You might think because you’ve got the skills, resources, and multimillion business ideas you can just start any type of business without proper guidance. Well, when you choose to start a business in Pennsylvania, the story changes.
Generally, every state has Step-by-Step business procedures that must be followed to the latter before you can run any business.
The understanding and implementation of these steps is the first step to building a long-lasting business empire!
That’s why for people who want to start a business in Pennsylvania, it’s expedient they have a proper guide on to go about it before anything else.
So, if you’re interested in building a business in this USA state, reading this article will give you detailed information on how to Start a Business in Pennsylvania including some new and interesting facts about the state.
Why Start a Business in Pennsylvania
According to World Population Review, Pennsylvania has a lot to give, which might explain why it is the sixth most populated state in the US.
The state’s friendly atmosphere for entrepreneurs and small businesses is one of Keystone State’s attractions. Small businesses account for 99.6% of all businesses in Pennsylvania and employ almost half of the workforce.
All of these factors and many more are the reasons Pennsylvania made it to the top list of places to visit or start anything new in the United States.
Let’ talk about the other reasons briefly!
The state’s Economics is Favorable
The state has a favorable economy which makes it easy for any startup business to survive. According to Forbes, the cost of doing business in Pennsylvania is 5.8% which is below the national average.
The State Boast of High Quality of Life
The state has a low and affordable cost of living. According to U.S. News & World Report, Pennsylvania is ranked 18th in the country among affordability, the only New England or Mid-Atlantic state that ranked in the top 25.
Business-friendly Policies and Laws
Small companies have benefited from business-friendly policies and regulations that have helped them thrive in the market. Steel, agriculture, and financial services continue to be major employers in the state.
Amazing Facts About Pennsylvania
Pennsylvania, also known as Keystone State and Chocolate Capital of the United States has amazing facts that distinguish it from other USA states.
First, the state with its capital at Harrisburg was founded in 1643 with over 12,000,000 population. The state has 67 counties and 10 major cities which have/ over 45,000 population each.
Some other interesting things about the state that will amaze you include:
What are the Business Opportunities in Pennsylvania?
Pennsylvania has a very segmented business environment comprising of different businesses across sectors.
If you wish to start a business in Pennsylvania in the United States, here’s a list of profitable business opportunities in Pennsylvania you can fit into once you have the skills:
- Freelance Writing
- Mushroom Farming
- E-commerce Business
- Online Coaching
- Babysitting
- Interior Design Consulting
- Travel Consulting
- Landing Page Specializing service
- Social Media Service
What are the Startups that were Form in Pennsylvania?
Considering the fact that the state has friendly business policies and laws, many businesses including startups have been able to survive, spreading through wings across many other states and nations at large.
For 2022, the following are the list of business and tech startups in Pennsylvania:
How Much Does it Cost To Start a Business in Pennsylvania?
To start a business in Pennsylvania, you will likely have to pay application and licensing fees. To obtain a Pennsylvania LLC Certificate of Organization, for example, costs about $125.
Additional fees might be required if your business is structured as a corporation, sole proprietorship, or partnership.
Does Starting a Business in Pennsylvania Require a License?
Well, not every business in Pennsylvania needs a license. However, there are some businesses in the state that will require you to get one or more licenses or permits before you can operate. While some are regulatory, others cover health, safety, sales tax, and the environment.
These licenses and permits are not issued by one agency. different state agencies are in charge of issuing these licenses.
What Type of Business Should I Start in Pennsylvania?
In setting up a business in Pennsylvania you must first ask yourself, What type of business do I want to start?
Though this question might look simple, if you don’t have full knowledge of the type of businesses that exist in the state and the ones that are worth going for, you might make the wrong decision.
Remember, that a particular type of business is existing and booming in a state, doesn’t necessarily mean that it will boom in another state. This is why it’s expedient that you have a handful of information about the trending businesses in Pennsylvania that you can start.
Below are the types of business structures in Pennsylvania that you can organize your new business, along with a brief description of each.
Sole Proprietorship
This is also known as a one-man business. In this type of business, the owner is different from the business. To start this business, the owner called sole proprietor is required to register with their local county clerk’s office for registration under the Assumed Name Act.
A Limited Partnership
This type of business in Pennsylvania comprises a general partner and limited partners. The partners do not take part in the day-to-day activities of the business.
Limited Liability Company
This is the non-corporate form of doing business that provides its owners with limited liability, flow-through tax treatment, and operating flexibility through participation in the management of the business.
Limited Liability Partnership
In this type of business structure, partners are not liable for the debts, obligations, and liabilities of the business.
