How to Start a Business in PA?

How to Start a Business in PA?
Starting a small business takes the vision of the gaps in the market, not the gaps you think there are in your personal universe.  You need research, self-confidence — and a measure of fearlessness. You’ll ask yourself: Is there a need for what I am going to offer in the market? Do I have enough money? The right equipment? Am I getting the best advice?

There are more than 28 million small businesses in the United States, making up a whopping 99.7 percent of all U.S. businesses, according to the Small Business Administration. When you consider some of the most popular reasons to start a business, including having a unique business idea, designing a career that has the flexibility to grow with you, working toward financial independence, and investing in yourself — it's no wonder that small businesses are everywhere.

But not every small business is positioned for success. In fact, only about two-thirds of businesses with employees survive at least two years, and about half survive five years. So you may be in for a real challenge when you decide to take the plunge, ditch your day job, and become a business owner. The stage is often set in the beginning, so making sure you follow all of the necessary steps when starting your business can set the foundation for success. But first, make sure you know the 
advantages and disadvantages of owning a small business.

From finding your business idea to writing a plan, and get financing in place, there are multiple steps you need to follow to start a business successfully.  Remember, from the 10 steps listed below, take one step at a time, be patient, think, and ask for help!


Step 1: Do Your Research

Most likely you have already identified a business idea, so now it's time to balance it with a little reality. Does your idea have the potential to succeed? You will need to run your business idea through a validation process before you go any further. 
Golden Rule: In order for a small business to be successful, it must solve a problem, fulfill a need or offer something the market wants.
There are a number of ways you can identify this need, including research, focus groups, and even trial and error. As you explore the market, some of the questions you should answer include:
  • Is there a need for your anticipated products/services?
  • Who needs it? Define your target market, people (if consumers market) or businesses (if business to business market).
  • Are there other companies offering similar products/services now?
  • What is the competition like?
  • How will your business fit into the market?
Don't forget to define your branding. Ask yourself some personality and character questions, too, about starting a business, your attitude, your dreams, your organization skills, all counts before you take the plunge.

Step 2: Make a Plan

You need a business plan in order to make your business idea a reality. In other words, you already have the ideas and methods, procedures, and a vision, but it is all in your head. A business plan is a blueprint, your ideas in a written format, that will guide your business from the start-up phase through establishment and eventually business growth. You may wonder if you really need a business plan. There are four reasons to write a business plan

The good news is that you don’t have to write a book about it, start with one page and go from there. Fortunately, there are different types of business plans for different types of businesses. Check our
business plan guide to start.

Who is the customer? One idea is to talk to potential customers, but avoid your friends; instead, identify a list of likely customers and call them. The good news is that there are many free lists on the Internet. They include sites like,,, and so on.

Have you heard about observations? Yes, that is when you pinpoint a potential competitor and stand nearby to see customer traffic, types of people, rush hours, etc. Next, you can conduct a survey using an online service like Zoomerang, which has a panel of about two million people. SurveyMonkey, the online survey site has acquired Zoomerang. You can designate groups with up to 500 attributes (industry, age, gender, income, and so on). This is a quick way to get feedback on your business idea.

What’s happening with your market?

If your business is in retail, look at, which provides helpful information on local economic trends (population, income, and demographics). Visit and see how many competing retail outlets you’ll be facing. Is the market too crowded?

If you intend to seek financial support from an investor or financial institution, there are many ways to approach people with money.  From the 0% interest rate Kiva to a 2% program located in your local Municipality or Community Development Corporations to a regular financial institution at the current rates of between 6% - 8% depending on risk.  For all of the above programs, you might require to write your idea proposal in a piece of paper or in a traditional business plan. If the amount you are requesting is high, the type of business plan is generally long and thorough and has a common set of sections that investors and banks look for when they are validating your idea.

If you don't anticipate seeking financial support, a simple one-page business plan can give you clarity about what you hope to achieve and how you plan to do it. It will help you to put your thoughts together and shows any potential customers you have put some time on your business idea.

Step 3: Plan Your Finances

Starting a small business doesn't have to require a lot of money, but it will involve some initial investment.
Put together a spreadsheet that estimates the one-time startup costs for your business (licenses and permits, equipment, legal fees, insurance, branding, market research, inventory, trademarking, grand opening events, property leases, etc.). Some ideas to help you at the initial stages: shopping for used equipment on Craigslist, bartering your services, using free or inexpensive online applications like Skype (for free calling), (to set up a Web site) and VistaPrint (for printing business cards and brochures). Always ask for discounts.
Come up with the investment needed to run your business for at least 12 months (rent, utilities, marketing and advertising, production, supplies, travel expenses, employee salaries, your own salary, etc.).  
Those numbers, start-up costs, and running for at least 12 months, combined, are the initial investment you will need.
Now that you have a rough number in mind, there are a number of ways you can fund your small business, including:
You can also attempt to get your business off the ground by bootstrapping, using as little capital as necessary to start your business. You may find that a combination of the paths listed above works best. The goal here, though, is to work through the options and create a plan for setting up the capital you need to get your business off the ground.

Step 4: Choose a Business Structure

Your small business can be a sole proprietorship, a partnership, a limited liability company (LLC) or a corporation. The business entity you choose will impact many factors from your business name, to your liability, to how you file your taxes.

You may choose an initial business structure, like a
Sole Proprietorship, and then reevaluate and change your structure, to an LLC, as your business grows and needs change.

