How to start a business in Massachusetts in 14 steps (2025 guide)

Massachusetts is an incredible place to turn your entrepreneurial dreams into reality. From the bustling energy of Boston, with its historic charm and world-class cultural attractions, to the serene coastal towns of Cape Cod, where sandy beaches meet crystal-clear waters, the Bay State is rich with opportunities for businesses of all sizes and industries. If you’re thinking about starting a business in Massachusetts, we’ve got you covered with our comprehensive how-to guide, where you’ll learn how to register your business, create a business plan, secure funding, and more.

Why start a business in Massachusetts in 2025?

Massachusetts is known for its rich history and forward-thinking innovation, making it a prime location for budding entrepreneurs. World-class universities like Harvard and MIT foster a culture of entrepreneurship and produce skilled graduates. A strong venture capital presence also creates an ideal environment for startups and small businesses to thrive. And Massachusetts' well-established infrastructure, high quality of life, and access to a diverse consumer market make it an attractive location for businesses seeking growth and success.

In fact, U.S. News & World Report recently ranked Massachusetts as the best state for business in 2024. The state’s business creation rate of 3.53% shows a steady flow of new ventures. Plus, with 4.43 top company headquarters per 1 million residents, Massachusetts is home to some of the most successful businesses in the country, including Fidelity Investments, General Electric, and Liberty Mutual Insurance. 

Innovation thrives here, too, with over 1,200 patents per million residents. And with venture capital investments at $22.08 per $1,000 of GDP, there’s plenty of financial support for startups. Combine that with a manageable tax burden of 9.71%, and you’ve got the ideal environment to start a business in 2025.

Here are the topics we’ll cover in this step-by-step guide: 

• 14 steps to starting a business in Massachusetts
• Step 1: Decide what type of industry is best for your business
• Step 2: Conduct industry research
• Step 3: Create a business plan
• Step 4: Choose your business entity
• Step 5: Secure funds: Massachusetts small business funding, loans, and grants
• Step 6: Choose your Massachusetts business name and Massachusetts DBA
• Step 7: Pick a business location in Massachusetts
• Step 8: Find a Massachusetts registered agent 
• Step 9: Get a Massachusetts EIN and file your tax and employer identification documents 
• Step 10: Register as a small business in Massachusetts 
• Step 11: Register for your business license and permits in Massachusetts
• Step 12: Secure insurance for your Massachusetts small business 
• Step 13: Prepare to pay taxes on your business in Massachusetts
• Step 14: Set up your business bank account
• Additional resources to get your business started
• Frequently asked questions 

14 steps to starting a business in Massachusetts

Want to open a gourmet sandwich shop in Brewster or set up a government IT firm out of your home in Worcester? The state is full of possibilities for small businesses. With tailored insights and small business resources, we’ll go step-by-step on how you can get your venture off the ground in Massachusetts.

Step 1: Decide what type of industry is best for your business 

Determine the type of industry most conducive to the products and services you want to offer. Do you have a specific skill set or a degree in business? If you have a background in tech, for example, you can carve out a niche in almost any industry, from manufacturing to health care. Also, think about your passions and interests and how they align with your business idea.

Not sure where to start? Explore small business ideas to help spark inspiration.

Step 2: Conduct industry research

After narrowing down your industry, dig a bit deeper into the current offerings in your location, conduct a competitive analysis, and find out who your target customers or clients will be. Additionally, look at market trends to identify potential gaps or opportunities that your business can capitalize on. Taking the time to do this research now will give you a solid foundation for your business to grow and thrive.

Step 3: Create a business plan

Create a detailed business plan. Consider it your roadmap for success. It’ll help refine your vision, outline your goals, and create strategies to achieve them. It’s also a key tool for securing funding, attracting investors, and communicating your business’s potential.

