Formally establishing a sole proprietorship with the city was a necessary but exhausting process.
It’s just one of those things that I kept putting off, because I was intimidated by the process. But it became a necessity because my personal transactions were so commingled with my business transactions that I had to “get my house in order”.
I wanted to understand questions like: “How much is our overhead? How will it increase?” and I wanted to truly understand “Exactly how much is the cost for us to deliver our services, and how low could our gross margins be, given what we know about conversion rates and such, without preventing us from growing rapidly”. Unfortunately, because I had been simply tracking everything in an Excel spreadsheet (and not keeping it up-to-date), and because I hadn’t been assigning transactions as “overhead” vs. “marginal costs”, I didn’t have the opportunity to answer these questions. Fortunately, we recently hired a bookkeeper, who will be able to provide data.
One necessary thing to make everyone’s lives easier is to start a separate bank account for all transactions related to the business. I know this sounds like a no-brainer obvious thing, and I’m ashamed it’s taken me so long to get this together. I think if I had a step by step tutorial guide on how to get this done, I would have done sooner, so hereby presents the Code For Cash tutorial:
Tutorial: NYC Guide on How to open a new, separate bank account for your sole proprietorship online business (DBA) in (SaaS, software development, freelancing, agency, etc.) if you are already a USA citizen
Time requirement: 2 hours or more if you are not lucky navigating NYC traffic
Prerequisites: Having a personal bank account in a bank like Citibank, TDBank, etc. USA citizenship.
- Bring two forms of government identification (just in case) before you set out on your quest.
- Go to lower Manhattan. On Park Place St #11 there is a shop inside the building. He will sell you 3 copies of form X-201 for $10.
- Go to the courthouse at 60 Court Street. Go to the basement. There is also a basement entrance to the building but it’s fine to enter through the main way. You will have to go through a metal detector. Reminds me of the airport in a way.
- Go to the basement. You have to ask around to find out what room to go to, since the signage is wrong (fear not if the door to the business licensing room says “closed”; government business is up and running in another room.
- Show them form X-201 and your ID. They will notarize the forms for you. Pay $120 for 2 copies of your business certificate.
- Go to your bank and show them your business certificate and your driver’s license. Expect them to have a bunch of forms for you to sign. This process takes about 30 minutes to an hour and a half, depending on wait time at the bank.
- Expect it to take up to 5 business days for your account to be authorized. This delay is due to AML (anti money laundering) and KYC (know your customer) laws.