Pennsylvania is a land of opportunity for entrepreneurs and small business owners alike. With a population of nearly 13 million and a GDP of $722 billion, Pennsylvania is one of the largest economies in the United States. In fact, the state is the 9th most popular state in which to start a small business. Small businesses account for 99.6% of all private businesses in Pennsylvania.
If you're thinking about starting a business in Pennsylvania, you're in good company. The state offers a range of resources and programs to help entrepreneurs succeed, including access to capital, tax incentives and a network of support services. But before you get started, there are some important steps you'll need to take.
In this guide, we'll walk you through the process of starting a business in Pennsylvania, from developing your business plan to registering for the right permits and licenses—and more.
Once you’ve got your business idea, create a website to jumpstart your venture.
Start a business in Pennsylvania in 7 steps
01. Come up with a business idea
Developing a solid business idea is your first priority. Start by determining what you want to sell, or the service you plan to offer. This might be a brand new idea or an improved concept of an existing product designed to solve a problem or pain point that consumers have.
Make sure to research your potential competitors and your target audience. This will help you to refine and hone in on the best business idea to run with.
Pennsylvania is a state brimming with opportunities for entrepreneurs and there are a multitude of business ideas to explore. Some business ideas that may be successful in the state include:
Health and wellness: With a growing focus on health and wellness, Pennsylvania is a good place to start a fitness studio, yoga retreat, healthy food service and the like.
Technology: Pennsylvania has a growing technology scene, with many startups and established companies operating in the state. This makes it a great place to start a new business in the technology sector, including a business that has to do with software development, IT consulting and data analytics.
Art and design: Pennsylvania has a rich arts scene, with many galleries and museums located throughout the state. You could open an art gallery or provide services like graphic design, web design or interior design.
Manufacturing: Pennsylvania is home to several manufacturers, including those in the automotive, chemical and steel industries. Businesses in this industry could include a small manufacturing business or manufacturing services that focus on anything from textiles to technology.
Renewable energy: Pennsylvania has the potential to be a leader in renewable energy with its ample wind and solar resources. Along these lines, you could start a solar or wind energy company, provide energy efficiency consulting or offer green building services.
Education: Pennsylvania is the birthplace of many colleges, universities and schools. Opening a tutoring center, starting a test preparation service or providing educational software or technology could serve as good business ideas in the state.
Environmental services: With abundant natural resources and outdoor spaces, Pennsylvania is a prime location for businesses in the environmental sector. This could include offering environmental consulting services, offering waste management solutions or starting a composting business.
02. Choose your business type
When starting a new business in Pennsylvania, choosing the right type of business entity can greatly impact your success. Your personal liability, tax obligations and management structure are all affected by your legal structure.
Here are the basic business types to choose from in Pennsylvania:
Sole proprietorship: As a sole proprietor, you have complete control over your business. However, you’re personally liable for any debts or legal issues.
Partnership: As a partnership, you and your partner(s) share control, profits and losses with one another. You also share legal and financial responsibilities.
Limited liability company (LLC): This is a popular choice for small business owners as it offers the liability protection of a corporation but is taxed like a partnership. You are not personally liable for company debts or legal issues.
S corporation: An S corp is similar to an LLC in terms of liability protection but is taxed differently. With an S corp, profits and losses pass through to the owners' personal tax returns.
C corporation: A C corp provides the most liability protection. However, it can be more complex and costly to manage without the help of an accountant.
Nonprofit: A nonprofit operates for the benefit of the public or a specific group. It is tax-exempt and governed by a board of directors. All profits are reinvested back into the organization.
03. Name your Pennsylvania business
Choosing the right name for your business is an important step in building your brand and connecting with your customers.
One of the best ways to come up with a business name that represents your brand, product or service is to write down a list of keywords related to your business and then combine them to create unique combinations.
Looking for inspiration? Try Wix’s business name generator tool.
Here are some ideas for Pennsylvania-based businesses that may help you brainstorm your own:
Steel City Solutions
Keystone Creative Co.
Use the Pennsylvania Department of State's website to check if your desired business name is available. Additionally, make sure that it's not trademarked by searching the United States Patent and Trademark Office (USPTO) site. Plus, check that your name is available as a domain name before finalizing your choice.
04. License and register your business in Pennsylvania
It’s time to make your business official by registering it with the government and acquiring the appropriate licenses and insurance.
To license and register a business in Pennsylvania, follow these steps:
Register your business with the Pennsylvania Department of State: If you are forming a corporation or an LLC, you need to file articles of incorporation or articles of organization, respectively, via the PA Business One-Stop Shop website.
Obtain any necessary business licenses and permits: Depending on your business, you may need to secure permits from the Department of Environmental Protection, Department of Agriculture and Department of Health. You can find information on which licenses and permits you need via the PA Business One-Stop Shop website.
Obtain an employer identification number (EIN). Apply for an EIN with the IRS. This is a necessary step for federal tax purposes.
Register for taxes: Most businesses will have to register for taxes with the Pennsylvania Department of Revenue.
Obtain any necessary local licenses and permits: Acquire required permits and licenses from the city or county where your business is located.
