Have you always wanted to start your own business but you’re not sure where to begin? Opening a home-based business in New York is one of the easiest ways for entrepreneurs like yourself to get started in today’s fast-paced business world. While there are several important steps involved, following the checklist in this guide can help you get your new business venture off the ground.
New York’s economy is the third-largest in the country, and if it were its own country, it would be one of the world’s most powerful. Small businesses make up 99.8% of all businesses in the state, with more than half of New York’s private workforce working at one of them. With the state government’s pro-business initiatives and recent tax benefits for entrepreneurs, it has never been easier to start your own company in New York. Whether you’re starting a business in NYC or elsewhere in the state, there’s plenty of opportunity here.
In the U.S., there are roughly 15 million home-based businesses, and the average hourly rate for a home-based entrepreneur is $53. The number of home-based businesses has increased by more than 50% in the last decade. The U.S. Small Business Administration says that most home-based businesses cost around $3,000 to start, and most cost less than $5,000.
You might be able to make more money as a freelancer or consultant than you would at your current job. It’s also possible to start a successful home side business while still maintaining your day job.
Home-based business owners are often more productive because they don’t have to commute. Plus, working from home can help you save money on gas and other expenses. And you’ll also save money on clothes since you won’t need to dress up every day. There’s a lot of flexibility in working from home, including time off for family obligations and other interests.
Whether you’re looking for small-town business ideas or other home-based options, there are plenty of opportunities for a well-planned home business. Make sure to do market research to determine whether there’s a need for your New York business idea and how much you can expect to make from it.
Now that you’ve researched your idea, it’s time to test its viability. It’s important not to invest in an idea until you know for sure whether or not it can be profitable. Our resources can help you field-test your business ideas to help you determine whether to move forward or not. Here are some ways you can test your ideas:
Find out if your new business idea will solve problems that customers are willing to pay for by thoroughly researching the marketplace. Begin by asking the following questions to study the market, competition, and location. The answers to these questions will help you target customers’ needs and wants.
A company’s name is one of the most important parts of a business, but picking out an appropriate and catchy name can be tough. These tips can help you focus on your new company’s perfect name.
Keywords are the words and phrases your prospective customers type into internet search engines to find companies like yours. Add other towns, states, and countries to your search to find similar companies outside of your marketing area for inspiration. Don’t use another company’s exact name — just use those names to brainstorm your own unique brand name.
It can be difficult to think up a catchy name for your brand-new business venture. Take that list of keywords and play around with them until you find that perfect new startup name. Here are some tips on coming up with company names that will get people talking.
Combine two words – Blend the real names of two or more owners into an interesting compound business name.
Acronyms – An acronym is a name made up of initials that creates a new word. An example of an acronym business name is LEGO (short for “leg godt,” Danish for “play well”) pronounced as one word.
Wordplay – Puns are jokes that exploit the different meanings of words. They can make funny and catchy business names.
If you want to form a New York business, requirements vary depending on your legal structure.
Begin by searching the New York business name database. If you file for an identical business name as someone else, your request will be denied. For a business name to be possible for registration, it must be both unique and available.
Next, search the U.S. Patent and Trademark Office database to find out if another business has already trademarked your desired business name.
Filing an assumed name in New York, also known as a DBA name, allows your existing or future business to conduct business using a name other than its legal business name. This can be helpful if you want to change the name of a business without having to file an amendment with the state. The fee for filing a Certificate of Assumed Name in New York is $25 plus any associated county fees.
Before building your site, check if your business name is available as a domain. If it is, register the name before someone else can.
Name your home business
Enter your desired name to get started
The entity you choose to operate your business will dictate the legal protection afforded to it, which in turn dictates how much personal liability you face. Depending on which kind of business you intend to run, how the day-to-day operations will be carried out, and various other factors, a particular business structure may be of more value to you than another. That said, in general, LLCs are highly popular for many types of small businesses.
Sole proprietorships are one-person businesses that don’t require registration with the state, so they’re easy to set up. However, they carry unlimited personal liability, so if your business is sued, your creditors can pursue your personal bank accounts, house, car, etc. Sole proprietors can either use their legal personal name or take the optional route of using a DBA.
