If you’ve ever dreamed of launching your own business in the Bay State, you’re in good company. With a population of over 7 million, a culture of innovation, and strong state government support for entrepreneurs, Massachusetts is a business-friendly place to turn ideas into reality. The state has well-defined mechanisms for licensing, taxation, and business formation that make the path clear.
In this guide, we’ll walk you through 11 key steps to start a business in Massachusetts, from refining your idea to opening your doors.
The steps:
- Fine-tune your business idea
- Create a business plan
- Choose a business name
- Choose a business structure
- Set up Banking, Credit Cards, & Accounting
- Get Funding for your Massachusetts business
- Get Insured
- Obtain Permits & Licenses
- Find your team
- Market & Grow Your Business
- Open the doors!
1. Fine-tune your business idea
Before you file any paperwork or pick out signage, you’ll want to spend time thinking through your concept. A great business idea is the first step in building a successful venture!
Why this matters
Your business idea shapes everything: your target market, marketing plan, legal structure, funding needs. If you skip this step and just jump in, you may set yourself up for avoidable challenges.
How to generate, vet and refine your idea
Play to your strengths. What are you good at? What do you enjoy? Maybe you have a skill or hobby that could be turned into a business.
Look for local opportunities in Massachusetts. Think about what works here: is there a niche in the Boston metro area, or in suburban or rural regions? Massachusetts has a strong showing in technology, education, healthcare, tourism, and professional services.
Product vs. service decision. A product-based business might require inventory, warehousing and shipping; a service business might require fewer upfront fixed costs. For example, you could open a tech consultancy in Cambridge, a coastal tourism business on Cape Cod, or a specialty retailer in a suburb.
Check viability. Pretend you’re a banker deciding whether to lend money to a new business. Ask yourself questions like: is there a customer base? What is the competition? What will it take to reach profitability?
Local flavor matters. One key to success, especially in a tourism-heavy state like Massachusetts, is offering something unique and local. You could open a food truck in Boston offering a twist on regional fare like “lobsta rolls,” a niche consulting firm serving the country’s oldest universities, a craft business selling to local tourists in the Berkshires, or a tele-service business that leverages broadband access in suburban Massachusetts.
Fit with Massachusetts economy and culture. Massachusetts is known for knowledge-intensive industries, high levels of education, and a willingness to embrace innovation. If your idea can tap into those trends, you’re placing yourself in a favorable environment.
Things to consider in the planning stage
- What are your start-up costs?
- Who is your ideal customer (city, suburb, rural)?
- What regulatory or licensing hurdles might apply?
- Is your idea scalable? Can it grow beyond the initial market?
- What is your unique value proposition? That is, what sets your business apart in a competitive marketplace?
By spending time here and doing some early market thinking, especially with a Massachusetts lens, you’re setting a solid foundation.
2. Create a business plan
Once your idea is sharpened, you’ll need a business plan. Think of this as your roadmap.
Market research
You’ll want to gather data: Who are your customers? What do they want? How large is the marketplace in Massachusetts or your local area? What are your competitors doing? What are the local trends (like Massachusetts tourism, tech, education sectors)? Use your findings to justify why your business can succeed.
Financial plan
Map out your startup costs, projected revenue, ongoing expenses, and cash-flow forecasts. Since Massachusetts has relatively high-cost-of-living areas, you’ll want to reflect realistic local cost assumptions. How many customers will you need each month (or year) to break even? What’s your pricing strategy?
How will you know when to “fail”—that is, is there a financial point at which it’s time to wind your business down? While it can seem defeatist to already be thinking about closing your business before you open it, it’s much better to have a closing plan ahead of time than to try to make difficult decisions when you’re in the thick of it.
Marketing plan
How will you reach your customers? Will you focus on local marketing (city/town ads, flyers, local partnerships), digital marketing (website, social media), networking in local business groups (like regional chambers)? What promotional offers will you use to attract first customers? Getting that first foothold can be critical to the speed with which your business expands.
3. Choose a business name
Your business name is more than just a label; it’s your brand identity. In Massachusetts, you’ll need to make sure your name is available and complies with all state regulations.
