10 Steps to Starting a Business in Boston
The Red Sox curse is reversed, the Big Dig is dug, and South Boston is more movie script than crime-blotter fodder. Parts of Boston have transformed drastically in past decades, but some things will never change.
"Boston maintains its identity while keeping up with the times," says Rafael Carbonell, deputy director of the Office of Business Development in the city's Department of Neighborhood Development. "The concentration of brains here is phenomenal."
More than 30 colleges and universities call Boston home, including Boston College, Boston University, and Northeastern University. With Harvard and MIT next door in Cambridge, it's no surprise that wicked smart entrepreneurs call Beantown home.
Bostonians take pride in sharing business insights with new arrivals who want to set up shop in the Hub. Here's what they had to say:
1. Take a study break.
"You'd be hard-pressed to find other places where people in the industry would be so open and willing to help others get started," says Brenda McKenzie, director of economic development for the Boston Redevelopment Authority, Boston's planning and economic development agency.
McKenzie recommends taking advantage of local resources at an early stage, before the business even gets to the regulatory point. She notes that several of the city's colleges and universities offer free services.
"They will help you walk through the business plan and craft it," McKenzie says. For example, Boston College's Carroll School of Management offers free consulting to start-ups and existing companies. Boston has the free volunteer business counseling service SCORE. Even the Boston Public Library's Kirstein Business Library has extensive resources for entrepreneurs.
2. Learn - and follow - the rules.
Navigating state and local rules and regulations might not be as challenging as navigating some of Boston's winding streets, but doing so successfully takes smart planning.
The city's Inspectional Services Department handles zoning and permitting, and offers a free 15-minute clinic weekly to help applicants through the process. Any food- or health-related business needs to contact the Division of Health Inspections. Depending on the industry, new businesses might need license from both the state and the city.
Boston's small business resource guide (PDF) describes licensing and registration step by step in clear language. For the restaurant business in particular, where there are quite a few regulations, McKenzie points to the city's customized Restaurant Roadmap online.
"The restaurant business is a very tough business with very tight margins, so that's why having the food business guide is so useful," she says.
3. Look at growth industries.
The city has a legacy of groundbreaking innovation that includes Alexander Graham Bell's first phone call to his assistant Watson and the world's first successful kidney transplant. Technology, biotech in particular, still has an upward trajectory in Boston, McKenzie says.
Boston might not be the most centrally located city for a business that does national shipping, but on the local level, some sectors continue to thrive. The food sector in particular is still big business. "Even the creative industry is really growing and burgeoning here in Boston," McKenzie says.
4. Secure funding.
"This has always been recognized as a very vibrant venture and private-equity community," says Frank Carpenito, CEO of Dancing Deer Baking Co., which is based in Boston. "That continues to be the case. There are dollars to be invested and spent."
Carpenito, a natural foods industry veteran, recently took over the reins from company cofounder Trish Karter. Having spent 15 years with the company, she's currently considering different paths that combine sustainability with social justice. "I'm just amazed at how many worthwhile and interesting business opportunities and businesses there are that hit on the things I'm interested in," she says.
In addition to offering business loans and grants, the city has dedicated funds for nonprofit organizations looking to make capital improvements, green retrofits in particular. "It not only helps them be more energy efficient, it allows them to keep those dollars going for services for city residents," Carbonell says.
5. Get local support.
Several years ago, Boston Mayor Tom Menino was seeing vibrant business development on the ground but noticed a lack of city involvement in supporting and communicating it. Advisers told him to separate the city imitative from government so in early 2008 he launched a nonprofit organization, Boston World Partnerships. Rather than focusing on conventional print ads, the organization would focus on customer service.
"For us, the fundamental problem we solve for entrepreneurs is helping them navigate this region," says Dave McLaughlin, executive director for Boston World Partnerships. The organization tries to achieve that by having 150 "connectors" who are local leaders in their industries. Connectors are rigorously vetted and serve as a crowd-sourced help desk.
Rue La La, a brand sale website based in Boston, was quickly outgrowing its space and thinking about leaving the city in search of cheaper space. The online company, which arranges for members get access to private sales on high-end merchandise, told connectors. "We were able to bring resources to them," McLaughlin says. As a result, the company signed a lease on a 43,000 square foot space in the city.