A general partnership is a legal relationship that can be formed by a written agreement between two or more business partners. This entity type is nearly identical to the sole proprietorship, except it has multiple owners. It also has no official startup documentation and unlimited personal liability. There are also other types of partnerships that can include different profit splits, although the general partnership is the most common.
A popular form of business structure is the limited liability company (LLC). Each state has its own regulations regarding LLCs, although they have many common elements in all states.
An LLC is a hybrid structure, a mix between a corporation and a partnership. The LLC has a formal registration requirement, like a corporation, and also limits the owners’ personal liability. This means that a lawsuit against the business can’t target the personal assets of its members. However, it can choose partnership-style taxation, which can save lots of money compared to corporate taxation.
Some businesses should incorporate, most notably those seeking venture capital investments, which rarely go to other entity types. Corporations are pretty similar to LLCs in many ways, including personal liability protection. However, LLCs are much more flexible structures that are also typically easier to start and maintain. There are two types of corporations for taxation purposes.
An S corporation differs from a C corporation in that it chooses to pass credits, deductions, income, and losses through to the shareholders, who add these to their personal income taxes. This avoids the “double taxation” of C corporations, in which the same money is taxed first at the corporate level and then at the personal level.
Nonprofits don’t distribute profit to anything other than advancing their own organization’s efforts for a better future. They can have some additional red tape and legal considerations compared to for-profit entities.
An EIN is the business equivalent of your personal Social Security number and is used in various steps like opening a bank account or paying taxes. You can apply for an EIN for free from the IRS, or order one from us.
You’re responsible for making sure your business has the proper federal, state, and local licenses and permits to operate legally. A pivotal part of this process for many entrepreneurs is determining what type of licensing they’ll need. We offer a business license service in which we’ll figure out which licenses and permits your company requires. Remove the guesswork from this important process!
If your business develops new inventions, manufacturing processes, or products, you may want to protect your intellectual property with patents, trademarks, and copyrights issued by the U.S. Patent and Trademark Office. All businesses should be highly protective of their intellectual property.
Houses and apartments were built for residences, not business purposes. As such, when you are using residential properties for commercial purposes you may need to make certain adjustments. Operating a business out of your home will require serious consideration of these critical criteria:
Check with your insurance broker to see what provisions are included in your homeowners’ policy to protect you against losses from your home business activities. Common losses include inventory theft, property damage, and fire from commercial tools and equipment. You may need to increase your insurance coverage or purchase a separate policy to protect your business assets and personal property.
Consider increasing the security of your home to protect against theft of either the physical or digital assets of your new business. Often, this means the installation of an alarm system with monitoring services to protect your physical goods and also computer security software to safeguard your digital material.
Your personal and family privacy is an important consideration when launching a business from home. How will you manage your family schedule, client visits, and employee work schedule? Do some brainstorming and discuss with your family to get their support before launching your business from your family’s home.
Businesses often require more powerful utility systems than those in traditional homes. So, depending on the type of company you’re launching, you may need to upgrade your electrical, water, and sewage systems to accommodate increased usage.
If your business is an online company, you may want to invest in professional-grade battery backup systems to protect your electrical supply during outages. Some home business owners invest in generators to ensure an uninterrupted power supply. Also, internet-based businesses may need to upgrade their internet service and install an automatic cloud-based backup system for their computer files.
Zoning Property Use Laws
Contact your local zoning board to determine the regulations of your town for home businesses. In many localities, home businesses that create excess trucking, foot traffic, vehicle parking, noise, or waste are prohibited. Your town may have more specific rules about the number of additional vehicles parked on your property or the street, the number of visitors, open hours, and lighting regulations.
Seemingly no house ever has enough storage, and if you plan to start a business out of your home, you may need to increase your storage space. This could mean emptying closets or repurposing certain rooms or the garage for your business activities. Some entrepreneurs set up shop in outside sheds or storage units. Evaluate your storage needs and make appropriate accommodations to house your new home business.
Many home businesses face the same tax laws as businesses located in commercial warehouses or retail spaces. Your income tax is based primarily on the type of business entity you operate (sole proprietor, LLC, corporation, etc.) and the state in which you reside.
