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.
We at IncParadise are one of the reputable New York registered agents and have a team of experienced professionals who can help you to start an eCommerce business in NYC. We can help with the incorporation or registration process like we have helped many new business owners in the past to establish their company in New York.
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.
The New York State Department of State Division of Licensing Services, the New York State License Center, and the New York State Office of the Professions provide valuable information pertaining to any type of online business license in New York. Alternatively, a top registered agent like IncParadise can also provide guidance on business licenses required by your company or if you are planning to start an online business from home in NYC. You can also avail of our Business License Research Report for business licensing information in the 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.
Business banking can also help in limiting your personal liability while providing purchase protection to your customers. If you are planning to start an eCommerce business in NYC then there are two types of business accounts that you can choose from depending on your need. You can opt for the traditional business checking account or a merchant account, the latter being used primarily for accepting credit and debit card payments.
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