New York State has several regulatory compliances and higher taxes than most states. However, the populous state has a competitive labor market and a solid GDP (ranking it third in the nation), meaning a thriving small business scene with 2.3 million businesses and 4.1 million employees. On average, the state continues to regain the private sector jobs lost in the previous two years, with small businesses employing 49.1% of the population.
Interesting New York Business Statistics
New York City might have a high concentration of financial services, but it does not lead in state employment terms. Here are 6 fascinating business statistics from New York:
1. Top Industries in New York
Most of the small businesses in New York provide professional, scientific, and technical services. Real estate services take second place, followed by logistics, health care, social services, and construction firms. The state also has a large manufacturing sector and a robust retail trade that includes businesses.
Interestingly, the state’s small patenting firms create more patents, 13 per employee, than large patenting firms.
2. Ease of Starting a New York LLC
Thanks to its strong consumer base, many people put aside the challenges of New York’s taxation and regulatory compliances when deciding to become entrepreneurs.
Like most other states, the steps to forming an LLC in New York remain straightforward; the only added requirement is its LLC publication requirements.
Therefore, you need to file your LLC New York Article of Organization with the New York State Department after deciding on a business name and a registered agent. While filing Form DOS 1336-f, you also need to run a check to verify no other LLC uses the same name. Finally, decide if you want a “doing business as” name and pay the filing fee of $200.
Within 120 days of formation, you must follow your LLC’s publishing requirements with a notice of formation appearing in a weekly and daily newspaper in the county of your LLC’s principal office for six consecutive weeks.
3. Confusing Business Tax Code
New York’s state has relatively high taxes with quite a confusing way of calculating these. For example, a 6.5% business tax and the S Corporation minimum franchise tax of $4,500. In addition, some qualified manufacturers and technology companies pay anything from 0% to 4,875% tax to encourage them to locate in the state.
Small business owners also pay state income tax from 4% to 8.82%, depending on the applicable tax rates.
4. Established Consumer Market and Infrastructure
People within the state benefit from the proximity to the business hub of New York City, with its large population and strong business and cultural influence within the state. Besides the local market, small businesses in the state also play a major role in its exports. Data from the SBA Office of Advocacy shows that 93.3% of New York’s exporters are small businesses.
Being on the Eastern Seaboard, New York has vast markets of nearby states within easy reach. In addition, its infrastructure includes land, sea, and air access, ensuring that raw materials and finished products can quickly enter and leave the state.
5. High Cost of Living
New York has a higher cost of living than most states, meaning a higher cost of business because of rentals and employer costs. The result is that small businesses make do with fewer employees, with 98% of companies employing fewer than 100 employees.
About 36% of the state’s small businesses are younger than five years old, meaning the state has a high closure rate. The result is that 13% of the state’s small businesses are considered high-risk by credit facilities.
However, the state government has created programs providing state and growth support to help smaller businesses overcome some challenges.
6. High Concentration of Talent
Besides being the home of some of the most credible US academic institutions, New York City also attracts diverse talent from the rest of the country and abroad. What this means for the state is that their businesses have access to a highly-skilled workforce.
Bottom Line
The amount of small businesses in New York State continues to increase thanks to its being a center where entrepreneurs gather from across the globe. Despite the taxation and regulation challenges, forming a New York LLC gives a business owner a presence in this bustling state with many exciting opportunities.
