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How to Start a Craft Business in Pennsylvania

Pennsylvania is one state that strives to simplify the process involved in starting a craft or any other type of small business. The state of Pennsylvania prefers to cut through red tape and offer small business entrepreneurs speedy entry into the marketplace. Offering a one-stop online location for start-up forms, names, filing requirements and necessary applications, Pennsylvania’s Open for Business website is a valuable resource for small business owners.

Things You'll Need:

  • State Tax Numbers
  • Employee Identification Number
  • Business License
  • Internet Connection
  • Business Plan
  • Computer/Phone

Determine a business structure for your craft business. Many small businesses are structured as sole proprietorships, but entrepreneurs who desire asset protection can structure their craft business as a limited liability company—LLC—or limited liability partnership—LLP. Visit the Pennsylvania Open for Business website or contact the Corporation Bureau of the Pennsylvania Department of State at 717- 787-1057 to register your craft business.

Register a name for your craft business with the Corporation Bureau of the Pennsylvania Department of State. Download the forms required for registering the name of your craft business based on its structure at the Pennsylvania Open for Business website. Information pertaining to registering your craft business name is also available by calling 717-787-1057.

Visit the IRS website to obtain an Employer Identification Number, or EIN. If you structure your craft business as a sole proprietorship and you have no additional employees, this step is not necessary.

Develop a business plan that outlines the goals for your craft business, along with a projected cash flow analysis. Include an income statement and a balance sheet in the business plan. A business plan is a necessity if you intend to apply for a small business loan.

Register tax accounts for your craft business with the state of Pennsylvania. Tax accounts are based on the structure of your business and on whether or not you hire employees. The main types of tax accounts you will need for your craft business may include sales, employer withholding and unemployment compensation. Registration forms and filing information are outlined on the Pennsylvania Open for Business website.

Contact your local township municipality, city or borough regarding local taxes, local zoning requirements and local licenses for your craft business.

Find a manufacturing location for your craft business based on the type of crafts you wish to make. For example, if you are creating wood products, you may need a woodworking shop. If your crafts business is small enough to operate in your home, make sure that you check local Pennsylvania ordinances on operating a home business.

Determine where you plan to sell your crafts. Online retailers, such as Etsy and Art Fire, specialize in handcrafted merchandise and may be one outlet for your retail sales. Local boutiques and craft fairs are other outlets for retail sales. If you need a local retail store front, find a location that is within your budget.

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