Corporation
This is a distinct legal entity and is the most complex form of organization. A corporation may sell shares of stock, which are certificates indicating ownership, to as many people as is desirable.
Step-by-Step Guide on How to Start a Business in Pennsylvania
When you want to start up a business in Pennsylvania, there are a few key steps you must follow to start and run a profitable business. These steps include:
#1. Get Business Idea
Choosing what type of company to start is the first step toward being a business owner. Look for a concept that aligns with your passions, personal ambitions, and natural abilities.
Also, consider your skills, resources at hand, availability, and the reasons why you want to form a business.
This will keep you focused when things get difficult and increase your chances of success significantly.
And when you have finally chosen one, double-check the merit behind your business idea by asking yourself these four questions:
To get started, scroll up to see the list of some business idea opportunities I’ve compiled and make a pick right away!
#2. Write a Business Plan
The next step to take is to get a solid and feasible business plan. The easiest way to ascertain the success of any business even before it is formed is through its planning process.
If you don’t plan, there is every tendency that you will fail in the business no matter your skills and available resources.
So, it’s expedient that before you invest or start any business, you create a plan. The plan serves as a road map that will lead you through the journey!
Business Name
It can be difficult to come up with a company name. You’ll want to choose a brand name that complies with Pennsylvania naming guidelines, is memorable to your clients, and can be used as a URL.
Hence, when you consider the above obligations, you would pick a name that you and your target market can easily memorize. To do this effectively, you can
- Check Google For Easy Names To Pronounce
- Research companies with easy names
- Perform a domain search
- Complete an LLC search
Note, if you want to form a Limited Liability Company, you must have “Limited Liability Company” attached to your company’s name. You must also avoid certain words and phrases like “corporation,” “Corp.,” “incorporated,” “Co.,” “Inc.,” “Ltd.,” and “LP.
If you are forming a corporation, the words “corporation,” “incorporated,” “company,” or “limited” must be included but separate from the other words in your business name.
Development of New Products
What is the dilemma that your company solves? What would make your product or service stand out from the crowd?
Also, consider cost, testing, and analysis when discussing product development. Would the manufacturing process be too costly? Can you make a profit or will you be digging yourself into a hole?
Sales & Marketing
Find out about your target market; people who would be interested in what you will be selling and how you turn them into customers.
People and Partnerships
What roles will you need to hire and what professional relationships will you need to form in order to succeed?
Financial Planning
This should be the major part of your planning process. Check whether you will have enough capital to pay for rent, subscription fees for business tools, payroll, marketing, and other expenditures.
Decide how many clients or sales you will need in order to break even.
#3. Form Your Business
Once you’re done planning, the next step is to form your business. This is where registering your business as a legal entity comes in.
Registering your business helps improve credibility and also helps protect you from personal responsibility.
Basically, forming a business depends largely on the type of business. That is to say that business formation varies. On this note, I will be giving you insight into how to form a business.
How to File a DBA in Pennsylvania
To form DBA is also called “sole proprietorship”, “Doing Business As”, or a “Fictitious Name”, you must follow the steps below:
- Check your business name by calling the County Recorder or visiting their website.
- Obtain the forms from the county to register your DBA. Each county has its own specific filing requirements, but most accept the online filing options found here.
- File the forms with the County. Some counties require the form to be notarized and published.
How to Form an LLC and a Corporation in Pennsylvania
Creating an LLC is a perfect choice for most small businesses. LLCs are simpler to set up and administer than other company organizations, and they have preferential tax treatment. To form an LLC ensure the following;
- That your company name choice is available by searching the Pennsylvania Business Entity Database and doing a name search on the State of Pennsylvania website.
- Then, get a professional Registered Agent. This agent will provide their address and forward any important documents to you.
- File the correct paperwork with the Pennsylvania Division of Corporations called “Articles of Organization”.
Before I wrapped up this art, let’s talk about why having a registered Agent is important.
Why Registered Agents?
Any business in Pennsylvania is required to have a registered agent and a registered office. The registered agent serves as a trustworthy point of contact between your company and the department, receiving tax and legal documentation on your behalf.
Your registered agent can be you, a member of your LLC or company that is 18 years old and lives in Pennsylvania, or a licensed registered agent service that can receive correspondence on your behalf.
There are advantages and disadvantages to each registered agent option, so read up on them and decide what is best for you.
How to Form an Online Business
For an online business, you will have to register your business name as a domain name.
Furthermore, to avoid trademark infringement issues, you should do a federal and state trademark check to make sure the name you want to use is not the same as or too similar to a name already in use.