Brand, domain name, and memorability
Choose a name that’s easy to pronounce, memorable, aligned with your business offerings, and distinctive. You’ll also want a matching domain name and social media handles (if applicable). Don’t confuse prospective customers by having inconsistent naming trends across different platforms!
Massachusetts-specific naming laws
If your business structure requires you to register (like an LLC or corporation), you have to perform a Massachusetts business entity search with the Secretary of the Commonwealth of Massachusetts to make sure the name you want is available. You may also want to check registered trademarks through the U.S. Patent and Trademark Office to make sure your name or logo isn’t infringing on anyone else’s intellectual property.
If you’re using a name other than your legal name, which is common for sole proprietors, you’ll usually need to file a business certificate in the city or town where your business is located. This is also known as a “doing business as” or “DBA” certificate. Before filing, it’s smart to conduct a Massachusetts DBA search to ensure your chosen business name isn’t already in use.
Finally, you’ll want to make sure your name doesn’t run afoul of any professional or marketing regulations. Like most states, Massachusetts has some guidelines on who can call themselves what. For professions that are regulated by the state (barbers, estheticians, attorneys, financial advisors, physicians, plumbers, and others), there are strict naming guidelines. This means you can’t name a restaurant “Pizza and Calzones, Attorneys at Law.”
Before you file anything, check the Massachusetts business database, test the name as a website domain and social media handle, do a quick search to see if any similar names exist in your region, and consider reserving the name through the Secretary of the Commonwealth if you’re not ready to file yet.
4. Choose a business structure
The way you structure your business is important. It determines your potential legal liability, your tax obligations, and how you raise funding.
Common types of business structure
In Massachusetts you’ll encounter a few business types. These include sole proprietorships, which are simple to set up but mean the owner assumes full personal liability; partnerships, where two or more people share ownership, profits, and liabilities; limited liability companies (LLCs), which protect your personal assets; and for-profit or non-profit corporations, which are formal business structures that aremore suitable if you expect outside investors or plan to scale.
If you’re unsure which structure is best, consult with an accountant or attorney familiar with Massachusetts business law. Many new business owners form an LLC because it balances simplicity with liability protection, but every business is different.
Tax advantages of each option
For a sole proprietorship/partnership: profits (and losses) pass through directly to the owner or owners’ tax returns. This business form is simpler but also has less liability protection than corporations or LLCs.
For LLCs: profits are taxed as pass-through by default, unless you elect otherwise. These business forms also provide liability protection for the owners. To form a Massachusetts LLC you need to file a certificate of organization with the Secretary of the Commonwealth and pay a $500 fee.
For corporations: those who choose an S-Corporation status can receive pass-through taxation benefits. Forming these businesses requires you to jump through a few more hoops, beginning with filing articles of organization with the Secretary of the Commonwealth.
Since you’re forming in Massachusetts, check the filing fees and requirements for your corporate sub-type with the Secretary of the Commonwealth. For example, both LLCs and corporations require you to file certificates or articles of organization and pay a fee.
It’s also important to understand Massachusetts tax laws. You’ll need to register with the Massachusetts Department of Revenue for state tax accounts via the MassTaxConnect portal.
5. Set up banking, credit cards, and accounting
Once your structure and name are settled, it’s time to set up your financial foundation. Even if you’re starting small, treat your business as a separate financial entity. That mindset reduces risk and helps you grow more professionally.
Begin by opening a business bank account so that you can separate your business finances from your personal finances.
Next, obtain one or more business credit cards. This lets you track business expenses, build credit history, and simplify your bookkeeping. Determine your bookkeeping and tax schedule: will you DIY, hire a bookkeeper, or outsource it to a service?
Finally, set up your accounting software and processes. Even a simple cloud-based system like QuickBooks or Xero will help you track income, expenses, invoices, and receipts. This will be a huge help to you during tax season.
Massachusetts-specific considerations
While bank account set-up and credit cards are generally uniform across the U.S., in Massachusetts, you’ll need to provide proper documentation: articles of organization (if you’re an LLC/corp), your EIN (if required), and Massachusetts state registration details. As discussed above, you’ll need to register with MassTaxConnect if you have employees or are required to collect sales tax or other state taxes.