Here’s what a typical business plan should look like:

• Executive summary: Provide a snapshot of your business by summarizing key points from the rest of the plan.
• Company description: Outline your mission, vision, and goals, along with the story behind your business idea.
• Market research and potential: Analyze industry trends, target audience behaviors, and market gaps you can fill.
• Competitive analysis: Show your competition and how you’ll stand apart from them.
• Products and services: Explain what you’re offering and why it’s valuable to your target market.
• Marketing and sales: Detail how you’ll attract customers, promote your brand, and generate revenue.
• Business financials: Include projections like income statements, cash flow analysis, and break-even calculations.
• Management and leadership: Highlight your team’s expertise and experience. 
• Funding request: Specify the amount of funding you need and how you’ll use it.
• Appendix: Attach supporting documents like market research, legal paperwork, or visuals.

With a well-crafted business plan, you stay focused and set your business on a path to success. Use a free business plan template as a starting point and contact the Massachusetts Small Business Development Center for personalized guidance.

Step 4: Choose your business entity: Types of business entities in Massachusetts

Select the right entity type for your business. You can choose from several business entity structures, each offering varying degrees of liability protection and tax implications. These include: 

Sole proprietorship

A business owned and operated by one person, with no legal distinction between the owner and the business.  

General partnership

A business owned by two or more people who share profits, losses, and management responsibilities.

Corporation 

A legal entity separate from its owners, with shareholders who have limited liability for the company's debts and obligations.

Limited liability company (LLC)

A hybrid business structure combining the limited liability of a corporation with the tax flexibility of a partnership. Learn more about LLCs.

Step 5: Secure funds: Massachusetts small business funding, loans, and grants 

Map out a funding plan to launch and grow your Massachusetts small business. Startup costs vary widely depending on your location and industry. Factor in costs like licenses and permits, inventory, equipment, utilities, insurance, marketing, and rent. These expenses can easily reach the five-digit mark, so having a rough estimate can help you determine how much funding you’ll need to get started. 

Here are some common funding options: 

Consider exploring state-specific options, including:

MassVentures Capital Investments

MassVentures Venture Capital Investments may assist early-stage tech startups with funding. 

Biz-M-Power Grant Program

The Biz-M-Power crowdfunding matching grant program provides financial assistance for Massachusetts-based businesses that need capital. 

Massachusetts Growth Capital Corporation

The Massachusetts Growth Capital Corporation offers a variety of term loans, lines of credit, contract financing, and more for small businesses in the state.

Step 6: Choose your Massachusetts business name and Massachusetts DBA

Choose a small business name that’s memorable and reflects your brand identity. As you narrow down ideas, conduct a business search through the Secretary of the Commonwealth of Massachusetts to ensure availability. 

DBA stands for Doing Business As, and it allows your entity to operate under a name different from its legal one. What’s the point of a DBA? These “fictitious names” allow you to come up with a name more descriptive than your legal business name.

Reserve your business name

Reserve your business name through the Secretary of the Commonwealth’s Corporation Division by filling out the Application of Reservation of Name. 

Filing a fictitious business name (DBA)

Fill out a Business Certificate to file a DBA. Each Massachusetts city requires you to file one, so take that into consideration if you plan to operate in multiple locations throughout the state. As an example, here is the Boston Business Certificate, but be sure to check with your local county clerk for the appropriate registration forms for your location.

Step 7: Pick a business location in Massachusetts

Choose the right location for your Massachusetts small business. It’s an important step because it impacts everything from customer accessibility to operational costs. You’ll also need to account for local taxes, licensing, and permits based on your jurisdiction. If you want to minimize overhead costs, consider running your business from home, which can help you save on expenses like rent, utilities, and commuting. 

However, if you’re looking to set up shop in a city, think about the following locations:

Boston

Boston is a major financial hub with a strong presence in banking, insurance, and asset management. Also, the city’s excellent public transportation and highway systems make it easy for customers and employees to get around. But, keep in mind that Boston is one of the most expensive cities to live and work in the U.S. This means higher operating costs, which can also affect your ability to attract and keep employees.

Springfield

Situated in western Massachusetts, Springfield provides easy access to major highways and a central location within the state. Plus, Springfield is close to Boston and several top universities, which can give you access to a talented workforce. Major industries here include manufacturing, distribution and logistics, education, and health care. Overall, It’s a great choice if you want to tap into these sectors without the high costs of a bigger city.