Register for insurance: If you have employees, you’ll need to obtain unemployment and workers' compensation insurance with the Pennsylvania Department of Labor and Industry. You’ll also want to consider getting additional insurance coverage, depending on the nature of your business.
Open a business bank account: It is important to keep your personal finances separate from your business finances, so opening a business bank account is recommended.
The above steps are just a general list of items you may need, but no two businesses are identical. If you have questions about the business registration requirements for your business, consult an attorney or accountant to ensure that you're following all the right steps.
05. Write your business plan
Crafting a strong and comprehensive business plan is a critical step for any aspiring entrepreneur as it serves as a foundation for the success of your business. A well-written plan not only tells the story of your business but also outlines your vision, strategies and objectives clearly and persuasively.
To ensure that your business plan covers all important aspects of your business, here are some key components that you should consider including:
Executive summary: This section gives a concise overview of your business, its mission statement, target market, unique selling proposition and financial goals.
Business description: This section delves deeper into your product or service, target customers and the current industry trends that you will navigate.
Market analysis: This section provides an analysis of your target market, including your competitors, customer demographics and potential areas for growth.
Marketing and sales strategies: This section outlines your plans for marketing and selling your product or service, including pricing, distribution channels and promotional activities.
Operations plan: This section details your business's daily operations, including production processes, staffing requirements and management structure.
Financial projections: This section provides a detailed financial analysis of your business, including revenue and expense projections, cash flow forecasts and break-even analysis.
Risk management plan: This section outlines potential risks and challenges that your business may face and the strategies you will use to mitigate them.
Your business plan is your compass and helps guide your business's future growth and direction.
Your business will inevitably face challenges—some of which may lead to self-doubt or a lack of motivation. However, with a well-written and detailed plan to reference, you can stay motivated and focused on the reasons why you started this venture in the first place.
06. Secure business funding in Pennsylvania
When starting a business in Pennsylvania, one of the most important steps is to find the right funding to help bring your vision to life.
Pennsylvania offers a variety of funding opportunities, including grants, loans and tax incentives. However, some funding options may be specific to certain industries or regions, so it’s helpful to do your research and explore all of the options available to you.
With the right funding in place, you can focus on building and expanding your business while also taking advantage of opportunities to innovate and stay ahead of the competition.
Some of the most popular ways to fund a business in Pennsylvania include:
Personal savings: Many small business owners use personal savings to fund their businesses at first, which allows them to maintain control and avoid taking on debt. However, it's important to be realistic about your personal finances and the risks involved in using your own money to start a business.
Friends and family: Friends and family members can be a good source of funding for a new business, but it's essential to have a clear agreement in place to avoid any misunderstandings or conflicts down the road.
Pennsylvania Industrial Development Authority (PIDA) loans: PIDA provides low-interest loan financing and lines of credit for businesses.
Small Business Administration (SBA) loans: SBA loans are offered by banks and other lenders, but are guaranteed by the SBA. They offer low interest rates and flexible repayment terms, making them a popular choice for small business owners.
Angel investors: Angel investors are high-net-worth individuals who invest their own money into early-stage businesses. They often provide mentorship and guidance in addition to funding.
Venture capital: Venture capital firms invest in high-growth startups with the potential for significant returns on investment. They typically provide larger amounts of funding than angel investors, but also require a larger equity stake in your business.
Crowdfunding: Crowdfunding platforms like Kickstarter and Indiegogo allow you to raise money from a large number of people who each contribute a small amount of money to your business.
Bank loans: Banks offer a range of loan types, including term loans, SBA loans and lines of credit, which can provide the necessary capital to help businesses achieve their goals.
07. Create a business website
In today's digital age, having a business website is not just an advantage but a necessity for expanding your reach. With that said, creating a well-designed website for your business should be one of your top priorities.
A website is a cost-effective way to showcase your products or services, provide essential information about your business and offer customers a way to get in touch with you and purchase your products or services. In addition, a website can help you to stand out from competitors and establish credibility.
Begin by choosing a professionally designed business website template. Many eCommerce platforms offer templates to help you get started. For example, Wix has more than 500 customizable website template designs that are ready for your images and content.
Once your website is launched, the next step is to drive traffic to it using various strategies—such as email marketing, SEO and social media campaigns—to increase visibility and attract relevant audiences.
For more information, read our guide on how to make a business website, where you can learn about the best practices for designing, launching and promoting a website that will help your small business thrive in Pennsylvania.
Business examples in Pennsylvania
Need a little inspiration? Here are some Pennsylvania-based small businesses using Wix to support their business ventures online and attract a wider audience.
Located in Slippery Rock, Pennsylvania, Steel Mill is a niche distillery that specializes in crafting several flavors of moonshine. It offers on-site consumption of its moonshine, mixed drinks and spirits to separate itself from the competition. It also focuses on sustainability while sourcing ingredients locally whenever possible and even shares a portion of its revenues with youth sports teams in the community.
Indian cuisine restaurant Masala Leaf is one of Exton’s newest businesses. Its colorful website is filled with high-quality product photos to entice taste buds and make mouths water. Additionally, customers can find the full menu and specials online with a convenient online ordering option in the works.
How to start a business in Pennsylvania review
Looking to start a business in another state? Check out how to start a business in Minnesota or how to start a business in New York.