How to start a business in New York

If you’ve ever dreamed of starting your business in the Empire State, it’s important to understand how to navigate this terrain legally. Otherwise, your new venture could be sidelined before it even gets off the ground.

This article provides a brief overview of how to start a small business in New York.

1. Choose a business idea

Every business exists to solve a problem. One of the first steps in starting a small business is to determine what challenges your products or services will solve – and for whom. This means:

• Choosing a target customer audience

• Identifying their pain points

• Outlining how your business can help

• Selecting a location (i.e., online or physical or both)

• Determining startup costs, funding, and pricing for your product or service

After working through the above action items, you should be able to develop a general idea of your short-term and long-term growth potential. Although everything is speculative at this stage, if the numbers make sense, you’re ready to move on to the next step.

2. Research business name availability, branding, and trademarks

At this next stage, it’s time to choose a brand identity – complete with a business name, relevant trademarks, business website URL, logo, and even a color scheme. For many budding entrepreneurs, designing a brand identity can be one of the most enjoyable steps in the startup process.

There are still some requirements involved, such as checking whether the name you want is available to use. In most cases, you should be OK if no other business in New York (and in your niche or industry) is using the same name.

In other words, it’s acceptable to have two Acme LLCs operating in the same state if one sells stereo speakers and the other provides landscaping services. You can easily verify the availability of any potential names using the New York Business Name Database. If you plan on filing for patents or trademarks, check the Federal Trademark Database.

3. Write a business plan and acquire funding

Unlike most of the steps on this list, writing a business plan is optional, though it’s a good idea to have one for long-term planning. A business plan is especially important if you decide to bring on team members.

Keep in mind that business plans are basically required if you plan to secure outside financing. Investors, loan officers, and even friends and family members will expect to see a detailed plan before giving you money. The same is true if applying for small business grants in New York through the state’s Grant Library.

4. Determine a business structure

For legal and tax purposes, you must choose a corporate structure for your business:

• Sole proprietorships are the easiest to set up. That said, they offer the least protection since your personal assets and liabilities are not distinguished from those of your business.

• General partnerships can be structured as multi-person proprietorships in which personal and business finances are blended. They can also be structured to provide separation between the two.

• Corporations offer the most protection, making it the corporate structure of choice for larger companies and multinationals. However, given the sheer amount of paperwork and time involved, this option is less common among small businesses and startups.

• Limited liability companies (LLCs) offer a nice balance of setup effort and legal protection. Starting an LLC in New York allows you to launch with as many “members” as you want, with each person’s assets and liabilities separated from the business.

You can always convert to a different corporate structure later if you feel your business might benefit from greater legal protection.

5. Obtain an EIN (employer identification number)

An EIN is essentially a Social Security number for your business. It’s what the IRS uses for tax purposes. Having an EIN is required for most of the steps below.

The IRS allows you to apply for an EIN online in the language you feel most comfortable.

6. Acquire licenses and permits

Starting a business in New York often requires securing certain licenses and permits. The exact requirements depend on the nature of the business. For example, freelance graphic designers may not be heavily regulated in the state, however:

• Bars need to obtain liquor licenses

• Architects must be trained and certified

• Restaurants must pass food safety inspections

To see whether your business might be subject to licensing requirements, click here.

7. Set up employer obligations

The term “employer obligations” refers to the payroll, taxes, and benefits you’re legally required to take on once you begin hiring employees. Depending on your business, these obligations might also include offering medical insurance, OSHA compliance, and mandatory industry-specific training.

8. Open a business bank account

Regardless of which corporate structure you choose, having a dedicated business banking account can make your life much easier. In addition to keeping your business and personal finances separate, this approach allows your business to access credit and make large-ticket purchases.

9. Be prepared to take payments

Once you have a business bank account, it’s time to start looking into payment acceptance. At Clover, small business owners often choose our payment processing solutions, since we:

• Provide PCI-compliant data security

• Support multiple payment options

• Support omnichannel payment processing

In addition, we provide seamless integration with many third-party applications from the Clover App Market.

10. Initialize marketing strategy and continued business development

You’re just about ready to make that first sale. Before opening your doors, it’s important to develop a marketing strategy and business development plan.

• Your marketing strategy is how you get the word out, with most small businesses using a blend of paid advertising, social media, email, and events to generate buzz.

• Your business development plan is how you turn those early first-timers into repeat customers. Many small businesses use loyalty programs and promotions to keep their users returning.

Additional resources for starting a business in New York

We hope this guide offers you some insight on how to start a business in New York. As with any roadmap, there will be unexpected twists and turns along the way. Fortunately, countless resources exist to help you navigate this terrain, including the:

• NY State Business Portal

• NY State Small Business Hub

If you need help accepting payments, managing employees, tracking inventory, or running your business, you have us on your side. To start, schedule a free consultation with a Clover Business Consultant today.

This information is provided for informational purposes only and should not be construed as legal, financial, or tax advice. Readers should contact their attorneys, financial advisors, or tax professionals to obtain advice with respect to any particular matter.