Starting a Business in Texas
Reading time: 10 Minutes
On the Texas Economic Development and Tourism page, it provides seven steps to starting a business in Texas. Texas has been named the best state to start a business. The business climate provides the groundwork entrepreneurs need to succeed (State of Texas, 2024). The steps to starting a business from the State of Texas website are listed below:
Step 1: Write Your Business Plan
A business plan is a dynamic road map for your business. It should outline the main purpose and value proposition of your business, its structure, financing, and competitive advantages. The U.S. Small Business Administration (SBA) has some great templates for crafting a business plan (State of Texas, 2024).
Step 2: Choose Your Business Location
Choosing a business location will depend on the type of business you operate. Consider looking at area zoning ordinances. Assess how feasible it is to access your supply chain and customers, and if there is an available workforce
(State of Texas, 2024).
Step 3 - Finance Your Business
There are several ways to fund your new enterprise, including using your own savings and raising money from friends and family. You can also apply for a bank or microloan, secure a federal loan (via the SBA), or seek credit through personal financing. Other alternatives include crowd funding, angel or venture capital investors. The SBA offers a useful guide to funding your business. Microloans are available from Community Development Financial Institutions (CDFIs). Find your nearest CDFI using the online CDFI locator. Also, visit our Financing and Capital webpage for more information (State of Texas, 2024).
Step 4: Business Structure & Registration
Determine the appropriate structure for your business. In general, sole proprietorships and partnerships need to register and file the business name (DBA or assumed name) with their local county clerk’s office. If you decide to incorporate, the Secretary of State’s Office (SOS) website has information on choosing the right legal structure for you. You can also register the new legal entity on the SOS site (State of Texas, 2024).
Step 5: Business Tax Responsibilities
Determine the potential tax responsibilities of the new business with federal, state, and local tax authorities. Federal tax obligations are filed through the Internal Revenue Service (IRS). State tax filings are done through the Texas Comptroller of Public Accounts (CPA). If starting an online business, this online Marketplace Seller tax information is useful. For questions about local business and property taxes, consult your county’s appraisal district or tax assessor-collector. Find your local appraisal district and tax office on the CPA’s website (State of Texas, 2024).
Step 6: Business Licenses and Permits by Business Type
A general business license is not required in Texas. However, it is important to determine necessary licenses, permits, certifications, registrations, or authorizations for a specific business activity at the federal, state, and local levels. Our 2024-2025 Texas Business Licenses & Permits Guide offers a comprehensive listing of state permits and licenses required for persons wanting to operate a business enterprise in Texas. For more information or assistance, please contact Texas Economic Development & Tourism’s Business Permit Office (BPO) (State of Texas, 2024).
Step 7: Business Employer Requirements
If planning to employ staff, determine federal and state employer requirements. To learn more about Texas employer resources, visit the Texas Workforce Commission’s businesses and employers webpage (State of Texas, 2024).
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Nadine Muhammad has a Master of Science in Economic Development and Entrepreneurship. She is the owner of an online bookstore, Nation's Products, and NLM Economic Development Services. For a consultation with business plan writing or developing an economic development strategic plan for your community, send an email to nlmeconomicdevelopmentservices@gmail.com
Reference
The State of Texas (2024). Start a Business in Texas. https://gov.texas.gov/business/page/start-a-business
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