even force them out of business if they are not careful.

However, these issues can be avoided when there is a powerful protection from legal issues.

This is why it is advised that you register your business first. For most small businesses, registering as a Limited Liability Company (LLC) is a good option.

LLC’s are easier to set up and manage, and they have favorable tax conditions. In Massachusetts, you can set up your business as an LLC for $500.

If you choose not to register your business, you will be held for any issues that may arise.

Conversely, while battling to register your business offline, you can go ahead and secure your domain (your business name available as a website domain name).

Even if you don’t want to build a website, you can go ahead and buy the domain to prevent others from getting it.

#4. Register for Taxes

Taxes are compulsory for citizens and employees in the U.S. With limited exceptions, most businesses need an Employer Identification Number (EIN), also known as a Tax ID Number.

With an EIN, you can identify a business in its federal tax filings. However, without an EIN, you can’t hire employees or open a business bank account.

Specifically, in Massachusetts, there are several other taxes that you should be aware of that should apply to your business.

  • If you are selling a physical product, you should 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. 

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#5. Set Up Business Accounts

According to eCareers, 75% of companies fail within the first 18 months. While poor management or the lack of market penetration many cause many failed startups, a good number of them fail because of poor financial planning.

So, before you start your business, use a dedicated business banking and credit account solution for it. Don’t make the mistake of combining your personal accounts/assets with your business account. You risk them being used in the business.

Hence, protect your business by opening a business bank account, and getting a business credit card.

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#6. Set Up Accounting

A cure for poor financial planning would be the use of an accounting system. An accounting system aids you to track the performance of your business and simplifies annual tax filings.

Quality accounting software allows you to download your bank and credit card transactions, making accounting fast. With these strategies in place, you’ll be on top of your accounts every time.

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#7. Obtain State License and Permits

Without a license, you cannot successfully operate a business. You will consistently fall out with the government and regulatory agencies.

To operate your new business legally and successfully, you will need to comply with federal, state, and local government rules and regulations.

Use this section, to ensure that you’re up to date.

#8. Get Insurance

Business insurance helps you manage risks and focus on growing your business.

All small businesses including home-based businesses must 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.

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#9. Define Your Brand

A brand separates you from your direct and indirect competitors in the business world.

When you create a brand, you build a customer loyalty bond which will continue to bring more people to your business.

While developing your brand, ensure you consider everything your business stands for, which includes your core values.

This will help you create a business that is specifically targeted to your consumers.

#10. Promote Your Business

After you have created a brand, the next thing you should be concerned about is promoting your business.

There are different advertising channels that you can use to promote your business. The most popular one is social media. Maximize all social media platforms, to ensure your brand gets to the front of your consumers.

Press releases are not left out, as they are also a great way to promote your goods to your consumers.

#11. Establish a Web Presence

You may not understand it now, but a website is very crucial to the success of your business.

Everyone first searches online for the things they need before asking questions. So, if you want your customers to find you easily, consider establishing a website.


Its not enough that you have a business idea, or you think that Massachusetts is a good place to start a business. You have to understand the “how” and know which steps to take.

Regardless, I hope this articles teaches you all you need to know on “how to start a business in Massachusetts”

All the best!


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