How to Start a Business in Pennsylvania in 10 Steps in 2023

Starting a business in Pennsylvania can offer tons of benefits, but setting it up can be challenging. Read our expert guide to get it done the right way.

Starting a business in Pennsylvania is an exciting opportunity. Whether you’re creating your dream dog training business or selling your handmade jewelry, you’ll want to ensure you set up the business correctly. By creating strong foundations the first time, you can make sure you won’t waste any time or money fixing errors later on. 

While starting a business anywhere in the U.S. requires some of the same steps, Pennsylvania has certain procedures you must follow when it comes to registration, licensing, and permits. Thankfully, it doesn’t have to be complex - just use the following steps to set up your new business. 


10 Steps to Start a Business in Pennsylvania

1. Perform Market Research

Before you launch your business, you should understand your market and target customer. Start by checking out other businesses that are similar to your own. What do they sell? What do they charge? What kind of reviews are their customers leaving? Ultimately, you’re looking to see what you can do better than these businesses. How can you differentiate yourself?

Next, consider who your ideal customer is. You can even reach out to them and ask them a few questions to better understand how to serve them. What’s their budget for your product? How often do they need it? Are there any changes they’d make to your product or service? 

2. Craft a Business Plan

Your business plan will act as a map throughout the coming years. It outlines your plans and processes, making any future decisions simple. You can adjust your business plan if anything changes over time. This is also where you’ll define your business name and structure.

There are four main structures to choose from: sole proprietorship, partnership, LLC (limited liability company), and corporation. If you’re just starting out and you’re the only person working for the business, it might be easiest to start as a sole proprietor. However, having an LLC or corporation offers more protection for your personal assets.

Once you’ve determined your business structure, you can put together the business plan. If you think you’ll apply for a loan, make sure that your business plan looks professional as your lender will want a copy. It should include:

  • Business name
  • Executive summary
  • Company overview
  • Competitive analysis
  • Overview of services/product and pricing
  • Ideal customer
  • Startup costs and earning projections 
  • Marketing strategy

3. Get Registration, Licenses, and Permits

If your business is a sole proprietorship under your first and last name, you won’t need to register your business. For all other business types, you can register on the Pennsylvania Department of State website. If you wish to have a business name that is different from your legal name, you’ll need to register it in the same manner.

Next, you’ll need to register for employer and state tax accounts. These accounts ensure that you pay tax to the state. You can do this online using the PA-100 Business Entity Registration Form. If you provide professional services, you may also need a professional license from the Department of State.

You’ll also need permits and licenses from the federal, state, and local governments. These depend on the type of business you own, as well as your location. You can figure out what’s required of your business by using the U.S. Small Business Administration guide for federal permits and the Pennsylvania Department of State for state permits. Check with your local county clerk for local permit requirements, which depend on your county.

The last piece of paperwork you need is a federal EIN (employer identification number). You can apply for an EIN online through the IRS (Internal Revenue Service). However, if you're a sole proprietor without employees, the IRS does not require you to get an EIN. 

4. Fund the Business

If you haven’t already, put together an estimate of how much funding you need. This includes everything from supplies and inventory to website costs and rent for a brick-and-mortar location. If you offer an online service, your costs may be very low, but if you offer a product and want an in-person location, your costs will quickly grow.

With a budget in mind, you can choose the right type of funding for your needs. Your options include:

  • Self-funding: Use your savings or income from your current job. You might also ask friends and family for capital and create a written agreement detailing how you’ll pay them back.
  • Business grants: You can get a small business grant from the government or other organizations. You won’t have to pay the grant back, but you will need to meet a set of criteria to qualify for the grant.
  • Business loans: There are a variety of loans you can get, from small business loans to equipment financing. You'll have to pay back the loan as well as interest.
  • Business credit cards: There are a lot of business credit cards to choose from, each with different perks and rewards. Look for one with a 0% APR to avoid paying interest.

5. Set Up Financials

In order to protect your personal assets, it’s important to set up a separate bank account for your business. Most banks have business bank accounts - some even offer incentives to get you to sign up, like cash bonuses and no-fee accounts. 

The process of signing up for a bank account is similar to what you’ve likely gone through to set up your personal accounts. You’ll need to provide your business name, estimated revenue, business structure, and your EIN or Social Security number. 

If you don’t already have one, you may also consider getting a business credit card. This allows you to avoid making purchases on your personal credit card. 

At this point, you may also choose to set up accounting software, like Quickbooks or Xero. Using one of these programs, you can track your income and business spending from the start.

6. Consider Getting Insurance

Business insurance can protect you in the event that someone sues your business, or it can cover costs if you have any kind of business-related accident. However, if you’re a sole proprietor without employees, you are not required to have business insurance. 

