How to start an online business in New York?

Online Business in New York

The retail e-commerce industry and revenue have grown by leaps and bounds in the United States from $424.9 billion in 2017 to $767.7 billion in 2021. The percentage change in retail e-commerce sales growth was 31.8 percent in the USA in 2020 as compared to a worldwide growth of 27.6 percent. This only hints at the possibility of long-term growth for those planning to start an online business in New York. Apart from this, there are also several advantages that you can leverage if you start an eCommerce business in NYC. You can start your online business in New York as a Limited Liability Company or as any other form of business like a corporation or even a sole proprietorship.

What are the biggest benefits of doing business online in New York?

If you are planning to start an online business in New York then there are several advantages you may have over a brick and mortar business. The state of New York also provides several benefits to a small business in terms of overall cost of setting up and operating such a business. You can start an online business from home in NYC or even from co-working spaces. Let’s look at some of the biggest benefits:

• Infrastructure for eCommerce – Infrastructure is an integral component when it comes to making your business stand out or achieve the intended growth. Infrastructure for an online business or e-commerce is a little different from that of a traditional brick-and-mortar store. The good news is that if you start an eCommerce business in NYC then you can benefit from high-speed internet access, keeping in mind this is key to any online business. A report by broadbandnow.com reveals that 98.3% of New Yorkers have access to high speeds of 100mbps or faster.
• Low Business and Operating Costs – If you are taking your business online then one of the biggest benefits is the lower operational costs. If you want to start an eCommerce business in NYC then all you need is an operational website along with an integrated payment gateway so that customers can transact from the convenience of their home. This also means that you don’t have to buy or rent a commercial space and work straight out of your home thus cutting down overhead costs as well as costs associated with utility, space, etc.
• Other Salient aspects – There are several other benefits that you can leverage if you are planning to start an online business in New York. Some of them are:
  • Global access
  • 24/7 Availability
  • Improved customer service
  • Flexibility of operating from anywhere
  • Provide services in real-time
  • Manage your business from remote locations

Top online business ideas in NYC

Online businesses and e-commerce has become a megatrend as it benefits businesses of different sizes through lowering capital costs while providing a better consumer experience. Whatever type of business you operate over the internet, you will need an online business license in New York to ensure it runs smoothly. There are a variety of business ideas that you can choose from now that internet marketplaces have really opened up. Some of them are:

• Service Based Company – You can provide a wide variety of services and using the internet, reach out to a global audience depending on the type of service being offered. You can start an online business from home in NYC to provide such services. These services can be targeted as a local audience as well as to customers based overseas or at a remote location. Some of the top services include:
  • Content Development and Management
  • Application Development
  • Online dating services
  • Mass media and Digital Marketing
  • Financial Services like digital payment services
  • Online personal assistant
  • Stock or foreign currency trading
  • Dropshipping
• Product Based Company – You can start an online business in New York to deliver a wide variety of products. There has been a paradigm shift and gone are the days when people would have to walk into a retail outlet to purchase goods from electronics to food. Due to the higher access to the internet and millions of websites and applications; you can order just about any product online. This is an important reason why entrepreneurs prefer to start an eCommerce business in NYC. Some of the top business ideas in this segment are:
  • Fashion and Apparel
  • Beauty and Personal Care
  • Entertainment including e-books
  • Home-based bakery
  • Virtual thrift shop
  • Electronic goods sale and repair
  • Any commoditized products
  • Self-created brands of products
  • Health-conscious food
  • Pet food

Starting an Online Business in New York

The future of online business marketplace or eCommerce seems quite bright as social media platforms have become major influencers in reducing the B2C (business to consumer) gap. You can start an eCommerce business in NYC or a home-based business with ease due to the flexible eCommerce environment and availability of many business resources. Of course, there is a process towards setting up a business online successfully and ensuring you apply for the right online business license in New York.

1. Prepare your New York online business idea and plan

You can start an online business in New York but you need to have a business plan in place first. A business plan is created based on an idea of what you are planning to sell or provide to your customers. Once you have an idea then you need to take into account the various factors that will help you to convert your idea into a sustainable online business. Even if you start an online business from home in NYC, you will need to create a business plan based on the resources you have and an in-depth study of the market dynamics. Some of the important components of a New York online business plan are:

• Executive summary
• Company overview
• Online demographic profile
• Market analysis
• Products or services
• Online revenue model
• Social Media Marketing plan
• Operations plan
• Logistics and Shipping (if required)
• Financial plan

2. Choose your New York online business name

Choosing a proper business name is quite an important step towards building your online business. The name is crucial as when you start an online business in New York, your customers are going to identify your brand, products or services with the business name. The name is an identity and hence is used for purposes of marketing, branding, and sales. This is not all; the new business formation process requires a company name. There is certain business naming guidelines that you will be required to follow and they are:

• The naming guidelines will vary according to the business structure. So if you start an eCommerce business in NYC as a corporation then it should contain words like “corporation” or “incorporated” or abbreviations like INC. or Corp., pursuant NY Bus-Corp L § 301 (2020)
• The chosen business name should be distinguishable from any other names existing in the database of the NYS Department of State, Division of Corporations. This is made possible by conducting a name availability search.
• If your chosen name is available then you will need to reserve it by filing the Application for Reservation of Name along with the appropriate fee.