The sales tax you’re required to collect from your customers is calculated based on the type of products you’re selling and the county or city where you are headquartered. This can be confusing when it comes to selling items online, either directly to consumers from your own online stores or through online marketplaces such as Etsy or eBay.
Speak to your accountant about your situation to be sure you comply and don’t get any costly tax surprises. Also, they can advise you on the many tax deductions and credits home-based entrepreneurs can claim on their personal tax returns.
Most municipalities don’t require a specific home business license. Most licensing requirements are based on industries, not the property type of your business headquarters.
Begin by completing the form DOS-1336 titled “Articles of Organization.” Complete the form with the following information for your new business:
Submitting the Articles of Organization online costs $200 and takes roughly seven business days, and the Certificate of Publication requires a $50 fee. The Certificate of Publication needs to be filed with the Department of State within a 120-day window following the filing of the DOS-1336.
Starting a business without any planning is one of the most common mistakes entrepreneurs make. A well-written business plan is one way you can invest in your future success.
The importance of writing the plan is not entirely in its finished product, but what you discover about your business as you prepare it. During the process of writing your business plan, you may uncover aspects of your business strategy that won’t work. It’s far better for your startup’s success and survival that you discover these weaknesses on paper now instead of in real life later.
Think of your business plan as a map for your entrepreneurial journey. You wouldn’t set out on a long hike across unknown territory without a field guide and a detailed map. So, don’t dive into a new business and spend money, time, and emotional energy without a business plan.
Your business plan must answer these critical questions:
1. What’s the purpose of your business?
2. Who are your target customers?
3. What are the benefits of doing business with you?
4. How do you plan to reach these customers?
5. Where will your company be located and what type of facilities will it need?
6. What kind of employees will you need, and how many people should work for your company at first?
7. Do you have any competitors in this market space, and if so, who are they and what differentiates them from each other and yourself?
8. What does success look like for this business one, five, and 10 years from now?
9. What are the most important tasks that need to be completed before launching a new product or service?
This is an important stage where you’ll calculate financial projections to determine if your business idea is profitable and determine your pricing strategy. Also, you’ll need to ascertain the amount of capital necessary for both your startup costs and ongoing working capital.
There are two distinct types of costs: those you incur as you set up your company (startup costs) and those that’ll continue as you operate (operational costs and working capital).
One-time investments to open your store or launch your website include such items as legal business formation (and an LLC formation service, if you use one), building renovations, and manufacturing equipment. These are relatively easy to calculate. Research each item and simply add up the list for your total setup costs.
Ongoing expenses to continue business operations include rent/mortgage, supplies, employee salaries, and working capital. These costs are more difficult to calculate because they have many more variables. As your sales increase, so will your labor, material, and inventory needs.
The next step is to forecast your sales and expenses and generate a business budget. Here’s the right way to create a business budget.
Working capital refers to the funds that help you meet the daily expenses and needs of running your business, such as payroll, software, tools, and supplies. Setting appropriate expectations for working capital can be a make-or-break issue for a small business.
Begin your financial planning by determining your best pricing. Pricing your product and service is a bit of an art-science combination. There are different methods to calculate your prices for your new startup business based on multiple factors such as market demand, competitive prices, and overhead costs.
Here are some of the most often-used pricing strategies for small businesses.
This method is when you price your product higher than your competitors. This technique is often used at product launches to create a high-value perception in your customers’ minds.
Market Penetration Pricing
Gain buyers by offering the lowest prices on goods and services to enter a crowded marketplace. It’s common for entrepreneurs to use this technique initially. If not planned and executed carefully, this is a dangerous type of pricing strategy for your bottom line and business survival.
Utilizing the power of people’s emotions to buy is the key to success with this pricing strategy. For example, $199 feels much cheaper than $200, even if it’s only a dollar difference.
Now that you have a great business idea, you’ll need money to get started in your new venture. While there are some businesses that you can start with almost no money, most startups require some form of a business loan or capital investment.
Here are some good ways to fund your startup launch.
