Set your company up for success by gathering everything you need to create a startup in Philadelphia.
Building a startup from the ground up requires patience and a lot of planning. You need to complete several steps to ensure a thriving business. Some of these steps may seem daunting at first. However, this guide to starting a business in Philadelphia covers everything you need to know to form your own company!
Getting your business started in Philadelphia
The City of Philadelphia provides numerous opportunities for entrepreneurs. From tech startups to boutique retailers to food trucks, hundreds of new enterprises emerge in Philadelphia every year as aspiring young entrepreneurs attempt to make their marks.
Your startup needs an effective strategy to overcome all obstacles. If you devise and follow a well-organized plan, your business will take off in no time! In fact, you may find that getting your business off the ground in Philadelphia proves much easier than you think. To help you in your journey, we have created the following step-by-step guide to creating a startup in Philadelphia.
1. Think of a business idea
Every successful business starts with a great idea. However, thinking of a good business idea takes time and effort. You ought to come up with various concepts before deciding on one. Even if you choose the best business idea, your company still may not enjoy success after your first few attempts. But if you refuse to give up, your chances improve dramatically. Think of a business that reflects your:
- Area of interests
- Skills and hobbies
- Available resources
After finalizing one idea that you feel comfortable with, you can start planning your business!
2. Establish a legal structure
Choosing the best legal structure for your business entity will define your rights, responsibilities, and liabilities as the business owner. All Philadelphia businesses must designate either an owner or an employee as the state’s primary point of contact. Some of the forms you can complete to become a new business owner in Philadelphia create:
- Sole proprietorships
- Limited Liability Corporations (LLCs)
Researching these types of business entities will enhance your knowledge as an entrepreneur and provide you with a clearer picture of the opportunities and risks that you may face as you choose one.
3. Select a name for your business
Now your business needs a name. Perhaps the most fun part of creating a startup involves deciding on a unique name for your brand. Choosing a playful brand name that fits your business model will help boost your popularity.
After coming up with a name, go to the Philadelphia Database of Registered Businesses to check its availability. A secondary benefit of cross-checking your business name includes finding out which businesses share names similar to yours.
If you plan on starting a tech company or an online business, consider using your brand name as your domain name to prevent customer confusion. That means you’ll need to check a domain name lookup site to see what domain names are available.
4. Organize a business plan
Creating a comprehensive business plan will help you visualize your goals and give you the confidence to take on the world. The success of most entrepreneurs and corporate managers depends on the quality of a detailed business plan.
An effective business plan can attract the investment and support you need to enjoy success. It should accurately describe your business model, guide you in making strategic decisions, and illustrate how your business will operate.
Without a business plan as a baseline, you may have a much more difficult time tracking your progress, making adjustments, and referencing historical information when deciding on a course of action. You can use business plans to validate your idea, set goals, manage resources, and pitch your business as you go through the planning process.
5. Choose a location and review the zoning regulations
After figuring out the type of business you want to start, picking a location for your business comes next. During this process, most business owners make the mistake of rushing into things. You ought to make decisions based on the vision you created for your business.
Where can you check zoning regulations?
Check the zoning rules in Philadelphia before you make any decisions regarding your business location to avoid costly legal issues in the future. You can find all the information you need on zoning, licenses, and permits on the Philadelphia Department of Licenses and Inspections website. You can also review the city regulations regarding retail stores on the website.
6. Register for an Employer Identification Number (EIN)
Before registering your business, the City of Philadelphia requires you to determine your company’s legal structure. Then you will need to create an Employer Identification Number (EIN). To acquire an EIN, you will need to visit the IRS website and follow step-by-step instructions.
Why do you need an EIN?
Most businesses need to secure an EIN to:
- Identify your business to the state
- Open a bank account to process payments
- Meet tax obligations, including employee tax withholdings
7. Open a tax account
All business entities except sole proprietorships must have a Philadelphia tax account. You need to create a separate tax account when you operate as a corporation or LLC because the state differentiates company income and debt from your personal tax liability.
Tax structures differ from one type of business entity to another. You can pay company taxes separately when you create a tax account. Visit the City of Philadelphia website to apply for a Philadelphia Tax Identification Number (PHTIN) and a Commercial Activity License (CAL). Once you have secured these documents, you can legally operate your business.
The bottom line
Following the step-by-step guide to creating a startup in Philadelphia can help you avoid potential pitfalls that may slow down your progress. Once you have established your business, do not forget to market it to attract new customers.
Best of luck as you launch your business in Philly!