3. Register your online business with NY SOS

Whether you start an online business in New York from your home or operate it out of a retail store or commercial space; one of the important requirements is to hire a reputable registered agent. The NY business law makes it mandatory to designate and continuously maintain a registered agent in the state. A registered agent plays several important roles right from providing service of process to ensuring your company is in compliance with all requirements of the Department of State.

Start your online business in New York today!

4. Obtain all necessary licenses and permits for online business

Once you have applied for incorporation or registration of your new business, the next step is to make it operational. This can be made possible by applying for and obtaining an online business license in New York. Your business may require a single license or multiple permits and licenses depending on the location and activity the business is involved in. If you start an online business from home in NYC, you may still require certain permits. These licenses and permits can be categorized as under:

• Licenses and permits based on the industry your business activity is categorized under
• Local or County Licenses and permits
• Professional Licenses offered through the Department of State.

5. Buy website domain and build an eCommerce website

Since you are planning to start an online business in New York, it is important for your business to have the proper online presence. This is possible through the following steps:

• Choose a domain name – The domain name can be the same or similar to the name that you have reserved during new business registration.
  

  For Example: If you want to start an online business from home in NYC that sells cookies made fresh at home then you can use a name like “cookie Jar”. You can reserve this name with the state and also look for a domain like cookiejar.com or cookiejar.org.

• Choose a website hosting – If you want to start an eCommerce business in NYC then the right hosting matters. When choosing a hosting provider there are certain factors to be taken into consideration like hosting servers and plans, customer support, security encryption, bandwidth, root access, payment gateways, email accounts, shopping cart, and control panel among others.
• Create a Website – You can have your website designed by a professional web designer or choose an existing template or use an e-commerce website builder. In order to create a website, you need to have your images and content ready so that you can start an online business in New York as quickly as possible. It is also important to ensure that the website is available for all devices like a computer as well as a smartphone.

6. Get EIN and File your taxes

An employer identification number or EIN is also known as the business tax ID and this is a unique nine-digit number that is issued by the Internal Revenue Service (IRS). Most forms of businesses would need to obtain an EIN for tax purposes including those who start an online business in New York. This tax ID is also known as the Federal Employer Identification Number (FEIN) and has several other benefits like helping you to obtain a business loan and making the process easier to open a business bank account if you plan to start an eCommerce business in NYC.

7. Open a bank account

Apart from obtaining an online business license in New York, you will also need to have a business bank account in order to make an e-commerce website or company operational. Normally, if you already have an EIN, it is easier to apply for a bank account. There are several benefits of operating a business bank account but the most important is that it will help in ensuring your business income and expenses are kept separate from your personal income and expenses. This can further ensure your tax calculation and filing of returns are easier.

8. Comply with taxes and other regulatory requirements

After you start an online business in New York, you will have to maintain annual compliance and meet all necessary state requirements. These include filing annual tax returns in the state. Some of the important regulatory requirements include:

• Whether you start an online business from home in NYC or from a brick and mortar office, you will be required to file a Biennial Report also known as the annual report. This has to be filed once every two years with the New York Department of State – Division of Corporations.
• Most businesses will be required to obtain an online business license in New York. In order to keep your online business operational, you will need to renew these licenses and permits from the respective authority.
• If you start an eCommerce business in NYC then you will be required to collect sales tax. You will hence be required to file sales and use tax in the state, which is a total of 8.875 percent.
• You may be levied other forms of taxes depending on the specific business activity.

9. Market your business

Marketing is an important aspect of every new business and although the marketing tools may be the same, the strategy will be different for an eCommerce company. When you start an online business in New York, the entire marketing strategy will revolve around reaching your customers, creating a brand value, and revenue generation. You will be required to incorporate different tactics based on what you are offering, competition, and the customer demographics. Some of the tactics that will bear result if you start an online business from home in NYC are:

• Boost your online presence and create a strong digital engagement through various social media channels
• Create Search Engine Optimized (SEO) content for your blog or website
• Introduce and promote visuals like videos and images that help in strengthening your product, service or brand
• Advertise on relevant social platforms using engaging imagery and interesting content
• Create meaningful partnerships with complementary brands for cross-promotion
• Participate in different business-related online events including virtual conferences and webinars
• Integrate mobile commerce (m-commerce) to reach out to your customers

Looking to start an online business in New York?

You can start an eCommerce business in NYC with ease due to the availability of high-speed internet access for businesses as well as customers. The online marketplace is constantly evolving and hence you need to have a strong digital marketing strategy in place. Having a great business idea and turning it into a growing business is very much possible and IncParadise can assist you with ensuring you are able to start an online business in New York with ease.