How to start a business in New York State in 14 steps (2025 guide)

Starting a business in New York comes with the excitement of being in a state that never sleeps—where innovation happens at all hours. Ready to bring your entrepreneurial vision to life in the Empire State? It’s a journey filled with possibilities. Prepare for success as we guide you through everything you need to know about starting a business in New York, from creating a business plan and securing funding to finding insurance options, uncovering tax incentives, and more.

Why start a business in New York in 2025?

New York is a global business and economic hub attracting entrepreneurs and professionals from around the world. There are more than 2.2 million small business ventures in New York, comprising 99.8% of all the state’s businesses. Launching a business in New York can be confusing because there is a lot to take in, but this comprehensive guide will detail everything you need to get started.

Here are the topics we’ll cover in this step-by-step guide: 

• 14 steps to starting a business in New York
• Step 1: Decide what type of industry is best for your business
• Step 2: Conduct industry research
• Step 3: Create a business plan
• Step 4: Choose your business entity: Types of New York business entities
• Step 5: Secure funds: New York small business funding, loans, and grants
• Step 6: Choose your New York business name and New York DBA
• Step 7: Pick a business location in New York
• Step 8: Find a New York registered agent 
• Step 9: Get a New York EIN and file your tax and employer identification documents 
• Step 10: Register as a small business in New York
• Step 11: Register for your business license and permits in New York 
• Step 12: Secure insurance for your New York small business 
• Step 13: Prepare to pay taxes on your business in New York
• Step 14: Set up your business bank account
• Additional resources to get your business started
• Frequently asked questions 

14 steps to starting a business in New York

If you’ve decided to open a business in New York, there are a few items you’ll have to take care of before you get started. Below we break down each step, from refining your idea to setting up a foundation for growth. With small business resources and insights tailored to New York, you’ll be prepped for success.

Step 1: Decide what type of industry is best for your business

The first thing you’ll have to decide is what kind of business you’ll open. You may have a dream business in mind, or you could study the market and look for opportunities. Have a background in finance or accounting? New York has a strong financial sector, with a major hub in New York City. Healthcare and technology are also key industries in the state.

No matter what path you take, make sure your chosen business fills a need and is a good fit for your skill set and interests. Not sure where to start? Begin by exploring a variety of small business ideas to spark inspiration.

Step 2: Conduct industry research

Take a deep dive into your desired industry. Analyze trends, conduct a competitive analysis, and establish the unique services or products you will bring to the market. Try to avoid launching a business in a market that is already saturated. If you have your heart set on opening a pizza restaurant but your town already has seven pizza restaurants, consider finding another city or opening a different kind of restaurant.

Step 3: Create a business plan

Develop a comprehensive business plan to guide your new venture and secure funding from investors or lenders. This essential document outlines your business goals, strategies, and financial projections, serving as a roadmap for success and demonstrating your company's potential to stakeholders.

Here’s a breakdown of what it includes: 

• Executive summary: Lay out the vital information about your company and provide a high-level overview.
• Company description: Include your mission statement, company history, and goals.
• Market research and potential: Outline your ideal potential customer as well as the actual and potential size of your market.
• Competitive analysis: Identify companies that currently occupy the market you’re looking to enter.
• Products and services: Describe the benefits, production process, and life-cycle of your offering and how it’s better than your competitors.
• Marketing and sales: Touch on your target market and customer segments and your strategies for reaching and retaining customers.
• Business financials: Prepare a budget, map out a financial plan, and include relevant financial statements.
• Management and leadership: Highlight the expertise and qualifications of your management team.
• Funding request: Outline how much money your small business needs and what you’ll use the funds for.
• Appendix: Assemble a well-organized appendix for anything and everything readers will need to supplement the information in your plan.

A solid business plan is key to attracting potential investors, defining your goals, and setting your new company up for success. A free business plan template can help you get started. Check out the New York Small Business Development Centers as well. They offer a full suite of no-cost expert services, from business plan development and marketing strategies to financial planning and cost analysis.

Step 4: Choose your business entity: Types of New York business entities

Once you have decided on an industry, you must choose a structure, also known as an entity, for your new business. The type of business entity structure you select will determine how much tax you pay and whether or not your personal assets will be protected if you’re sued. Choose one of these structures for your business: 

Sole Proprietorship

A business owned and operated by one person, with no legal distinction between the owner and the business.  