Keep in mind Massachusetts’s higher cost of doing business. Rent, utilities, and insurance may be more expensive than average (especially in the Boston metro), so your financial plan should reflect realistic local costs.
6. Get funding for your Massachusetts business
Many businesses require capital. Whether you’re paying startup costs, hiring staff, buying equipment, or holding inventory, it all costs money. In Massachusetts, you have both conventional and state-specific funding options.
General tips and best practices
Determine how much funding you need (based on your business plan). Then consider your funding sources: personal savings, friends/family, bank loans, micro-loans, venture capital (if you scale fast), or even crowdfunding.
Make sure you have a strong business plan and financial projections, since any lenders and investors will want to see them.
Massachusetts-specific grants & loans
The Massachusetts government offers a range of funding programs via the Executive Office of Economic Development (EOED) and other agencies. The EOED’s website lists a variety of loans, grants, venture capital, and other capital programs.
The MassDevelopment agency also offers grant programs like Biz-M-Power, which provides matching grants to Massachusetts growth-oriented small or micro-businesses: those with under 20 employees and less than $2.5 million in revenue. And the Massachusetts State Small Business Credit Initiative offers larger scale financing options for equipment purchases or real estate. This initiative is focused on socially or economically disadvantaged individuals.
Many city programs also offer small business grants Massachusetts. For example, the City of Worcester has a Small Business Grant Program for new and expanding businesses in targeted commercial corridors.
Be sure to explore both statewide and local funding programs. While major grants may be competitive, smaller grants or reimbursable incentives at the municipal level can help a lot early on. It helps to keep your documentation ready so you can quickly apply for multiple grants. Finally, always be mindful of deadlines!
7. Get insured
Insurance is often overlooked when business owners focus on “doing” rather than “protecting.” But coverage is essentially, especially in a robust regulatory environment like Massachusetts.
What insurance you may need
There are multiple types of insurance available. The first is general liability insurance, which protects against bodily injury or property damage claims. Property insurance helps protect any physical assets you have like equipment, signage, and inventory.
Professional liability insurance, sometimes known as errors and omissions insurance, is key if you offer professional services like consulting or advising.
If you have employees, you’ll need to carry workers’ compensation insurance and unemployment insurance, which will help compensate your employees if they’re injured on the job or laid off. All Massachusetts employers are required to carry workers’ compensation insurance, no matter how big (or small) your business is.
Finally, business interruption insurance can help provide coverage if your business is in a storm-prone location or depends on the supply chain. This can help you stay afloat if circumstances outside your control temporarily prevent you from being able to provide your products or services.
Don’t delay when it comes to getting insurance. It’s easier and cheaper to set it up at the start rather than when you already have customers, assets, or employees.
8. Get permits and licenses
This step often intimidates first-time entrepreneurs, but to get your Massachusetts business license, the process is well documented. You just need to follow the path.
Federal income tax and Massachusetts local tax
At the federal level, if you’re a corporation or LLC, you’ll need to get an EIN (Employer Identification Number) from the IRS.
At the state level, you’ll need to register with MassTaxConnect if your business collects sales tax, has employees, or withholds payroll taxes.
And if you’re selling tangible goods or certain services, you’ll need a Sales & Use Tax certificate. This can also be obtained through MassTaxConnect and you only need to register once. When you’re applying for this certificate, you’ll need the following information:
- The type of business entity
- Your EIN
- Your legal and mailing addresses
- The business start date
- Contact information, titles, and Social Security numbers of your business officers
Make a checklist of all licenses/permits you may need, including a state sales tax certificate, city business certificate (if you’re DBA), local health permit (if you plan to prepare or serve food), and an occupancy permit (if you have a storefront). Start early because some permit approvals take time.
9. Find your team
Your business is only as strong as the people behind it. Whether you hire employees, use contractors, or build a network of advisors, putting your team together early is a smart move, and Massachusetts has specific rules for hiring.
People are the backbone of the business
Your team — employees, contractors, accountants, advisors — will build your product or service, talk to your customers, deliver value, and represent your brand. Having the right team from the start matters.
