New York isn’t the most tax-advantageous state for businesses, but many New York business owners run successful companies within the state. If you live or will conduct business within the state, it’s the most obvious place to locate your business.
Formalizing your business provides connotes credibility, and it can also afford legal protections if you incorporate. Perhaps the most common way to structure a business is as a limited liability corporation.
If you’re starting a business in New York, here’s what you should know about establishing the business. You’ll find both general insights and tips, and notes that are more specific to New York LLCs.
Choose an Available Business Name
After you have a concept for your business, one of the first steps is to name your business. You might already have the perfect name in mind, or you may want to brainstorm some creative ideas. As you consider different naming options, it’s a good idea to create a shortlist of potential business names.
You’ll want the shortlist in case your first choice isn’t available. There are already many businesses in New York, and many names are thus already taken. You’ll need to make sure that your chosen business name is still available.
The New York Department of State has a business name search, which you can use to search all the names of registered businesses in the state. This is the easiest way to check whether a business is already using your preferred name.
If a business is already using your name idea, you might be able to alter the name slightly so that it’s unique. Consider adding a location (e.g. Business Name of CNY), personal name (e.g. Joe’s Business), or some similar demarcation.
Register Your Business in New York
Your business will become official (and you’ll receive a name) when you actually register the business with the New York Department of State. You have a few different options:
- Sole Proprietors: Sole proprietorships require little to set up, and are simple to run. They also afford virtually no legal protection — you can be personally sued if your business is liable.
- Limited Liability Corporations: LLCs are the easiest way to actually incorporate. An LLC is easy to set up and run, requiring only some basic fees and paperwork. They provide a “corporate veil” that protects you personally even if the business is sued, and they also offer some accounting flexibility when you file taxes.
- Limited Liability Partnerships: LLPs have legal and tax benefits that are practically identical to those of LLCs. LLPs may be preferable when two separate businesses are joining together on a specific project.
- S Corporations: S corps are a more complex business structure for small and medium businesses. They have a corporate veil and some tax benefits for businesses with employees.
- C Corporations: C corps are the most complex business structure. They have a corporate veil, tax benefits, and fundraising options. This structure is usually reserved for medium and large businesses.
Of these options, incorporating as an LLC in New York is one of the most popular options for small and medium businesses. The LLC structure offers a good combination of legal protection, tax benefit, and simplicity.
Get Necessary Permits and Licenses
New York has a variety of permitting and licensing requirements. Whether your business is subject to any of these depends on what industry your business is in, and where your business is located. You might need state and/or local permits.
One of the most common permits is a ”seller’s permit,” which generally allows businesses to sell goods/services within the state. Other licenses are industry specific, such as liquor licenses. Many municipalities have their own permitting requirements for various types of work.
Good resources for local permit information are your business’s municipal clerk and county clerk. The Department of State and any applicable governing body are good state-level resources to check with,
Get a Business Bank Account
A best practice is to keep all personal and all business finances entirely separate. To do this, you’ll need a business bank account.
If you’ve already registered your business, you shouldn’t have any issue setting up a business bank account. You can use a local credit union, regional bank, or national bank. Some will have minimum deposits and a few might charge nominal fees, so you may want to compare account details at a few different places.
A basic checking account is the first to set up, and you can additionally set up a business savings account. This is also the time to apply for a business credit card if you intend to use one.
Secure Funding for the Business
If you haven’t yet, take time now to secure the funding that your business requires. This could be as simple as transferring personal funds into the new business bank account, or you might actually have to raise capital. You’re prepared to pitch friends/family at this point, and you can also apply for financing.
Of course, it’s helpful to have a business plan before you start actually establishing your business. You also should have some notion of where your funding can come from. This step isn’t so much to brainstorm where you can get funds, but rather to actually execute your funding plans.
You should be close to actually starting operations, and that may necessitate hiring one or more employees.
Many successful businesses, including even many of today’s large companies, began as one-person small businesses without employees. Don’t feel as if you must hire employees. If you’re able to do everything solo or with a partner, that’s often the best way to begin.
Not all businesses can be run without employees, however, and sometimes you know you’ll want employees so processes are more efficient. If you’re going to hire employees, post your job openings and begin interviewing applicants now.
You can look for employees through local classifies, national job boards, personal networks, word of mouth, or any other place where you could find workers.
Build Your Online Presence
No matter what type of business you’re starting, every business today needs an online presence. E-commerce and influencer businesses have an obvious need to be online. Local businesses need to be visible on searches so that customers can find them, and professionals will have clients check their websites for credentials. No one can afford to neglect the importance of the internet.
Your business at least needs a website, and getting active on a couple of social media platforms is usually beneficial. Select businesses might go further by using paid ads, promoted posts, or other tactics.
Growing an online presence can be entirely DIY, or you can hire someone to help you.
Promote Your Business With Marketing
Implement a marketing plan to help people find your business. Successful businesses are often always marketing, but it’s doubly important to market when your business is brand new. People won’t discover your business if you don’t tell them about it.
You’ll have to devise a marketing plan that makes sense for your business. Perhaps start with a smattering of online and in-person tactics, and see what works most effectively. You can put your efforts behind the most effective marketing methods once you identify them.
Start Your New York Business
The process of starting a business in New York State is fairly straightforward once you’re familiar with the general steps involved. Get your business name and incorporate to begin. You’ll be well on your way to serving your first customers or clients soon, and hopefully many more thereafter.