Running a business is risky. From injuries and natural disasters to lawsuits, a wide variety of perils can force you out of business and leave your family without income. Business insurance protects against these unforeseen risks to keep things running smoothly so the company doesn’t have to close its doors.
Your home-based business may not have employees, so you might not need workers’ compensation insurance. Similarly, business liability insurance may not be necessary if you don’t plan on having customers or employees visiting your business location (AKA your home). However, at a minimum, you should contact your homeowners or renters insurance provider to see if you need any additional coverage for your home business.
To accept customer payments, cash, checks, or credit cards, your business will require a separate bank account from your personal or family bank accounts. All small business experts and the Internal Revenue Service recommend the separation of business and personal bank accounts. It’s also crucial to maintaining the personal asset protection afforded by the LLC structure. Depending on the bank and type of account required, it could take a few days to get things set up, so don’t wait until the last minute.
Whether you’re starting a sole proprietorship or an LLC, having the proper accounting setup is essential. It’s far better to have your bookkeeping established right from the start rather than find out down the road that you’ve done things wrong and now owe money to the IRS.
Depending on the particular business formation type you’ve chosen, there may be reporting requirements for accounting, especially payroll and taxes, that require regular and ongoing attention. Consult the IRS for your tax payment and reporting schedule.
Unless the business is completely automated or you run it all yourself, personnel (employees, freelancers, or subcontractors) may be required. When hiring, consider the following points.
Choosing the right supplier for your business is vital. If your supplier isn’t reliable or doesn’t provide high-quality products, your company will struggle to deliver well-priced goods and services that meet your customers’ expectations. How do you choose the right supplier?
Branding your business involves more than just naming the company. It also involves having a logo, a signature font, unique company colors, and a slogan for your business. You’ll also need a business website.
Your prospective customers are increasingly turning to the internet for answers, but not every entrepreneur goes through the necessary steps of getting online for their company. Get a competitive advantage and start your website early in your launch.
You can also make a name for yourself with social media. Use it as an outlet to tell people about what’s coming and offer coupons when you release new products or services. Depending on your target audience, certain social media platforms will be more beneficial than others. Match your target customer with the platforms they frequent most and focus your efforts there first.
Advertising comes in many forms, from billboards to a website to a storefront sign. In the good old days, there was a focus on flyers, and today it’s social media. Regardless of the method, getting your business name out is essential to growing your client base. Don’t just rely on word of mouth!
Defining a solid strategy and budget for advertising is a significant step for any business. Here are some low-cost advertising ideas to get you started:
After launching your business, it can be hard to know what to do next. If you’re a small business owner looking for advice on how to grow their company, here are five ways you can grow your startup after launch:
1) Introduce new products and services
One of the best ways to grow your company is by introducing new products and services that diversify how you provide value. New products breathe new life into companies and give you opportunities to contact customers and promote your entire line.
If you’re looking for new product ideas, try talking to your customers and seeing what they think would be valuable. You can also ask potential clients about their needs before presenting a solution.
2) Collaborate with other companies for joint ventures
Join forces with other companies that have similar goals in order to get the word out about your company and products. For example, if you sell office supplies, contact local stationery stores that specialize in paper or ink pens and promote your businesses side-by-side.
3) Get involved in trade shows or conferences
Trade shows are excellent places to meet customers new and old. Make sure to bring plenty of promotional materials and enough staff members so everyone can answer any questions or concerns immediately.
Business partnerships can be found at industry conferences, too. Networking is essential to the success of a startup. Attend relevant conferences and introduce yourself as an entrepreneur with new ideas. Networking can be done online through social media, but it’ll have more impact if you meet face-to-face at industry events or trade shows catered specifically to your niche market.
4) Expand into new markets
Increase your marketplace by shipping your goods internationally or expanding your service area to new cities or states. If this sounds like an option for growth that would benefit both parties, consider partnering with another company outside of your area in order to share distribution and marketing costs.
5) Run contests and sweepstakes
Promotional contests are a great way for companies to increase the visibility and awareness of their brand. The purpose is typically engagement, loyalty, or sales promotion rather than a marketing campaign with the sole aim being lead generation (though contests can be used in this way as well).
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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