Worcester 

The city is developing a growing biotech sector, which is ideal if you’re looking for research and development opportunities. Research institutions, hospitals, colleges, and universities give you access to a strong talent pool and skilled workforce. Worcester offers a balance between the lower costs and opportunities of a midsize city and the resources of a larger metropolitan area.

Step 8: Find a Massachusetts registered agent

You likely need a point person for tax notices, legal subpoenas, and other government or legal documents delivered on behalf of your business. That’s where a registered agent comes in. In fact, the state requires most business structures to have a registered agent. For instance, you’ll need to list your registered agent individual or service on your LLC formation documents. 

You can appoint a trusted adviser, hire a professional registered agent service, or act on your own behalf. In any of those scenarios, the registered agent must be a person or company with a physical address in Massachusetts. The agent cannot have a P.O. box, must be available during regular business hours, and has to be 18 or older. Find a registered agent through word of mouth, by conducting an online search, or by appointing a trusted individual. 

Step 9: Get a Massachusetts EIN and file your tax and employer identification documents

An EIN (Employer Identification Number) is a nine-digit number the IRS uses to identify your business for tax purposes. Although Wisconsin doesn't require a state EIN, you'll need one to file payroll taxes and federal tax returns, open a business bank account, and apply for loans. You can apply for a free EIN through the IRS website.

Step 10: Register as a small business in Massachusetts

Register your small business with the Secretary of the Commonwealth of Massachusetts. Here’s what you need to know to get started.

Step 11: Register for your business license and permits in Massachusetts

Obtain any necessary licenses and permits for your business. If you have a professional business—whether contracting, hairdressing, engineering, etc.—you’ll likely need a business license to operate. Check with your professional association, local county clerk, and the state to determine which licenses and permits you need to legally operate. If you’re selling and handling food, you’ll need a food handler’s license and a food seller’s permit. Serving alcoholic beverages? You’ll have to get an Alcoholic Beverages State License. 

And any business selling tangible goods or listed services needs to apply for a sales and use tax permit through the Massachusetts Department of Revenue. 

Do you need a business license in Massachusetts?

Massachusetts doesn't have a general business license, but check with your municipality to ensure you have the licensing you need when starting a business. Visit Mass.gov to search for specific licensing and permitting requirements.

Step 12: Secure insurance for your Massachusetts small business

Get business insurance to protect against unexpected risks. It safeguards your company from financial losses due to accidents, lawsuits, property damage, and employee injuries. Choosing the right insurance package tailored to your specific industry and needs is vital for ensuring the long-term success of your business.

Types of small business insurance in Massachusetts

Here are the common types of coverage Massachusetts small business owners need: 

Step 13: Prepare to pay taxes on your business in Massachusetts 

Given the high cost of living in the state overall, tax burdens in Massachusetts are some of the highest in the country. Factor these in before you open your business so you have an understanding of your individual tax burden. 

Here’s a breakdown of some of the taxes you’ll need to be aware of when starting and operating a small business in the state:

Corporate excise tax

Businesses are taxed based on a combination of their income attributable to Massachusetts and their net worth or property value. Traditional Massachusetts corporate income tax is 8%; however, this tax can be complex, especially for multi-state corporations, so find an accountant well-versed in state tax laws. 

Personal income tax

Individual tax rates in Massachusetts are graduated depending on your income. They range from 5% to 9%. Sole proprietors and partners will pay personal income tax on their business profits. Keep in mind that any business with employees is responsible for withholding income tax from employee wages.

Sales and use tax

Businesses selling tangible personal property in Massachusetts must collect and remit sales tax. If you purchase items for business use without paying sales tax, you might owe a use tax instead. Both the sales tax and the use tax are 6.25%.

Other unique Massachusetts tax situations 

Businesses providing essential services like electricity, gas, and water may be subject to the public utilities excise tax. Consult with a tax professional to help you navigate the complexities of your industry and business structure’s taxes. 

