Steps to Starting a Business

Dec 5

Written By Bianca Rodriguez

Step 1: Finding the right business venture for you

When looking to start a business, it is best to look for something that aligns with your personal goals and interest as well as something that uses your natural talents.
When you start your own business, there are times when it feels very difficult and overwhelming. Picking something that best aligns with you will allow you to stay motivated during those times.

Step 2: Pick your business name

This is arguably one of the most important steps.
Your name is the first thing people notice and see of your business. It is going to be the most creative part of your whole business.
When creating your name these are some things to keep in mind:
- The name needs to be creative and stand out
- The name needs to be memorable
- It gives them the vibe of your business
- It indicates who you are, what you value, and what you offer
This is a list on restricted word in NYS that cannot be in your business name unless you have permission.
- https://dos.ny.gov/system/files/documents/2018/10/restrictedwordsphrases.pdf
Then you need to make sure it is available in the state that the business is going to be in (If you plan on having it in multiple states, this is where your headquarters would be). To do this in NYS you need to check the NYS Division of Corporations: Corporations and Business Entity Database
- https://apps.dos.ny.gov/publicInquiry/
- In the boxes this is what it should be
  - Search By: Entity Name
  - Entity Name: (This is where you type what you want to name your business)
  - Entity Type: All Statuses
  - Search Functionality: Contains
  - Entity List: (Make sure you click all of them)
- Once you click search the database it will let you know if a business with that name already exists. If one pulls up, you need to change the name. If it says “No business entities were found” you are good to go!
Run a google search of your name to make sure a competing business in a different state isn’t using your name
You will need to add to your name depending on which business structure you choose.
- Say you want to name your business “Rose and Bloom”
- If you choose an LLC as your business structure, then you have to legally name your business “Rose and Bloom LLC” or “Rose and Bloom Limited Liability Company” or “Rose and Bloom L.L.C”
  - Keep in mind when you are picking the addition that when it comes time to post in
IF YOU PLAN ON HAVING A WEBSITE- buy your domain once you have your name to ensure that you get it.

Step 3: Write your business plan

If you are starting a business with another person or group of people this is 100% the first thing you have to do.
If you are planning to fund the start up costs for your business yourself and you are the only owner, then this is not completely necessary to start. However, it still is something you should have at some point.
If you are looking for an outside source to fund the start up cost this is the first thing to get done.
5 key parts to a business plan
- Executive summary- Mission statement, what the product/ service is, the target market, competition, goals, ETC (This summary is designed to intrigue the reader)
- Company summary- business name and structure, location, your competitive advantages, ETC (This summary is designed to inform the reader)
- Market Analysis- current trends and themes and how you are going to do better, detailed description on target market, market growth projections, ETC
- Management Team- how you are organizing and managing your business, what are the responsibilities and duties of each position, how much will they be paid, ETC
- Revenue Projects- Sales forecast, budget, cash flow statement, income projections, assets and liabilities, ETC

Step 4: Choose a business structure

There are 5 main business structures to choose from
- Sole Proprietorship – This is an informal business model where the business is not separated from the owner. This means that 100% of the profits from the business goes to the owner. However, 100% of the financial liability is also on the owner including debt and any legal matters like suing
- Partnership – similar to sole proprietorship except there are multiple owners. Still informal and 100% financial liability
- Limited Liability Company (LLC) – Combines personal asset protection of a corporation with the flexibility of a sole proprietorship or partnership.
  - Most small business choose this structure due to the easy maintenance, favorable tax treatment, and personal asset protection.
- Corporation – legal entity owned by shareholders. They have a lot of formal regulation and is better if you are looking for a lot of investors. Companies like Apple fall under this category.
- Nonprofit Organizations – funded by donations not investors. Typically created for a social cause and are tax exempt. Red Cross would fall under this category.
It is always recommended that you consult legal or/and financial professionals when determining which structure to choose for your business.

