4 Things NYC Residents Must Know to Properly Setup Your Online Store
There are so many intricate rules and regulations potential business owners have to follow when trying to start an online business, and they vary from state to state. But New York is one of the states where starting an online business has the same process as starting a physical store… as far as obtaining licenses and permits required. Sure, the actual operations of an online store differ from that of a physical store, but the core of starting an online business in New York is one and the same as any other New York business.
According to the Small Business Administration, there are over 2 million small businesses operating in New York and they’re employing around 4 million people… that’s more than half of the state’s entire workforce! Those statistics make starting a business in New York look easier than it really is, simply because there are so many small businesses operating there…
But don’t be fooled by the stats… there are indeed some important considerations to factor in before you can hang up your virtual “Open For Business” sign. If you’re a New York resident looking to start an online business, here are four important factors you need to know about in order to properly set up your online store.
WHAT EVERY NEW YORK RESIDENT SHOULD KNOW ABOUT STARTING AN ONLINE BUSINESS
1. YOU NEED 2 GENERAL BUSINESS PLANS
To start an online business in New York, it’s not necessarily required to have two business plans but it’s highly recommended… and that’s definitely something you should know.
You need a business plan that will focus on how the business will be managed and operated in great detail. And then you will need a financial plan that focuses specifically on how the budget and finances of the business will be handled.
A. BUSINESS PLAN:
In creating your business plan, it will not only need to include how the business will be managed and operated but also additional information on things like:
- How you plan to implement an effective marketing strategy (how to build your business using social media, content marketing, SEO, etc.)
- Any outstanding features your business provides that beats the competition
- The future goals of your business
- Why your business will succeed
- Who your ideal customer is
- Products/services provided
B. FINANCIAL PLAN:
Your financial plan needs to cover everything from initial startup costs and how the business will be funded to an estimated projection of cash flow and how much volume is needed to break even. You want to push yourself for success but you also have to be realistic as well… a simple mistake could make your business flop and go belly-up.
2. THE TAXES ARE PRETTY HIGH
One of the biggest challenges New York entrepreneurs face is high taxes. Sure, taxes are just things that come with the business of conducting business wherever you are, but New York’s tax code includes so many metrics to calculate a tax bill it makes the entire process extremely confusing.
The base tax for business income is 6.5%, and for small to medium businesses, that is extremely high… It sometimes pushes those businesses out of the cityscape all together. But some businesses sometimes qualify for a reduced rate at around 5.5%.
Although New York is known as the “concrete jungle” where dreams are made from, it’s also the same place where the high taxes can crush those dreams as well. Just be sure to do ample research on New York’s business tax code.
3. CERTAIN PERMITS AND LICENSES ARE REQUIRED
Just like any other business, New York requires online businesses to also obtain proper permits and licenses to legally operate. These permits and licenses are issued by state and local county in which your business is run but it’s dependent on the type of business you’re running as well as if you’re selling a product or service.
For example, if you’re selling products that could be potentially involved with any type of dangerous activities (alcohol, firearms, retailing drugs, etc), you’re going to need federal permits and licenses. If you’re unsure about whether or not you’ll need a federal or local permit and license, or both, check out these helpful resources.
- For local licenses and permits: New York City Department of Consumer Affairs
- For federal licenses and permits: New York State Department of State Division of Licensing Services
Once you’ve obtained the necessary permits and licenses for your business, it will then be time for you to register your online business with the New York Secretary of State and the get your employer identification number (this is what will identify your business when it’s time to pay business taxes).
4. THE LABOR MARKET IS COMPETITIVE
In starting your own business, you may just operate solely by yourself, but when and if you decide to hire employees, you’re going to have to develop an attractive compensation package to attract quality employees.
Luckily, New York is home to some of the world’s most prestigious colleges and universities, along with a diverse group of skilled workers, so finding quality talent to join your team won’t be hard to do. Just be sure you know that if you’re wanting quality talent to join your team, you’re going to have to pay for it, but it will be worth it!
LAST BUT CERTAINLY NOT LEAST…
Once you’ve met all the legal requirements for the state of New York, you can then start to work on your actual online business. You just have to find the right website builder to get started. Shopify.com is a great website builder, especially if this will be your first time starting an online business.
Most people look for the “free” website builders in attempts to cut costs somewhere because New York is already so expensive. But those just aren’t as good of quality and don’t give you nearly as many design and layout options.
With this being your first business venture, consider “skimping” in another area. You want to invest in a quality website builder, plus, with Shopify, you get a free 90-day trial to see how you like it. And the way online businesses are booming now, just imagine how many sales you can make in 90 days!