Let’s Start Running Your New Business
So you started your business in NY state, now you are up and running you have a great small business and do not know how to manage it? Learn key aspects of running your business effectively in the great state of New York
Some businesses seem to barely keep afloat, fumbling from one day’s challenges to the next. Other businesses seem to crackle with energy, efficiency and vision. Which will your business be?
Successfully Running Your Business Takes Planning and Critical Thinking.
This is no accident – effective businesses rely on organization, oversight and planning to minimize minor disruptions that reduce a company’s ability to grow and prosper. So what do you need to be planning and thinking about for your newbie business?
Running A Business in New York Effectively
To effectively run a business, make an inventory of all the roadblocks potentially impeding your company’s growth. Then build and prepare to eliminate these with careful business management and creative thinking.
Here are 7 areas of your business that you should actively be planning and strategizing.
- Stay Legally Compliant
- Buying Assets and Equipment for Your New Business
- Manage your LLC’s finances
- Make a Marketing Plan for Your NY LLC
- NY Small Business Taxes
- Hire & Manage employees in New York State
- Close or Sell Your Business
1. Stay Legally Compliant NY State
Keeping your own records
You’ll need to meet external and internal business compliance requirements. Most external requirements involve filing paperwork or paying taxes with state or federal governments.
Internal business requirements are for your own record keeping. You should document your compliance with internal requirements closely with company records.
You might need them when you decide to sell your business or if a legal action is taken against your business.
Requirements by business structure
Corporations have the strictest internal requirements. Corporations should hold initial and annual director and shareholder meetings, record their meeting minutes, adopt and maintain bylaws, issue stock to shareholders, and record all stock transfers.
LLCs have less strict internal requirements, but are generally advised to maintain an updated operating agreement, issue membership shares, record all membership interest transfers, and hold annual meetings.
Other business structures have few, if any internal requirements. However, it’s rarely a bad idea to document important decisions with your business.
Ongoing State Filing Requirements
- Annual report or biennial statement. Most states require one or the other. Some states set the due date on the anniversary of the business formation date, and other states pick a specific day for all businesses.
- Statement filing fees. Fees normally accompany the annual report or biennial statement, which can exceed $300.00.
- Franchise tax. Some states charge franchise taxes for corporations or LLCs that operate with their border. Formulas vary by state.
- Initial reports. Some states require initial reports and fees shortly after incorporation.
- Articles of Amendment. If you’ve made important changes to your company — like address, name, new shares, or membership — report it with articles of amendment.
Ongoing Federal Filing Requirements
Most businesses won’t have federal requirements beyond paying federal taxes and complying with the Affordable Care Act. Make sure that you meet all federal tax obligations, including income and employer taxes.
The Affordable Care Act requires businesses with 50 or more employees to report to the IRS that they provide health coverage. If your business has any federal licenses, permits, or certificates, you’ll need to keep those up to date.
Other federal requirements
Some business activities are regulated but don’t require filing. Make sure to stay in compliance with any applicable marketing and advertising laws, copyright laws, workplace poster laws, workplace health and safety laws, and Americans with Disabilities Act (ADA) laws.
Maintain Licenses, Permits, and Recertification
The documents for staying legally compliant vary based on your industry and location. Maintain any licenses, permits, or certificates your business received from your state, city, or county. Renewal requirements vary, so it’s best to check with local business licensing offices.
For example, most restaurants need to regularly renew health and safety certificates. Businesses that sell regulated items like tobacco, alcohol, or tires might need to regularly renew their sales permits.
For professional services like plumbing or nursing, the state might require certification with a third-party board to keep your license.
For federal licenses, permits, and certificates, check with the issuing institution to confirm renewal requirements for your business. Here’s a list of some common federal agencies and departments that small businesses register with:
- U.S. Department of Agriculture (USDA)
- Alcohol and Tobacco Tax and Trade Bureau (TTB)
- Federal Aviation Administration
- Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)
- U.S. Fish and Wildlife Service
- National Oceanic and Atmospheric Administration
- The Federal Communications Commission
2. Buying Assets and Equipment for Your New Business
Equipment is a vital part of any business – you can’t run one without it. How are you going to clean those New York business offices with no equipment?
But how can you provide your business with the equipment it needs? Just ask yourself these three questions!
Question 1: Should we buy or lease your equipment?
Both options have their benefits and drawbacks. Ask yourself the right questions to find the solution that is best for your business situation.
The right balance between owning or leasing equipment is different for any business. What is most important is that you find the balance that is best for you!
Question 2: Do we purchase new or used equipment?
If you decide to buy some or all of your equipment, the next question is whether you should buy new or used. The biggest advantage of buying used equipment is the sometimes massive reduction in price. Depending on what you want to buy, the discount could be as high as 75%!
Are you looking for modern newer equipment? Then buying used is unlikely to be the best solution. You are taking risks with opting for used over new, there are several steps you can take to minimize them:
Question 3: We know what we want, how do you pay for it?
You’ve decided whether you want to buy or lease and made up your mind about using new or second-hand equipment. Now it is time for perhaps the most important question of all – how are you going to pay for it?
You have a couple of options:
Have somebody else pay for it. Depending on your location and type of business, you might qualify for government grants. Discover whether you are eligible for a US grant. These involve paperwork and hoops to jump through, but it’s hard to beat ‘free money’.
