How to Start A Business In NYC
Mon, 14 Jun 2021 | Written by Corporate Suites Staff
New York City has the third-largest economy and the third-best way to acquire venture capital in the U.S. This makes it a great choice for entrepreneurs wanting to start a business. If you are thinking about opening your firm in The Big Apple, this post will give you helpful information about what you need to do.
Believe it or not, this could be the perfect time to start a business in NYC…Here are a few good reasons why now is the perfect time to start a business in NYC:
- Record-low rental rates: In the first quarter of 2021 vacancy rates reached 16.3 percent, up from 11.3 percent at the same time last year. This year, the average rental price for a Manhattan office space dropped below $73 per SF for the first time since 2018, making it ever-so-appealing at a little over $72 per SF.
- You’ll be around like-minded people: New business owners thrive by being around other entrepreneurs, and today there are over 2 million small businesses in NY that employ 4 million people, more than half of the state's workforce.
- New York continues to fuel growth: New York City Mayor, Bill de Blasio, has tasked city agencies to continue fueling small-business growth. As a result, incubators and coworking spaces are springing up throughout the city.
- Tax breaks for small businesses: If you are a small business owner, you’ll be happy to know that the state has instituted several tax benefits and incentives to help ease the burden on small business owners.
New York Business Facts and EnvironmentA few astounding “did you knows” about NY businesses are listed below:
NY Business Facts
- New York’s economy is the third-largest in the U.S., outranked only by Texas and California. Also if it was a country, the NY economy would rate as the 13th biggest one in existence.
- Home to the NY Stock Exchange and NASDAQ, NYC is a particularly attractive location for anyone looking to start a business in the communication, financial or media sectors
- New York City, with a population of somewhere around 8.5 million, has earned a reputation as being one of the most diverse cities in the United States.
NY Start-up EnvironmentNew York City reigns as the top place to open a small start-up in the U.S., topping even Silicon Valley, according to an annual study of the top small business cities in America. Aspects that make New York’s start-up environment arguably one of the best in the country are its tight-knit business communities, a large assortment of major corporations and a copious amount of start-up capital.
NY Business Statistics at a GlanceThe Empire State has some impressive statistics when it comes to business. Here are some that are particularly astounding:
- The Big Apple is THE city of small businesses. Here why: Of its approximately 220,000 businesses, 98 percent of them are small, having fewer than 100 employees. Additionally, 89 percent are exceptionally small, with fewer than 20 employees.
- New York State’s GDP was valued at over $1.5 trillion, which is 8 percent of the nation’s total.
- The financial activities sector roughly made up a little over 29 percent of the New York State’s GDP. To put this in perspective, when you combine the 2nd and 3rd top fields, transportation, trade, and utilities and professional and business services, they make up 27.2 percent of the state’s GDP.
- New York City has a staggeringly talented global talent of over four million exceptional workers, with roughly 3.2 million of them attaining a bachelor's degree or higher. That’s more than what’s found in Boston, DC, Los Angeles, San Francisco and Philadelphia put together. That fact alone was a massive draw for Noom's CEO, Saeju Jeong.
What's required to do business in New York City?Creating a New York start-up of your own can be a challenge, but it can also be very rewarding. What follows is a helpful guide you can reference while achieving your entrepreneurial dreams.
Step 1: Create a Business PlanA business plan is a document that acts as a roadmap for structuring, running and nurturing your start-up. Business plans also help you get funding from financial institutions or bring on new partners who want to receive a good ROI from your business. Here are some essential components of a robust business plan:
- Sales & Marketing: Use a marketing plan such as SEO research or surveys to better understand your target market and direct competitors better. Ask relevant questions such as: What potential clients are you targeting? How will you grab attention and transform people into consumers who want to buy your products?
- Product Development: What niche does your product fall into; what problems do your product or service solve? What makes your product stand out, or how is it unique from the one your competitor offers?
- People & Partnerships: What function will your hires fulfill? What relationships do you need to form with partners for success?
- Financial Planning: How many sales and customer counts do you need to reach the break-even point and how much money is needed to get there?
Step 2: Register Your BusinessBusiness structures legally fall under unincorporated and incorporated business entities. A list of the most common legal structures for small businesses are below:
- Sole proprietorship
- General partnership
- Limited Liability Company (LLC)
- Choosing a unique business name
- Selecting a registered agent that acts on your behalf to accept legal and tax documents
- Getting an Employer Identification Number (EIN), which is a number assigned by the IRS to assist in identifying your businesses for tax purposes.
- Filing the business formation documents
Step 3: Finance Your BusinessBrand new companies, like any other business, need funds to operate. Luckily, there are a few things you can do – like calculating your business costs before seeking financial assistance – and the plan will help you find the right-size funding sources for your NYC business requirements. A detailed financial plan can help you get organized and be smart with your expenditures, too. A few funding sources to think about are bootstrapping (which is providing the capital for your business yourself), crowdfunding sites, your friends & family, small business grants and small business loans. Learn how to plan, raise, and manage funds for your start-up here.
Step 5: Find and Plan Your SpaceYour business location will determine the type of licensing and permits needed, along with your company’s growth potential. You could always find and plan a new space yourself, but that is often easier said than done. Enter commercial tenant brokers, who act on your behalf in real estate rental transactions. Commercial tenant brokers are very knowledgeable about the real estate market and know how to unearth hidden savings in NYC. From providing serviced office space to more efficiently negotiating your lease, they will only make your life easier.
Step 6: Hire a TeamUnless you happen to be a solopreneur team of one, constructing a strong team is a crucial step in any successful business venture. Hiring the right people isn’t all you need to do in this step, though, and you need to stay compliant with legal requirements for hiring. Actions you must take include reporting new hires to NY State and registering with the IRS for employee taxes. Also, classify your employees correctly and clarify unemployment insurance requirements and workers' compensation insurance requirements at this time. You will likely need to train your employees before preparing to open shop, too. Don’t forget to give them compliance training on sexual harassment prevention – it’s NY state law.
Step 7: Prepare to OpenNow is an exciting time, as you are getting ready to open your establishment for business. As part of opening and operating, you’ll need to:
- Obtain licenses, permits & legally required posters. If they are required to be displayed for inspection, post them in an easily noticed location.
- Comply with COVID regulations
- Give customers clear receipts and invoices that show prices and your business name and address on them.
- Prepare and pay your taxes.
- Limit air pollution. If you release fumes into the air, you may be subject to the New York City Air Pollution Control Code (Air Code).
- If your company creates any, you have to register any hazardous materials that have characteristics that go above threshold amounts. These materials are registered under the NYC Department of Environmental Protection’s Right-to-Know program, and you can learn more about them on the NYC.gov webpage Facility Inventory Form FIF - Community Right-to-Know Program.