Philadelphia is a top place to launch a start-up — but success requires more than passion | Expert Opinion

It seems that Philadelphia’s reputation as a good place to start a business got a boost this past year.

The city ranked 13th among 350 “start-up ecosystems” worldwide in Startup Genome‘s 2025 Global Startup Ecosystem Report, which considers educational resources, labor, taxes, and funding opportunities.

The region attracted over $900 million in equity funding and acquisitions in 2024-25, according to the Greater Philadelphia Chamber of Commerce; expanded biotech and robotics facilities; and launched AI education initiatives — all supported by public-private partnerships and university-led R&D.

Chamber CEO Chellie Cameron said the Startup Genome ranking “affirms our region’s emergence as a global destination for innovation, business, and opportunity.”

From 2019 to 2024, the U.S. saw more than 21 million new business applications, marking the largest-ever spike.

Software giant Intuit recently reported that and “33% of U.S. adults plan to start a business or side hustle next year — a 94% year-over-year increase.” LinkedIn says the number of “founders” listed on the platform grew 69% last year.

Are you thinking of starting a business this year? Before you quit your job, here’s some practical advice.

When I started my business, I did so while having a full-time job. I worked a lot of hours. But that’s because I needed to build up an income stream to support me for when I eventually left the corporate world.

Smart entrepreneurs know their finances. They’re good at math or have advisers that help them. They recognize the importance of accounting.

Gabriella Daltoso, a founder and CEO of Philadelphia-based medical device start-up Sonura, recognized the importance of understanding her numbers and embarked on a program to learn the basics of accounting. A trained scientist, she sought out help from people with business expertise at the University of Pennsylvania, where she spun out the business.

“I got a freshman finance textbook, learned the terms, and then learned from other founders’ experiences,” Daltoso said. “I found mentors and professors who would help me at Penn. People can be incredibly helpful when you reach out.”

Start-ups need capital, and for financing, it’s important to have a solid business plan with realistic projections of revenues and expenses. You need to establish relationships with banks, investors, family members, friends, venture capitalists, or anyone else that could be a source of financing. You should have enough money in the bank to support yourself and your family for at least two years because it will likely take that long to get your business cash positive.

James Massaquoi, a board member at the Seybert Foundation and former analyst at Philadelphia venture capital firm Osage Partners, emphasizes planning capital needs early, ideally before launching. Massaquoi urges founders to deeply understand their cost structure and assumptions before getting in too deep.

“Talk to bankers and other sources of capital before you really start the business, so it’s a conversation — not another checklist,” he said. “Spend more time modeling out costs than forecasting profits because costs fluctuate dramatically, especially in the first two years.”

Think you’re busy now? Wait until you start a business.

You will spend much more time launching, running, and growing your enterprise than you expect. You will work nights, weekends, and crazy hours. People will be happy for you and supportive, but in the end, it’s all on your shoulders.

This kind of stress could put a strain on your personal life. You will not succeed unless your family members understand this and are ready to support you.

“Work-life balance is really about how much work you need to do for this to be successful — and how much pressure you feel to make it succeed,” Massaquoi said.

Passion for your business venture is important, but profits are just as important. Your model needs to be satisfying a market need if it’s going to have a legitimate chance.

The typical life span of a start-up is two to five years, with 70% going out of business before reaching their fifth year. The odds are against you.

The ones that do survive fix problems and do so better than their competitors. They watch their pennies and are open to change based on what their customers need.

Talk to a tax and legal adviser and form a company — maybe a corporation, partnership, or limited liability company. Use these advisers to help you register your business with the state and the federal government.

Create a professional website. Establish a commercial mailing address (not your home) and a toll-free phone number.

Pay in your estimated taxes, and file your tax returns on time.

As you hire employees, create policies and procedures and try to offer the types of benefits that established businesses provide like health insurance, retirement plans, and flexible time off.

If you are truly running a business (and not just a hobby), you need to act like a business.

As a start-up founder in Philadelphia, you’re not alone. The area has a number of great resources to help your small business get funding and grow.

Introduce yourself to the Small Business Development Center at Temple University’s Fox School of Business. Reach out to SCORE, which is part of the Small Business Administration. Get involved with nonprofits that provide education, financing help, and mentorship to start-ups, such as: the Philadelphia Alliance for Capital and Technologies, Venture Lab (University of Pennsylvania), Broad Street Angels, Startup Leaders, Entrepreneur Works, and Urban League Entrepreneurship Center.

Take advantage of the free space and other resources offered by the Free Library of Philadelphia.

Also, surround yourself with as many experts as you can afford. Have a good accountant, lawyer, coach, and advisers on hand to help you make decisions. Build these costs into your business plan and projections because these people are critical for your business success.

“Your expertise isn’t having all the answers; it’s learning from anyone who’s willing to share,” Daltoso said. “It’s really important to hear everyone, synthesize what’s useful, and move forward with confidence.”