How to Start a Business in New Jersey

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by Chamber of Commerce Team
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New Jersey is a great location for entrepreneurs seeking big city access without having to endure the high cost of living in cities like New York and Boston. The Garden State is a fine place to live and work, and boasts one of the top ten most well-educated populations in the country, according to CNBC. This makes staffing your business with highly qualified employees an easy proposition.

In order to aid you in your venture, we’ve produced the definitive guide to starting a business in New Jersey, with detailed explanations of how to draft a business plan, register with the state, acquire business licenses, and more. We’ve also provided a list of the most active investors in the state, along with other key resources that’ll help you boost your business.

New Jersey small business statistics at-a-glance

  • 953,416 small businesses operate in New Jersey, which is 99.6% of the state’s total businesses.
  • 1.9 million New Jersey residents work for small businesses, accounting for 49.2% of the state’s workforce.
  • 72.27% of entrepreneurs in the state started their business by choice, rather than necessity.
  • 79.95 of New Jersey startups survive beyond their first year of existence.
  • New Jersey startups create an average of 5.88 new jobs in their first year, which is the 14th highest rate in the U.S.
  • 50.01% of New Jersey’s population has a bachelor’s degree or higher.

Sources: Kauffman, U.S. Census, U.S. Bureau of Economic Analysis, Small Business Administration

Starting a business in New Jersey in 12 steps

1. Develop an idea

Every successful business starts with a good idea. Ask yourself these questions:

  • Which product or service can your business provide that doesn’t already exist on the market? 
  • How does your business idea refine an existing product or service?

Determine your personal strengths and interests: developing an idea that suits your personality and positive traits will provide motivation to put in the long hours necessary in addressing the myriad challenges you’ll face in getting your business off the ground.

Figure out how to market your expertise: if your business idea is not something you totally believe in and can sell effectively, it will be much harder to succeed.

2. Do the research

Once you have an idea, it’s time to put it through the wringer and decide if it’s viable in the market. Conduct market research to arrive at answers to these key questions:

  • Is there a demand for your product/service in New Jersey? 
  • Who is your target market?
  • Do existing businesses in New Jersey offer a similar product/service?
  • What makes your business unique compared to the competition?

Coming up with satisfactory answers may require refinement, or even a total overhaul, of your original idea. Be patient: you’ll only want to proceed with the next steps after determining that a niche exists in the New Jersey market for your business idea.

3. Draft a business plan

Now it’s time to write the blueprint of your business. A great business plan should chart the path of your company from infancy to success while being able to attract investors to provide financing.

Your business plan ought to include the following sections:

  • Executive summary – An overview of your business and why it will be successful
  • Description of business – Explain the advantages of your business and the problems it solves
  • Market research – Provide research on your industry, target market, and potential competitors 
  • Organization and staff – Detail the nuts and bolts of your business; how it’s structured and who will run it
  • Product or service description – State what you are selling or offering
  • Marketing plan – Explain your strategy for attracting customers
  • Fundraising – The money you’ll need in the next five years to grow your business and how you’ll spend it
  • Financial forecast – Data and balance sheets providing a financial forecast for your business
  • Appendix – An optional section with supporting and/or requested documents like resumes, letters of reference, permits, etc.

Plan on running your business well

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4. Secure funding

Every business needs money to get off the ground. In fact 82% of businesses that fail do so because of a lack of cash flow, U.S. Bank found in a recent study. Your business plan should include a detailed estimate of the funds you’ll need to cover expenses for at least a year, so now it’s time to acquire the money.

If you aren’t wealthy enough to self-fund your business, you can choose from a number of other funding options. These include a loan from the U.S. Small Business Administration, taking out a loan from a commercial bank, launching an equity crowdfunding campaign, or securing funding from an angel investor or venture capitalist group active in New Jersey.

An angel investor is a wealthy individual who invests their personal finances in a startup, typically in the beginning stages, whereas a VC is a group of investors that will fund a business throughout its existence.