General Partnership

A business owned by two or more people who share profits, losses, and management responsibilities.

Corporation 

A legal entity separate from its owners, with shareholders who have limited liability for the company's debts and obligations.

Limited Liability Company (LLC)

A hybrid business structure combining the limited liability of a corporation with the tax flexibility of a partnership. Learn more about LLCs.

Step 5: Secure funds: New York small business loans, funding, and grants

Figure out how much money you’ll need and how you will obtain the funds. Costs to start a business in New York will vary depending on the type of business and industry, required permits and licenses, equipment, supplies, rent, and other factors. You will have to pay up to $200 to register your business. To determine the remainder of your startup costs, look at your business complexity, needs, and additional fees involved. 

Fortunately, there are several ways to obtain the money you will need to pursue your goals.

In addition to the above, these New York-specific resources can help you find funding: 

Empire State Development (ESD)

This government agency offers support to entrepreneurs in New York. One ESD program offers small and medium-sized businesses that want to enter export markets grants of up to $25,000.

New York Small Business Development Center (SBDC)

The SBDC offers mentoring and consultation services to business owners in New York at no cost, and the agency also has a microloans and microgrants program.

New York State Grants Management

New York State Grants Management is a website where you can find, apply for, and manage New York State grants.

Step 6: Choose your business name and DBA in New York

Choose a memorable name for your new business. Make sure that it has not already been taken. Visit the New York Secretary of State Business Entity Database to do a search. 

Reserve your business name

If the name you chose is available, you can reserve it for 60 days by visiting the New York Department of State website and completing an Application for Reservation of Name form. The fee for reserving your business name is $20.

Filing a DBA (Doing Business As)

A DBA, which stands for “doing business as,” will allow your new company to operate under a name different from its legal name. Sole proprietors often file DBAs, but any business operating under more than one name needs one. You can file DBA paperwork in your county clerk’s office. Learn more about DBAs and the pros and cons of getting one.

Step 7: Pick a business location in New York

New York is a large and diverse state. From the concrete jungle of New York City to the bucolic mountains and lakes of upstate, New York has a location perfect for any type of business. 

If you choose to set up shop in a densely populated area, affordable space may be hard to find. Businesses in large cities are also subject to strict zoning regulations, and you may have to pay additional taxes. There are also permits and business licenses to consider, no matter where you are. 

Before settling on a location, check county and municipal websites to find out about the rules and regulations you must follow. Depending on your type of business, you may also opt to run it from your home, which could keep costs down.

Here’s an overview of the major business areas in New York State.

New York City

New York is one of the world’s greatest cities, and it’s a great place to do business. Companies in New York City can make a lot of money, but they pay high taxes, insurance premiums, and utility costs. Businesses in the Big Apple pay a city income tax of between 6.5% and 7.25%, in addition to federal and state income tax.

Albany

Albany is New York’s state capital and administrative hub, so it’s a good place to set up a business that offers professional services. If you decide to open a business in the city, its Center for Economic Growth could provide you with a lot of useful technical assistance.

Rochester

Like a lot of Rust Belt cities, Rochester suffered when the focus of the nation’s economy switched from manufacturing to services. Rochester halted this decline by supporting small businesses with loans and grants. 

Buffalo

Strategically located on the Canadian border and within 500 miles of major cities like Toronto and New York, Buffalo is ideal for business expansion. The city offers key incentives like 0% corporate income tax for manufacturers and hydropower from Niagara Falls, reducing operational costs. The city also boasts a skilled workforce supported by 21 colleges and universities.

Step 8: Find a New York registered agent

All businesses in New York are required to have a registered agent. This is an individual or organization that can accept official correspondence like tax forms and legal papers. You can act as your own registered agent if you have a street address in New York and are at least 18 years of age. However, you would always have to be available to accept important correspondence during business hours. That’s why many business owners appoint attorneys or use a registered agent service.

Step 9: Get a New York EIN and file your small business tax and employer identification documents

An Employer Identification Number, or EIN, is a nine-digit number that identifies a business for tax purposes. It’s basically the equivalent of a Social Security number for a business. You can apply for an EIN online, or by mail or phone. You'll need an EIN to file payroll taxes and federal tax returns, open a business bank account, and apply for loans.