Reach out to experienced business owners in Massachusetts to get advice and avoid common pitfalls. These resources can include mentors, local business associations, and chambers of commerce. You may also want to consider using contractors, even if you’re a “one-person show.” Hiring an accountant or bookkeeper as a contractor can save you time and ensure compliance with all state and federal regulations.
Comply with Massachusetts payroll regulations
If you hire employees in Massachusetts, you’ll need to register for employer withholding with the Massachusetts Department of Revenue. The DOR requires you to withhold Massachusetts state income tax; you’ll also need to pay unemployment insurance and carry workers’ compensation insurance, as noted above.
It’s a good idea to use payroll software or hire a payroll provider that is familiar with Massachusetts state mechanics like taxed income thresholds, unemployment contributions, and wage reporting.
Hire contractors
If you contract with independent professionals such as a marketing specialist, accountant, or web designer, make sure you classify them correctly (employee vs. contractor) under Massachusetts law to avoid misclassification penalties. Even if you’re operating solo, you can use contractors to fill gaps so you can focus on growth and not get bogged down by operational minutiae.
10. Market & grow your business
Invite customers to opt in to a mailing list or newsletter. Build an email list early so you can communicate new offers, events, content, and reminders to your prospective customers.
Consider making special offers to attract your first customers. In the commonwealth’s most competitive markets, promotions, referral programs or launch specials can help you break through.
Look for local businesses or brands to collaborate with. Joint promotions with non-competing Massachusetts businesses can help you tap into their customer bases.
Invest in word-of-mouth. Happy customers refer others. Do everything you can to encourage reviews, testimonials, and referrals. In tight-knit Massachusetts communities, a local reputation goes a long way.
Pay attention to online reviews. Encourage happy customers to review you on Google, Yelp, Facebook, and other sites. Search results often matter when customers in Massachusetts look local.
Create unique, helpful content to showcase your activity. A blog, video, or social-media presence that speaks to Massachusetts audiences can help you stand out. For example, you may want to provide tips specific to Massachusetts residents or businesses. And if you have a physical location in Massachusetts, lean into local marketing. Mention things like town and city names, local landmarks, “Massachusetts-based,” “serving the Commonwealth,” etc.
11. Open the doors!
You’ve done the planning, the compliance, the marketing prep. Now it’s time to make your business real and start serving customers.
Plan a successful launch event
Whether it’s a grand opening of a storefront or an online launch promotion, treat this moment as special: send out announcements, invite local press/community, offer opening specials. If you have a storefront, consider a ribbon-cutting event — some local chambers of commerce or economic development offices might even help with publicity.
Finally, use your launch as a marketing moment: collect email addresses, engage customers, and capture photos and videos for social media and local coverage.
Land your first sale
Make sure your operations are ready for action, including payment systems and shipping or in-store checkout. But even the most prepared businesses should be vigilant for early customer service issues. The opening phase often reveals glitches; but by treating them as learning opportunities and fixing them quickly, you’ll be back in business in no time.
Conclusion
You’ve fine-tuned the idea, created a business plan, picked a name, chosen your structure, set up banking and accounting, secured funding, insured the business, obtained permits and licenses, assembled your team, mapped your marketing and growth plans, now it’s time for action. Save this roadmap, revisit it periodically, track your progress, adapt as you go, and lean into the wonderful business ecosystem of the Commonwealth of Massachusetts.
FAQ
Yes. While Massachusetts doesn’t require a general state-business license for every business, if you sell tangible goods or taxable services you’ll likely need to register for a Sales & Use Tax certificate via the Massachusetts Department of Revenue using MAssTaxConnect.
Your LLC Massachusetts cost is $500, and additional fees may apply.
Often yes. While the state may not have one universal “business license,” many cities and towns require a business certificate or “doing business as” (DBA) filing if you operate under a name other than your own. For example, Boston requires you to apply for a business certificate via the City Clerk.
Yes. Massachusetts offers several state and local grant and loan programs for small businesses. Examples include the Biz-M-Power grant via MassDevelopment, city-level grants in Worcester, and statewide programs for disadvantaged business owners.
You’ll need to register your business with MassTAxConnect if you have employees, collect sales tax or have other tax obligations. Also make sure you get an EIN (if required) from the IRS and register any required state tax accounts.