If you do have employees, Pennsylvania law requires you to get workers’ compensation insurance and unemployment compensation insurance. You may also choose to get disability insurance, though you’re not required to have it.

Other common types of insurance include general liability insurance and professional liability insurance. It’s typically a good idea to have, at minimum, a general liability policy. You might opt for a professional liability policy if you're offering professional services, like accounting. 

7. Set Up Your Website

If you plan on selling in-person only, you might choose to skip building a website. However, it’s important to remember that most people at least research a brand online before deciding to make a purchase. Having a website gives you credibility and gives you a chance to market yourself – even if you’re not selling online.

You don’t have to be a digital expert with coding experience. You can use a website builder, like Wix or Squarespace, to create a professional-looking website in just a couple of hours and even use it to sell your products online. Use your website to explain your product or service, add photos, introduce yourself as the creator, and tell your customers where to find you. 

8. Choose a Payment System

Whether you’re selling in person or online, you need a way to accept payments from your customers. makes it easy to accept a wide variety of payment methods. It also provides you with a full payment infrastructure, including a payment gateway, merchant account, and payment processing services. You’ll have everything you need to get paid from the very start. is quick and easy to set up. You can expect fast approval and a straightforward setup experience, even if this is your first time selling online. also offers solutions for more advanced users, so you can even integrate our API into your website if you prefer. 

Most importantly, makes it easy to accept payments. Using the Pay Dashboard, you can add payment methods to your website or manually key in payment details using the Pay Virtual Terminal. You can also send payment requests with Pay Checkout, or send invoices using Pay Links. You can get paid however it works best for you.

Click here to get started with now!

9. Market Your Business

At this point, your business is up and running and it’s time to find customers, which you can do via marketing. There are a ton of ways to market your business. 

You might cold pitch your dream clients, use direct mail marketing, or network to find your ideal customers. Especially when you're just getting started, your current network of friends and family will help you get your first customers.

Your marketing should depend on your target market and the type of business you run. Think about where your customers spend their time. For example, if you own a company that makes headbands, your best customers are likely on Pinterest looking for ways to style their hair. You’ll want to run ads there rather than sending direct mail. 

10. Hire Employees

Your last consideration should be to hire employees. Depending on your business type, you might need employees immediately, or you might try to grow your business as a one-person show before outsourcing. 

If you don’t have an EIN, you’ll need to get one to hire people legally. You should also make sure that you're registered for employee taxes with the IRS. Lastly, make sure that you report any newly hired employees to the State of Pennsylvania.

The Bottom Line: Starting a Business in Pennsylvania

Starting a new business can be challenging, but it also offers exciting benefits. Although the process might seem overwhelming, if you follow the above steps, you’ll be selling your product or service in no time. Just be sure to register your business with Pennsylvania correctly and get the right licenses and permits depending on your business type and location. 

Of course, you’ll also want to make sure you make it fast and easy for your customers to pay you. When you use, you can allow them to pay with a variety of payment methods on your website. You can also take their payments over the phone by manually entering their information – whatever works for your business. Click here to get started now!

Remember, by setting things up correctly the first time, you can focus on growing your business. With a strong foundation, there’s no limit to your success.


How can a business in Pennsylvania accept credit card payments?

Your Pennsylvania-based business can accept credit cards online, over the phone, or in person by using With the Pay Dashboard, you can manually enter your customer’s information or add payment methods to your website. You can even send your customer a payment request using Pay Checkout. Click here to learn how you can get started.

Does Pennsylvania require a business license?

In Pennsylvania, you only need a business license if you have an LLC or corporation. If you have a sole proprietorship and are operating under your legal name, you are not required to register your business. However, you may need special licenses and permits depending on your local government and the type of business.

How much is a business license in Pennsylvania?

The cost of a business license depends on your type of business. Generally speaking, it costs $125 to $250.

How can you start a business in Pennsylvania with no money?

You can start a sole proprietorship under your legal name without paying to register it. You can also sell services or digital goods that don’t cost any money to create. If you do need funds, you can try getting a small business grant, which you don't have to pay back. You may also try to get a small business loan, though you will eventually need to pay it back.

Meet the author
Ginny Dorn
Ginny Dorn is a finance and business copywriter specializing in credit card processing and fintech. She graduated from Western Illinois University with a bachelor's degree in family and consumer sciences.
There’s a Simple Way for Your New Business to Accept Payments makes it easy for you to accept a variety of payment methods on your website. You can also send your customers direct Pay Links or collect their payment details over the phone. The system is easy to set up, even if you don’t have any tech experience.

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