#4. Register for local taxes, zoning requirements, licenses, or permits.
Depending on the form of the company, additional registrations, licenses, and permits can be required. Consult the state’s website as you approach the end of the process of beginning your company in Pennsylvania to find out exactly what you need to file.
You may type your business’s address on the website and find out who to contact in the government for any registrations, permits, or zoning requirements.
Hence, you may also look up who to contact if your organization needs any special registrations. This is also a great place to go for answers to questions about how to register your company and name, how to register for business taxes, and more.
Furthermore, You’ll also need a professional license if you’re starting a company that will offer a professional service. This involves practitioners such as physicians, dentists, attorneys, and others.
These licenses are required before you can start a business and they’re intended to protect the public from people who claim to have fake qualifications or expertise.
#5. Get Tax and Employer accounts
After that, you’ll need to register with state tax and employer accounts in order to formally start a company in Pennsylvania and operate legally. This is how you’ll set up the company to pay Pennsylvania taxes.
Depending on your line of service, you might be responsible for paying taxes such as sales tax, hotel occupancy tax, or unemployment compensation tax.
Tax Registration
To register for tax, you must register with the Pennsylvania Department of Revenue (DOR). Employer withholding taxes must be registered with the DOR if your company will have employees.
Both forms of taxes, as well as other company taxes, can be registered online via the MyTax Pennsylvania website.
EIN ( Employer Identification Number)
This number will be given to you by the IRS if your company has employees or is taxed separately from you.
And even if you aren’t legally bound to have an EIN, there are several business reasons to do so. Oftentimes, banks ask for an EIN to open a business account, and other companies with whom you do business also ask for an EIN to process payments.
Note, you can get an EIN without any filing fee by completing an online application on the IRS website.
Regulatory Licenses
Different state agencies give regulatory licenses. For instance, you can get Environmental permits from the Pennsylvania Environmental Protection Agency and employment-related licenses from the Pennsylvania Department of Labor.
#5. Open a Bank and Credit Accounts
One of the objectives of any business entity is to make money.
In fact, in the planning process, the financial aspect of the business which includes both expected expenses and incomes is taken into consideration.
This shows that building a business without a financial report is like building a house on the air. Aside from that, opening a bank account can help protect your personal account from any risk.
This is because when your personal and business accounts are not separated, your personal assets are at risk.
Additionally, having a credit account can help you get credit cards and another financing in your business’s name, better interest rates, higher lines of credit, and more.
To open an account, you can check out any of the following Business Banks in Pennsylvania listed below:
#6. Get Business Insurance
Business insurance will shield your company and your personal properties from the effects of unforeseeable events like personal injury litigation and natural disasters.
An insurance provider may assist you in determining the best coverage options for your business, which could include general liability insurance to protect you against personal injury and property damage claims.
It may also be cyber liability insurance, which pays for legal and settlement costs in the event of a computer security breach.
#7. Get a Physical Location
Where you choose to set up shop is critical.
The idea is to find somewhere with the best resources that make managing your business easier. For every downside of the location (and there will be some), there should be 3 upsides.
#8. Build a Business Brand
Building a business brand is one of the ways to have a solid business that can withstand competition. When doing that, you have to consider your aims and objectives, your business core values, and what can make your customers trust your business.
Apart from that, you must carefully choose your business name because it is the cornerstone for good branding. Once you’re satisfied with that, the next you should look at is getting a unique logo that portrays what your business is offering.
#9. Get Online Presence
Regardless of your business, a professional website is vital to the long-term success of your company.
A website helps potential clients to locate your company online and learn about the goods or services you provide, as well as improve the company’s reputation.
Furthermore, you can also promote your business online through social media platforms like Facebook and Twitter, get to local google, or get a review account like google reviews, or a yelp account.
You can also promote your business brand using Press Releases. With press releases, you can get publicity, build your brand on the web, and improve your website’s SEO, driving more customers to your website.
Bottom Line
Now that you’ve completed all of the steps needed to start a company in Pennsylvania, you’re ready to turn your genius business idea into a reality.
Starting a business can be daunting, but by following this guide and organizing all of your documents, you can make the process go as smoothly as possible. After that, you can concentrate on the more critical aspects of your company, such as marketing and development.
Reference
- https://www.99businessideas.com/business-in-pennsylvania/
- https://www.50states.com/facts/pennsylvania.htm
- https://www.onlyinyourstate.com/pennsylvania/things-you-didnt-know-pa/
- https://www.mycompanyworks.com/starting-business-pennsylvania/
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