The state of New York offers many options when it comes to launching a small business. You can choose to set up shop in the Big Apple and take advantage of one of the world’s busiest and most diverse locations. However, New York City isn’t the only location for entrepreneurs; the state is a mix of big city, suburb, and even rural areas. No matter which type of atmosphere suits you and your business best, you’ll find it in New York.
Is New York Small-Business Friendly?
Small businesses have been called “the backbone of the American economy.” In fact, according to the 2010 U.S. Census, 99.7 percent of all companies registered in the U.S. are small businesses. New York State’s statistics are roughly the same — an impressive number, which indicates that New York is a great place to launch a small business.
It’s important to understand what a small business is, however. The generally accepted definition is a business that has fewer than 500 employees. This varies widely by industry, ranging from 100 employees up to 1,500 employees. Over 80 percent of businesses registered in the state of New York have zero paid employees, and most of those are structured as sole proprietorships. Regardless, small businesses do add a great deal to the state’s economy; currently over half of all employees in the state of New York work for small businesses.
Cost of Living
There’s no surprise that New York City has one of the nation’s highest costs of living. This translates to higher food costs, utilities, transportation, and housing. It also means that the cost of doing business is higher than other parts of the country. You’ll need to spend more on either renting or purchasing a facility for your small business in New York, and employees may expect higher salaries so that they, too, can afford to live there.
However, if you aren’t planning to locate your business in one of the New York Boroughs, and plan to settle in other parts of the state, you’ll find the cost of living much lower. For example, Oswego County’s cost of living has been estimated to be 35 percent lower than the cost of living in New York City. Chautauqua ranks as the city with the lowest cost of living in the state, estimated at nearly half of the Big Apple’s cost.
As you can see, New York state provides a huge variety in terms of the economic environment. With a lower cost of living, however, comes other issues, such as a smaller customer base or increased transportation costs. Many entrepreneurs that choose to set up shop in New York City say that if they can deal with the increased expenses, the investment pays off.
One of the biggest factors in New York’s friendliness to startups is its tax policy. In an effort to encourage new businesses to locate in New York, the state offers several tax incentives. Startup New York is a program that allows selected applicants to skip paying taxes for up to 10 years. Other incentives vary by industry and location, such as a reduction in commercial rent tax for businesses in lower Manhattan and a tax credit for production of films and TV episodes.
Unfortunately, New York also has a reputation for a complicated system of taxation for both individuals and businesses. For example, corporations must pay a state franchise tax, but the state provides four different ways of calculating this tax. Corporations must calculate it each way, and pay the highest of the four. S corporations also pay franchise tax, although the state only requires them to calculate it on gross receipts.
The good news is that recently the state administration has been working diligently on tax reform, both by reducing tax rates and by simplifying the methods for calculating them. Regional economic development councils have been formed to assist with this process.
Big Cities, Big Opportunities
If you’re looking for a prime market for your small business, chances are New York will satisfy. In 2014, there were around 8.5 million New York residents. Buffalo, Rochester, and Syracuse are also booming cities. The state has seen strong business growth thanks to a recovering economy and affordable lending options.
Those who wish to base their business in other parts of the state, or expand outward, also have a great opportunity. There are over 20 million New York residents in total, many of whom commute to New York City each workday. Relocating to the suburbs has always been an attractive option for city workers, and this has only been increasing over recent decades.
Quality Educational Resources
The entire region in and around New York state offers many top-notch universities and colleges. Among them is the State University of New York (SUNY). This university offers classes in many different locations throughout the state, giving most New York residents access to an affordable education.
Employers benefit from the educational system in many respects. The university produces a talented workforce to draw from, job-ready candidates in a variety of fields. It also provides important research in STEM fields that lead to innovations in the tech and health industries.
No matter what your industry your New York small business is in, the state offers support programs that may give you the assistance you need to thrive. Some of these include:
- Business Mentor NY, which is a web-based mentoring program that encourages volunteers to use their experience and education to guide new entrepreneurs.
- Entrepreneurial Assistance Program, establishing Entrepreneurial Assistance Centers in many communities offering training and technical support to new businesses.
- Empire State Economic Development Fund, which offers financial assistance to companies that further the state’s economic goals for job creation.
- Minority and Women-Owned Business Investment Fund, centered on businesses in emerging technologies, promoting economic innovation.
- Centers for Advanced Technology, encouraging collaboration between universities and privately owned businesses for research, technology, and development.
New York State provides many opportunities for small business development in nearly every industry. It continues to see steady economic growth, and new programs and reforms are being established to make the state more attractive than ever to budding entrepreneurs.