Step 5: Register the Business

Depending on which structure you chose will determine the next step.
- Sole Proprietorships and Partnerships are to be filed in the county they are located.
- LLC are to file Articles of Organization with the state they are in
  - If you want to print and mail in for NYS https://dos.ny.gov/system/files/documents/2021/02/1336-f.pdf
  - If you want to do it online https://appext20.dos.ny.gov/ecorp_public/f?p=2201%3A17
    - Choose Domestic Limited Liability Company (the SECOND link in the first Box)
    - It will take you to this link https://www.businessexpress.ny.gov/app/answers/cms/a_id/2443/kw/domestic%20LLC
    - This gives you an overview of everything as well as the cost.
    - You will have to make a NY.gov account for the business and then click the link to apply and it will walk you through the steps easily.
- Corporations are to file Certificate of Incorporation with the state they are in
  - If you want to print and mail in for NYS https://dos.ny.gov/system/files/documents/2018/10/1239-f.pdf
  - If you want to do it online https://appext20.dos.ny.gov/ecorp_public/f?p=2201%3A17
    - Choose Domestic Business Corporation (For Profit) (the FIRST link in the first box)
    - It will take you to this link https://www.businessexpress.ny.gov/app/answers/cms/a_id/2153/kw/domestic%20business%20corporation
    - This gives you an overview of everything as well as the cost.
    - You will have to make a NY.gov account for the business and then click the link to apply and it will walk you through the steps easily.

Step 6: Get Federal Tax ID aka Employer Identification Number (EIN)

Once you receive the notification that your business has been created, you are able to move forward
- That process can take an hour to a couple days depending on your state and how backed up they are.
Before you are able to do anything with the new business, you have to have a Tax ID
Go on to the IRS website and go to the Apply for an Employer Identification Number (EIN) Online page
- https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
- On this page it goes through the three steps to acquire an EIN
- Once you have read through them- Click the Apply Online Now button- it will walk you through all the information needed.
You receive one based off of your SS number. Therefore, if you mess anything up, you can only apply for one once a day.

Step 7: (For an LLC) File Certificate of Publication

Within 120 days of creating your business you need to complete the requirements to file the certificate of publication
- The basic overview can be found here https://dos.ny.gov/certificate-publication-domestic-limited-liability-company-0
To print and mail it in the form is https://dos.ny.gov/system/files/documents/2019/01/1708-f.pdf
- Address to mail it is:

New York Department of State

Division of Corporations

One Commerce Plaza

99 Washington Ave

Albany, NY 12231

You need to publish a notice of the LLC’s formation in 2 newspapers (these have to be from the county of where the business is located)

A newspaper that is published daily
A newspaper that is published weekly

These must be published for 6 consecutive weeks.
When it is completed, you will receive an affidavit from the newspapers publisher. These need to be filed a long with the form to receive the certificated of publication
These publications need to include
- LLC full name
- Date it was formed
- Physical street address for the business location
- A statement of the registered agent (this is normally the New York Secretary of State)
- Purpose of the business.
This publication can cost anywhere from $300 to $1600 depending on where you are.

Step 8: Become a NYS Sales Tax Vendor

If you are selling a product, you need to be registered as a sales tax vendor for NYS
- https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/how_to_register_for_nys_sales_tax.htm
You need to apply for your certificate of authority. This website gives you the link to the application and tells you what you need
- https://www.businessexpress.ny.gov/app/answers/cms/a_id/2058/
https://www.tax.ny.gov/

Step 9: Open a bank account and Credit Card

Once you are all set up, it is important to open a bank account under your business name to keep your finances separate from personal finances.
If you are a sales tax vendor, it is important to open two different checking accounts.
- The first account is for your profit
- The second account is for the sales tax you collected.
If it is not separated, you run the risk of getting in trouble with the department of taxation and finances because you have to prove that you didn’t spend any of the sales tax money you collected because it isn’t yours.

Additional Resources:

This is a form in NYS that you can fill out and will provide you with a new business checklist specific to your business of everything you need to accomplish.

https://www.businessexpress.ny.gov/app/bw/startnewbusiness