New York City offers entrepreneurs access to a market with consumers with high disposable income and where investors and lenders are ready to assist entrepreneurs who wish to start or grow their businesses in the Big Apple. However, that doesn’t mean that starting a business in New York is a simple stroll in Central Park. Numerous legal challenges, business challenges, and realities exist for those intending to do business in New York. The good thing, is New York City is loaded with great talent, a dynamic population and the City has the ability to change direction when the population sees the need for change.
New York is in a time of change and with this change brings great opportunities. We are optimistic on New York business because of the reduction in real estate prices, the economies growth after cessation of lockdowns, the push of the mainstream citizens for change in government and the optimism we see on the streets. We are bullish on New York and believe we shall see a major recovery and new more focused government within the next couple of years. With the reduction in real estate rental prices, this is prime time to consider business in New York.
Below are some of the the most common challenges that entrepreneurs face when starting a business in NYC. Please, also, see: Vital Business Agreements Before Starting a Business in New York.
Choosing the Right Legal Structure in New York
Prior to starting a business in New York consult with an accountant and your attorney in order to assist you in deciding the most suitable business structure. In some cases, establishment of your corporation in Delaware is advisable and having your New York company as a subsidiary of the Delaware. Numerous choices exist and it is essential to have a proactive attorney run through the various options and, also, have your accountant take a look. Most good New York lawyers, have access to good accountants. If you are looking to form a Nonprofit, please see Hayes & Simon’s article on: Nonprofit corporations.
New York’s Complicated Tax Code
New York Tax Code is infamous. The NY Tax Code is complicated, cumbersome and ever changing. If you are operating your business in New York City you shall be required to file, in most cases, three tax returns for your business (NYC, New York State and a Federal return). The good news is that New York has some of the most efficient and qualified accountants in the world. With a little proactivity and a good accountant, New York City is not much more complicated, in regard to taxation, that doing business in others U.S. states.
High Cost of Doing Business in New York
New York City companies are required to pay employees USD 15.00 per hour . This minimum wage is the second-highest minimum wage in the country after Seattle wherein large businesses pay USD 16.39 per hour and small businesses pay USD 15.75 per hour. Additionally, most wages for most employees shall be in excess of wages in other large American cities.
New York City is, also, much more expensive than the national average in terms of transportation, rent, groceries, and healthcare. However, the good news is that these costs are, often, offset by business efficiencies, access to low-cost credit and a population with assets to spend.
New York’s Large Vested Bureaucracy
New York City has a large bureaucracy that, often, has interests that are more than just your own. Navigating the personalities and various departments is a task that to some companies becomes a major obstacle, while for other companies the bureaucracy can become an ally.
Intense Pace of Business in New York
New York is a special place for good and bad. The pace of business in New York for some is a positive and to some is a negative. The reality is New Yorkers walk, talk and work at a pace that makes most other cities feel peaceful. This pace causes many to burnout, while this pace is the reason for the City to have an energy in-of-itself. This energy can fuel success when fostered by the right management.
Competition is Fierce in New York
New York is saturated in, almost, every field. This competition, in many cases, fuels innovation and in other cases leads to burnout and business failures. We find that well-run creative and innovative businesses that focus on efficiency and quality of service have an easier time succeeding in business in New York.
If you want to learn more about the other Legal Challenges in Starting a Business in New York and want to find appropriate solutions to these challenges, you may Schedule a Consultation with our top-rated business lawyers from New York.
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