Which route you choose depends on the specifics of your business: angel investors typically invest smaller sums to help get a startup off the ground, while VCs invest larger sums of money in exchange for a greater say in the operations of a business. Smaller startups usually opt to pursue funding from angel investors.

Investors in New Jersey benefit from the state’s Angel Investor Tax Credit Program, which grants a tax credit of up to 20% on qualified investments in New Jersey tech businesses, with a maximum allowable credit of $500K. This provides an incentive for investors and stimulates investment activity in the state.

New Jersey Angel Investors and VCs

  • Jumpstart New Jersey Angel Network – A member-led network of successful entrepreneurs and finance professionals that invest in early-stage tech startups in New Jersey and surrounding states.
  • Golden Seeds – A large network boasting a membership of over 275 that has invested over $120 million in 170+ companies, to date, through 4 different funds.
  • Newark Venture Partners – A venture capital fund based in Newark that specializes in funding early-stage B2B tech companies. In addition to making investments, the firm sponsors an excellent accelerator program.
  • New Venture Partners – A highly active venture capital firm with an experienced team that boasts an investment portfolio of dozens of successful tech startups.

Additional Investor Resources

5. Decide on a legal business entity

The form of business entity you choose will affect many factors going forward. There are 3 main options to decide from:

  • Sole proprietorship – The name for running a business by yourself. Legally, you and your business are one and the same, with no separate legal entity for your business.
  • Partnership – It is legally identical to a sole proprietorship, except that it comprises two or more people.
  • Corporation – A complex legal structure that is a separate entity (providing legal protection to owners) from the owner and comprises directors, officers, and shareholders.
  • LLC – AKA “Limited Liability Company”, this is a hybrid entity between a sole proprietorship and a corporation that possesses advantages of both. An LLCs provides the liability protection of a corporation, yet isn’t subject to double taxation as the profits go through your personal tax return.

Nowadays, LLCs are the option of choice for small business owners as they are easy to manage and provide the benefits of a corporation while lacking their complex structure. Taxwise, they operate more like a sole proprietorship.

You may want to consult with an attorney to help decide which entity works best for your business.

6. Register your business

Once you settle on the form your business will take, it’s time to register with the state of New Jersey. This process is different depending on whether you are establishing a sole proprietorship, LLC, or corporation.

For sole proprietorships

Sole proprietors using their legal name to do business do not need to register with the state, but those using a business name separate from their legal name must file an application for registration of an assumed name.

First, perform a business entity name search to verify that your chosen name is available in New Jersey. If your name is free to use, you can fill out and submit an application for registration of an assumed name with the county clerk’s office in the county where your business is located.

Click here for a directory of NJ county clerks to get in touch with your local office. The filing fee varies from county to county.

For LLCs and corporations

The first step in forming either of these business entities is appointing a registered agent to handle process notices and other government paperwork on behalf of your business. This is a mandatory requirement in all 50 states. You can be your own registered agent if you have a physical address in New Jersey, but hiring a professional won’t cost much ($50-$200 a year) and ensures that paperwork is filed correctly.

Next, run a search to confirm that your business available, and then you can proceed to file the necessary paperwork to register with the state.

To create an LLC or corporation in New Jersey, you must file a Certificate of Business Formation with the New Jersey Department of Treasury: Division of Revenue & Enterprise Services. The form can be found online. The filing fee is $125 for and filing can be done online, or through the mail.

Starting a business? Our number one pick is ZenBusiness

  • Start for $0 plus state fees
  • Fast & simple services
  • 100% accuracy guarantee
Visit ZenBusiness
northwest logo Northwest Registered Agent
  • Same day filing service
  • Affordable pricing
  • Strict ethical code
Visit Northwest
  • Your first year is free
  • Wide range of services
  • Technical support
Visit Incfile

Our picks for registered agent services

ZenBusiness aims to help business owners start, run, and grow their businesses. When you’re getting started, take advantage of the filing options, like setting up an LLC and business formation plans. Later on, you might want to take advantage of their registered agent services, domain name registration, or annual report filing. Start for $0 + state fees.