Federal taxes

In addition to state and local taxes, all businesses must pay applicable federal taxes, including:

• Federal income tax
• Self-employment tax (for sole proprietors and partners)
• Employment taxes (if you have employees), including the Federal Unemployment Tax Act (FUTA tax)
• Excise taxes (for certain industries)

To ensure you understand your federal tax obligations, check out these IRS resources: Publication 334, Tax Guide for Small Business and Publication 583, Taxpayers Starting a Business and Keeping Records.

Tax credits and incentives for Massachusetts employers

Massachusetts offers various tax credits and incentives to encourage business growth and investment. Dairy farmers, for instance, may be eligible for a tax credit to help offset downturns in milk prices. Eligible corporate excise taxpayers might qualify for an investment tax credit if they lease or purchase qualifying tangible properties. You can find a list of tax credits here to see what applies to your industry.

Step 14: Set up your business bank account

Whether you’re starting a Massachusetts sole proprietorship or a small LLC, you’ll need to keep personal and business finances separate. Here’s how to organize the finances for your small business: 

1. Gather business documents, such as registration, professional license, and your federal EIN, to open your small business bank account.
2. Find an online or brick-and-mortar bank or a local credit union that offers the business banking services you need, whether it’s a minimum balance, low transaction fees, or electronic bill-pay services. 
3. Establish credit by applying for a business credit card and using it for related expenses. 
4. Choose an accounting software to gain a clear, real-time picture of your finances, vendor payments, and incoming invoices.
5. Hire a professional accountant or bookkeeper to help with financial planning and taxes. 

Additional resources to get your business started

There are several state and federal resources that can support your business with guidance, training, potential funding and more.

State resources

Massachusetts Small Business Development Center (MSBDC): MSBDC provides free, confidential, one-on-one consulting services to small businesses in areas such as business plan development, financial management, and marketing strategies. They also offer workshops and webinars to help entrepreneurs sharpen their skills.

Massachusetts Office of Business Development (MOBD): MOBD connects business owners with resources and incentives to promote economic growth in Massachusetts. They provide information on business assistance programs, tax credits, and support for accessing capital.

Massachusetts Growth Capital Corporation (MGCC): MGCC focuses on providing financial help to small businesses through loans and grants. They prioritize underserved communities and regions, making sure every entrepreneur has the support they need to succeed.

Massachusetts Export Center: If you're thinking about expanding your business internationally, the Export Center can help. They offer consulting, training, and market research services to make sure your business is ready for global markets.

Massachusetts Clean Energy Center (MassCEC): If your business operates in the clean energy sector, MassCEC provides funding, business development resources, and support to help bring clean energy innovations to market.

Federal resources 

Small Business Administration (SBA): The SBA supports small businesses through various loan programs, including the 7(a) loan, provides resources for government contracting, and offers counseling and training programs to help entrepreneurs start and grow their businesses.

Grants.gov: This centralized platform simplifies the process of searching for and applying for federal grants across various sectors. It also provides grant writing tips and has a Grants Learning Center featuring the basics of grants, eligibility, and more. 

Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR): SBIR and STTR programs provide research and development funding to innovative tech companies. 

SCORE: SCORE is a national nonprofit organization that partners with the U.S. Small Business Administration (SBA) to provide free mentoring and educational resources to entrepreneurs and small business owners. While not a direct federal agency, SCORE is an independent organization with a network of volunteer business mentors across the United States.   

U.S. Department of Agriculture (USDA); The USDA website lists grants, loans, and other programs and resources for farmers and other businesses serving rural America.

Frequently asked questions

How long does it take to start a small business in Massachusetts?

Starting a small business in Massachusetts typically takes several weeks to a few months, depending on the business structure, licensing requirements, and other factors.

Do I need a local business license if I only operate online in Massachusetts?

Even if your business operates solely online, you may still need to obtain local business licenses or permits. For instance, if your online business involves selling taxable goods or services, you must register with MassTaxConnect so you can file and pay taxes to the Massachusetts Department of Revenue. Also, check with your local city or county clerk if you need additional licenses or permits for your business.

Are there any tax deductions for running a business from home in Massachusetts?

Yes, you may be able to take advantage of the home office deduction provided by the IRS.

Disclaimer: 

This content is for information purposes only and information provided should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Inc. does it have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Inc. cannot warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers should verify statements before relying on them.