Take out a loan. Loans are obviously not new but nowadays there are more options than ever to help your business grow. So make sure to look beyond the traditional bank loans and check out alternatives like OnDeck or Fundera. These companies were built from the ground up with small businesses in mind, so they are more likely to understand your situation and provide you with a deal that works for you. We wish you the very best in your decision.
3. Manage Your New York LLC’s Finances
Separate your personal and business finances
Maintain a firm wall of separation between business and personal financial matters. The liability protection of an LLC erodes when assets commingle between the LLC and its owner.
File State & Federal Paperwork Timely
Be diligent about filing required state paperwork. For example, Annual report filing LLCs must recertify annually, and if they don’t, they become inactive and eventually cease to exist as legally.
Always Keep Credit Separate
Avoid mixing personal and business credit lines. Although some states and courts have moved against this practice, some people establish sole-member LLCs simply to get a new employer identification number so as to establish new lines of credit under the LLC’s name.
Protect the LLC – Insure and License Your New Business in New York
Although an LLC often protects its owner from liability, the company itself can be sued like any other, so obtaining the necessary insurance and keeping current on mandatory federal, state or local licenses and permits will limit the company’s legal and financial exposure.
4. Creating A Marketing Plan For Your LLC
As a business owner, you don’t have too much time on your hands to worry about marketing. With your energy spread across all areas of the company and focusing on product development and business growth, marketing usually falls at the bottom of the to-do list. This is a mistake marketing your new business is IMPORTANT to your success.
So dependable upon your business model, be it physical business with a brick and mortar store or location, or if you are an online business entity you need to start shouting about your business and services.
Take a quick look at some of the ways you can market your business
- Local area print materials and flyers
- Local businesses groups
- Join the Chamber of Commerce in your area
- Build your businesses website
- Run online ads via Google or Bing
You need to figure out where your customers are and make a marketing plan for your new business that targets them directly and consistently.
5. New York LLC Small Business Taxes
As a newly registered LLC in the state of New York you will need to comply with local and state taxation laws. Dependable upon your business situation be it a service or retail business model you are going to need to both collect and pay sales and taxes.
Running a business is hard. A New York State Business Online Services account can make it easier. It’s a free, convenient, and secure way to file returns, schedule payments, respond to department notices, and more!
A Business Online Services account: it’s an investment you can’t afford to pass up.
Find out more here at the New York Department of Taxation https://www.tax.ny.gov/online/bus.htm
6. Hire & Manage Employees in New York State
Most new businesses are going to need peop[le and staff to run that business. As the owner, that means you now have the responsibility of employing people.
In New York State your best reference point to start is the Department of Labor you will find the website here https://dol.ny.gov/businesses You can also check here for more small business info https://dol.ny.gov/recruit-your-workforce
You may also need to hire the services of a payroll clerk or an outside payroll service such as ADT or similar. We recommend you discuss your employment procedure with your financial advisor as every business has different requirements for employees.
7. Closing or Selling Your Business
Selling your LLC business? After careful consideration, you may decide to sell your business. Sound planning can help ensure you cover all your bases.
Use business valuation to set a monetary value before marketing to prospective buyers. You can do a self-evaluation and learn more about the resources for business valuation appraisals from The Appraisal Foundation.
Accurately value all property and real estate tied to your small business. This can include intangible assets like brand presence, intellectual property, customer information, and projection of future revenue.
Common valuation methods.
- Income approach: Looks at projected revenue and accounts for potential risks.
- Market approach: Compares your business to other similar businesses that have recently sold.
- Assets approach: Subtracts total business liabilities from the total value of all assets.
Make a sales agreement
You must prepare a sales agreement to sell your business officially. This document allows for the purchase of assets or stock of a corporation. An attorney should review it to make sure it’s accurate and comprehensive.
List all inventory in the sale along with names of the seller, buyer, and business. Fill in background details. Determine how the business will be run prior to close and the level of access the buyer will have to your information. Note all adjustments, broker fees, and any other aspects relevant to the terms of agreement.
Don’t leave out any assets and liabilities, or this can create problems even after the sale has been finalized.
Many small business owners will face a time when they need to transfer their ownership rights to another person or entity. You’ll have a few different options available for doing so.
Jeena owns a local clothing boutique that hasn’t performed well. With several other businesses on her plate, she can no longer afford to continue running it. She needs a quick exit and quick cash. By selling a business in full, you will transfer ownership immediately and receive payment right away.
Tom owns a market near his home. After the birth of his granddaughter, he now spends most of his time at his daughter’s home several hours away. After transferring business ownership, Tom no longer has to worry about running his business but is still receiving a monthly income.
This option often benefits individuals that can’t afford an outright sale, but instead are able to finance a long-term payment plan. A gradual sale is a flexible option for transferring a business.
Mary has decided to take a year-long cruise around the world. To take care of her day care center she’s decided to transfer ownership to a friend through a lease.
By transferring your business ownership through a lease, you’ll commit to a contract that details the conditions and payments you’ll receive for the temporary rights to the business.
Transferring ownership of a family business may have legal impacts, such as estate and gift tax obligations imposed by the IRS. A transfer of property would also likely require taxation.
It’s also important to understand how to approach the exit strategy based on business type. You may want to consult with a lawyer to see which additional rules could apply.