Step 10: Register as a small business in New York

Next, you’ll need to register your business. The documents you will have to file are determined by the type of structure you choose for your new commercial venture.

Step 11: Register for your business license and permits in New York

New York is a highly regulated state, so most businesses need a permit or license of some sort. Some permits and licenses are handled at the state level, but most are issued by local authorities.

Do you need a business license in New York?

There is no yes or no answer to this question, but you probably will. There are hundreds of types of business licenses and permits in New York, so finding out what you have to do to comply with state and local regulations can be a challenge. 

If you’re starting a business and have questions about your industry and whether you have the right permits and licenses from the state and city or borough, use the online NYS Business Wizard. Just type in the requested information, and the tool will let you know which licenses and permits you will need.

Step 12: Secure insurance for your New York small business

Life is unpredictable, which is why insurance companies exist. If you run a business in New York, you will need to take out insurance to protect yourself against natural disasters, lawsuits, and accidents.

Types of small business insurance in New York 

A general liability policy will cover your business in most situations, but obtaining one will not be enough to satisfy the law. Let’s take a look at some other common forms of insurance.

Step 13: Prepare to pay taxes on your business in New York 

New York's business tax system is complex and multi-layered, involving both state and local taxes. Be sure you understand your tax obligations and consult with tax professionals to ensure compliance with all applicable federal, state, and local tax laws. 

Register as a NYS sales tax vendor

If you sell taxable goods or provide taxable services in New York, you will be expected to collect and pay sales taxes. New York has a state sales tax, and several cities and counties have additional sales taxes. To collect and pay sales taxes in New York, you will have to obtain a Certificate of Authority from the New York State Department of Taxation and Finance.

State corporate income tax

The corporate tax rate in New York is 7.5% for most businesses. 

Franchise tax

In New York State, the franchise tax is a tax imposed on corporations for the privilege of doing business, owning property, or maintaining an office in the state. This tax applies to both domestic and foreign corporations operating within New York. The amount of franchise tax depends on the type and size of the corporation. Sole proprietors do not pay franchise taxes. 

Payroll taxes

Payroll taxes are collected to fund the Social Security and Medicare programs. Employers and employees each pay half of the 15.3% required. You can use payroll software to keep track of your obligations.

Other unique New York tax situations

New York City imposes additional taxes on businesses operating within its jurisdiction, including the General Corporation Tax and the Unincorporated Business Tax (UBT). The Metropolitan Commuter Transportation Mobility Tax (MCTMT) applies to businesses in the metropolitan New York City area.

Federal taxes

In addition to state and local taxes, all businesses must pay applicable federal taxes, including:

• Federal income tax
• Self-employment tax (for sole proprietors and partners)
• Employment taxes (if you have employees), including the Federal Unemployment Tax Act (FUTA tax)
• Excise taxes (for certain industries)

To ensure you understand your federal tax obligations, check out these IRS resources: Publication 334, Tax Guide for Small Business and Publication 583, Taxpayers Starting a Business and Keeping Records.

Tax credits and incentives for New York employers

New York State offers generous tax credits to encourage business in the state. The Department of Taxation and Finance website provides details about some of the programs available for startups, employers, and manufacturing companies. Below are some NYS-specific tax credit programs:

• Excelsior Jobs Program: This program provides refundable tax credits to companies in strategic industries that create jobs and make capital investments. Credits are available for job creation, investment, and research and development.
• Hire-a-Vet Credit: Employers can earn up to $15,000 for hiring a qualified veteran, or up to $20,000 for hiring a disabled veteran, when employing them for at least 35 hours per week for one full year.
• START-UP NY Program: This initiative supports new and expanding businesses with tax incentives and academic partnerships. It allows businesses to operate tax-free for 10 years on or near eligible university campuses in New York State, providing access to research labs, development resources, and industry experts.