Northwest can help. You’ll need to file official documents to establish your business. The process is a little different in each state, but Northwest has offices all over the U.S. and helps business owners with this very thing every day. Northwest also offers registered agent services, annual report filings, and some free legal documents that pertain to starting a business.

Incfile offers a great library of material to help first-time business owners figure out what kind of business they should set up. From there, Incfile will aid with documentation and filing procedures and demystify terms like registered agent, articles of organization, and EIN. The company has a strong reputation and great reviews online too.

7. Acquire federal and state tax IDs

Now you should obtain a Federal Employer Identification Number (EIN), which is like a social security number for a business and allows you to open bank accounts, handle payroll, and file taxes.

For sole proprietorships, an EIN is optional, although it is required for corporations and LLC’s. You can apply online for your EIN through the IRS website, or fill out and mail this form.

Each state has its own laws and taxes regarding businesses. Visit the New Jersey Division of Revenue and Enterprise Services website to register your business online to pay applicable state taxes.

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QuickBooks keeps everything organized in one place.

8. Open business banking and credit accounts

Opening a bank account for your business is crucial because it allows you to separate company assets from your personal assets, and makes filing taxes a lot easier. This is a recommended step, even if you are operating a sole proprietorship.

It’s also a wise idea to obtain a credit card for your business because it will help you isolate business expenses and build up credit for your company, which may help in securing investment in later stages.

Banks operating in New Jersey good for small businesses

We recommend Novo

Built for small business owners, entrepreneurs, and freelancers.

9. Get the necessary licenses and permits

Depending on the type of business you are opening, you may need to apply for a number of permits and licenses to operate legally. For example, a restaurant will need a liquor license, and a pawn shop will need a reseller’s license. The paperwork may prove a hassle, but it’s a necessary ordeal that will protect you from fines, lawsuits, and other legal hazards.

The State of New Jersey Business Portal has links to the government agencies tasked with issuing licenses and permits for a long list of occupations. If you have any questions about permits or licenses that you may need, you can contact the New Jersey Business Action Center at 866.534.7789. The office is open Monday through Friday from 8 AM to 5 PM.

10. Choose a location

Whether you are running an online business or opening a restaurant, location is everything. Be aware of the demographics of the neighborhood or town that you are considering: Are the local residents likely to visit your business? Will nearby competitors take a share of your potential profits?

New Jersey is home to many mid-sized communities with a small-town feel and big-city connections that are apt for launching a business in. Three of the best are Secaucus, Hanover, and Red Bank. All three have populations under 20K, yet boast a high quality of life and are conveniently situated near large cities like Newark, Philadelphia, and New York City.

11. Get insured

No matter what type of business you form, buying insurance coverage to protect yourself in the case of property damage or legal action is a good idea. In fact, businesses with employees are required by the federal government to have two types of insurance, while others are strongly encouraged, or required at the state level, depending on your business type. Consult with a licensed insurance agent to find out which types of insurance you should get.

Required forms of insurance:

  • Workers’ compensation: Covers medical costs and disability benefits if an employee is injured or becomes ill on the job.
  • Unemployment insurance: Provides benefits to workers after a loss of job through no personal fault.

Recommended forms of insurance:

  • Professional liability insurance: Covers losses as a result of property damage, medical expenses, libel, slander, and negligence claims.
  • Commercial property insurance: Covers property damage to business owned properties and possessions as a result of fire, theft, or storm.
  • Disability insurance: Provides short-term benefits for employees suffering an illness or injury. Required in certain states such as California, New York, and Hawaii.

12. Develop an internet presence

Establishing an identity on the web is an important investment in a business’s future development. Here are some key steps in the process:

  • Register a domain name for a company website (You can use, Bluehost,, Design the website and fill it with content. 
  • Create profiles on the popular social media services (Twitter, Facebook, Instagram)
  • Register a Google profile for your business
  • Create accounts on review sites such as Yelp, Google Reviews, and TripAdvisor

More than a website builder

Bluehost will get you up and running with a professional website and tailored hosting plan

New Jersey small business resources

New Jersey SCORE chapters

The nation’s leading business mentorship network has a number of chapters located around the state:

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