Depending on the complexity of your business, it may be worth investing in a consultation from an attorney or CPA to ensure you are making the right structure choice for your business. It is advisable, at the beginning to attend the many Start-up business seminars offered by the Small Business Development Centers, SCORE, and Women Business Centers around the nation.

Step 5: Pick and Register Your Business Name

Your business name plays a role in almost every aspect of your business, so you want it to be a good one. Make sure you think through all of the potential implications as you explore your options and choose your business name.  The name will be your business identifier, which should be easy to remember, short, and not offensive.

Then, you will need to find out if that name has already been taken.  The Pennsylvania Department of State has a link called “Business Name Search” for you to check. A sole proprietor must register their business name with either their state or county clerk. In Pennsylvania, you need to deal with the Department of State.

Corporations, LLCs, or limited partnerships typically register their business name when the formation paperwork is filed, also with the Pennsylvania Department of State. Just a note, you will need first to apply for the IRS Employer’s Identification Number (EIN) in order to apply for an LLC with your State. Don't forget to register your domain name once you have selected your business name. Once you have chosen a name for your business, you will need to check if it's trademarked or currently in use. If you want to protect your business name, you will need to contact the U.S. Patent and Trademark Office.

Step 6: Get Licenses and Permits

Paperwork is a part of the process when you start your own business.

There are a variety of small business licenses and permits that may apply to your situation, depending on the type of business you are starting and where you are located. You will need to research what licenses and permits apply to your business during the start-up process.  Also, they take time to be processed, so plan ahead.  There are Federal Government licenses such as the EIN number for your business, State licenses such as the realtor license, cosmetology, and others, and local government licenses such as the food certification for restaurants. 

Step 7: Choose Your Accounting System

Small businesses run most effectively when there are systems in place. One of the most important systems for a small business is an accounting system.  Keep control of how much money is coming in and how much is going out, as simple as that.

Your accounting system is necessary in order to create and manage your budget, set your rates and prices, conduct business with others, and file your taxes. You can set up your accounting system yourself either on excel or by using any of the accounting software packages such as QuickBooks, Xero, Sage, etc., or
hire an accountant to take away some of the guesswork. If you decide to get started on your own, make sure you attend training classes and workshops offered at the SBDC, SCORE or Women’s Business Center around the country.

Step 8: Set Up Your Business Location

Setting up your place of business is important for the operation of your business, whether you will have a home office, a shared or private office space, or a retail location.

You will need to think about your location first.  It all depends on the type of business and the type of clients. Urban versus suburbs or personal versus online, the fact is you need to think about a location that will work for you.  From parking, equipment, and overall setup, to the best lease agreement you can negotiate. Make sure your business location works for the type of business you will be doing. You will also need to consider if it makes more sense to buy or lease your commercial space.  Don’t forget about zoning. Consult with your local municipality if your home business is allowed in residential zoning area and/or if your retail location is located in a commercial zoning area.  Remember, it takes 30 days to process an Occupancy Permit from your local Municipality, so plan ahead.

Step 9: Get Your Team Ready

Starting with yourself, try to analyze your strengths and weaknesses.  Find a way to cover your weaknesses by getting someone on board that is good at that area.  If you need help, there is always the choice to get one of these two: contractors or employees.  As you know, contractors are cheaper and less paperwork, meaning, no benefits, no paid vacation, and one-time payment for a job done. If you think, your business needs a steadier, permanent help, then it is time to think about getting an employee. If you will be hiring employees, make time to start the process. Make sure you take the time to outline the positions you need to fill, and the job responsibilities that are part of each position. The Small Business Administration has an excellent guide to hiring your first employee that is useful for new small business owners.

If you are not hiring employees, but instead outsourcing work to independent contractors, now is the time to work with an attorney to get your independent contractor agreement in place and start your search. The IRS has also an explanation about the definitions of a contractor versus an employee.

Lastly, if you are a true solo entrepreneur hitting the small business road alone, you may not need employees or contractors, but you will still need your own support team. This team can be comprised of a mentor, small business coach, or even your family, and serves as your go-to resource for advice, motivation, and reassurance when the road gets bumpy.  It is not a bad idea to get an all-volunteer board that agrees to help you out with giving advice. They can be your service providers such as a banker, an accountant, a lawyer, an industry person, etc. No more than 4 members to start is advisable.

Step 10: Promote Your Small Business

Once your business is up and running, you need to start attracting clients and customers. You'll want to start with the basics by writing a unique selling proposition (USP) and creating a marketing plan. Check for a marketing plan sample. Then, explore as many small business marketing ideas as possible so you can decide how to promote your business most effectively.  Maybe you can mount an online marketing campaign through Google AdWords or use VerticalResponse for an e-mail newsletter.

Create Press Releases and post them on PRLog and 24/7 Press Release. Join a relevant online community and contribute with articles, information, and contacts. Put up your multimedia in Flickr and YouTube, start a Blog and register with Google Places, Yahoo Local and Bing.

Once you have completed these business start-up activities, you will have all of the most important bases covered. Keep in mind that success doesn't happen overnight. But use the plan you've created to consistently work on your business, and you will increase your chances of success.

The Duquesne University SBDC provides free business consulting for entrepreneurs in the Greater Pittsburgh area. Click here to request free consulting, or contact the SBDC for additional help and information.



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