There are also federal tax credits available, including:

• Work Opportunity Tax Credit: The Work Opportunity Tax Credit (WOTC) is a federal tax incentive that offers businesses credits of up to $2,400 per eligible employee hired from specific target groups. The credit can be higher for certain categories, particularly some veterans.
• Disability Access Credit: This federal tax credit is based on expenses to allow disabled individuals to access a business. Businesses with no more than 30 employees or income not greater than $1 million can claim it for eligible expenses. The Disability Access Credit can be used for various expenses, including removing barriers, providing interpreters, and modifying equipment for individuals with disabilities.
• Barrier Removal Tax Deduction. Businesses can claim a tax deduction of up to $15,000 per year for expenses related to removing architectural and transportation barriers for people with disabilities and the elderly. This deduction can be used in conjunction with the Disabled Tax Credit, and it's claimed as a separate expense on the business's income tax return.

For a list of other federal tax credits and deductions for businesses, visit the IRS website.

Step 14: Set up your business bank account

Open a dedicated business bank account. Keeping your business and personal funds separate simplifies accounting, protects your personal assets, and facilitates tax preparation.

1. Choose a bank or credit union that offers products and services you need, such as a checking account, loan offerings, merchant services, and high-yield savings accounts. 
2. Establish business credit using a bank credit card for business-related purchases and expenses. 
3. Set up your financial records by selecting the right accounting software for your organization. 
4. Hire a professional accountant well-versed in local tax codes and your industry to help with financial and other bookkeeping services.

Additional resources to get your business started  

There are several state and federal resources that can support your business with guidance, training, potential funding and more. 

State resources

Empire State Development (ESD): New York's main economic development agency, ESD offers programs like the Excelsior Jobs Program for tax credits to businesses creating jobs, and the START-UP NY Program, which provides tax-free zones near colleges for 10 years. Regional Economic Development Councils (REDCs) also recommend grants and incentives to support business expansion.

New York State Department of Labor: The NYS DOL provides vital resources to business owners, including guidance on employment laws, wage standards, and workplace safety. It offers services like hiring support, workforce development, and tax credit programs to help businesses thrive.

New York State Department of Taxation and Finance: This department helps business owners by administering tax laws, ensuring compliance, and offering assistance with tax filings and payments. It provides resources to understand tax obligations, including sales tax, corporate taxes, and withholding requirements. It also offers guidance on tax credits and incentives that can benefit businesses financially.

Small Business Development Centers (SBDC): Provides free business counseling, research, and training for business plan development, marketing, and financial management to help small businesses succeed.

New York Business Express: A centralized online portal offering step-by-step guides, licensing information, and access to state agency services for starting and running a business in New York.

Federal resources 

Small Business Administration (SBA): The SBA supports small businesses through various loan programs, including the 7(a) loan, provides resources for government contracting, and offers counseling and training programs to help entrepreneurs start and grow their businesses.

Grants.gov: This centralized platform simplifies the process of searching for and applying for federal grants across various sectors. It also provides grant writing tips and has a Grants Learning Center featuring the basics of grants, eligibility, and more. 

Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR): SBIR and STTR programs provide research and development funding to innovative tech companies. 

SCORE: SCORE is a national nonprofit organization that partners with the U.S. Small Business Administration (SBA) to provide free mentoring and educational resources to entrepreneurs and small business owners. While not a direct federal agency, SCORE is an independent organization with a network of volunteer business mentors across the United States.   

U.S. Department of Agriculture (USDA): The USDA website lists grants, loans, and other programs and resources for farmers and other businesses serving rural America.

Frequently asked questions

How long does it take to start a small business in New York?

This depends on the business structure you choose. Setting up a sole proprietorship involves little more than visiting a county clerk’s office. Establishing a corporation takes about eight business days.

Can I run a business from my home in New York State?

New York allows home-based businesses as long as they do not violate zoning regulations. You won’t be able to turn your house into a factory, but you will be able to work from home. Ensure you adhere to local laws and meet all licensing and permit requirements.

What are some good types of businesses to start in New York?

New York's diverse economy offers a wide range of opportunities for entrepreneurs across the state, but it's important to choose a business that aligns with your skills, interests, and the local market demand. Some promising sectors in New York include food-related businesses, delivery services, tech startups, fitness and wellness, and creative services. However, be mindful of the high competition and potential operational costs in the state, and ensure your business offers a unique value proposition and complies with all local regulations.

Disclaimer: 

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