In addition, Boston World Partnerships selects two startups every month from a pool of applicants that tell the organization whose brains they'd like to pick. The organization arranges the sessions.
6. Pick your neighborhood.
Early on, the city encouraged the growing Dancing Deer company to stay in Boston. Looking for a way to retain its local workforce and have a positive presence, the company transformed an old seafood processing facility in Roxbury.
"When we started growing out of our facilities, it was easy to call the city and ask them to help us find more space, which they did," Karter says. When they outgrew that space, the company found its current location in the Hyde Park neighborhood.
In January, Mayor Tom Menino announced the formation of the Boston Innovation District in an underdeveloped section of the South Boston waterfront. The 1,000-acre area includes Fort Point, Seaport Square, and the Marine Industrial Park. The idea is to transform it into a bustling, affordable knowledge-based neighborhood where young professionals with diverse areas of expertise can work, live, and thrive.
"By bringing together these clusters in one tight area, you get a more diverse economic and creative environment that everyone can benefit from," McKenzie says.
Boston was the first city to develop an urban Main Streets program, and now there are 19 of these districts. These unique commercial districts receive financial and technical assistance from the city to revitalize areas, promote strong neighborhoods, and strengthen the businesses in them. According to the city, the districts have a 95 percent occupancy rate.
7. Move in.
It's logical that the city wants to make it easy for store owners to open attractive places to shop and visit. To help, Boston offers matching signage grants that help owners improve their facades. "That's been a hugely successful program," Carbonell says. "In our last fiscal year, which runs from July to June, we did 100 storefronts across the city."
Boston was the first major city to put green standards into its building code, McKenzie says. "We're finding more and more with businesses and employees that they really want to be part of the green movement," she says.
A partnership called Boston Buying Power allows businesses to come together and purchase energy in bulk to keep overall costs down. So far 1,500 businesses are enrolled, Carbonell says, with an average savings between 10 and 15 percent. The aggregate savings is around $2 million.
8. Build your workforce.
With the high number of colleges and universities, it's not surprising that nearly 80 percent of Boston residents older than 24 hold at least a high school degree. And contrary to its reputation, half the population in metropolitan Boston is non-white.
"You have this incredibly well-educated, diverse city," says McLaughlin. "The geography is relatively small, but within that you have incredible pockets of expertise."
It's also a young population with a median age of 31 years. A city swimming in talent is advantageous for startups looking to recruit. But that talent also knows it has options. "You're not on an island," McKenzie says. Those working in the high tech sector in particular know they have plenty of choices.
The quality of life in New England is also an attraction for employees, Carbonell says. Affordable housing can be found in neighborhoods that are a short train ride from downtown Boston. The outdoorsy city is also home to Frederick Law Olmsted's Emerald Necklace parks, myriad bike paths, and it's not a far trek from mountains and beaches.
9. Ditch the car.
Boston opened the nation's first subway in 1897. Today, the Massachusetts Bay Transportation Authority's public transit system includes buses, trains, and commuter rails. More than a million people ride the T on an average weekday.
"You can live and work in or near the city without getting in a car that much," says John Jacobs, co-founder and chief creative optimist for the Boston-based company Life is Good. For professionals, the average commute is less than 30 minutes.
Plans are currently under way to add stations along the Fairmount branch of the commuter rail to form what's being called the Indigo Line. The project promises to connect underserved communities along the southeast corridor to South Station, where the Red Line goes to MIT, Harvard, and Tufts.
The $22 billion Big Dig put Boston's elevated highway in an underground tunnel. No longer divided by the Central Artery, the North End is now home to public green space called the Rose Fitzgerald Kennedy Greenway. Carbonell says the Greenway is attracting microentrepreneurs to the area, including the Clover Food Truck, which serves low-cost vegetarian food.
"It's been unifying," McKenzie says. "It's easy to get downtown to the North End."
10. Get to know the locals.
McLaughlin says the city is much more of an open place than it used to be. "I would propose that Boston has changed a ton even in the last three years, never mind the last ten," he says. "It's a place that more and more supports entrepreneurs.
"Culturally I always thought it was unique because it's a blend of history, the present, and the future," Carbonell says. "We see that play out daily in our business community."
Jacobs says he likes the pace. "We definitely had some friends in the business try to woo us to Oregon," he says. "But we love Boston more than any city in the country."