If you’re starting a business in Texas, there are a few things you need to know. In this article, we’ll cover some of the basics, including choosing a business structure, getting business licenses and permits, and establishing your accounting system. We’ll also discuss how to protect your business idea and create a marketing plan. Read on for more information.
Starting a Business in Texas
Before starting any new business, you should first conduct thorough market research and write a business plan. This plan will help you expand your business idea into an actionable strategy to determine if your idea is feasible. This will include determining an appropriate location, ample supply from a reliable vendor, a steady flow of customers, staffing availability, and financial projections to determine if your business can be a success. This way, there won’t be any unnecessary surprises and you will be more likely to succeed if you have a clear path set out for yourself.
Business owners should also familiarize themselves with state laws and local ordinances that impact their new venture. These include sales tax, unemployment tax, and federal taxes, employment laws, and other processes required to start a business in Texas. Knowing the rules before starting a new business in Texas can help prevent delays or penalties later on.
Depending on the legal structure of your business, you may need to file with your local county clerk’s office to register and file your business’s name if you are a sole proprietor, partnership, or LLC.
However, if you plan on incorporating, you must register your business with the Secretary of State’s Office which can be completed online.
The State of Texas does not require businesses to apply for a business license. However, there may be other permits, licenses, and/or certifications required depending on what type of business you plan to operate.
Once you’ve determined your business feasible, registered with the state, and are familiar with the applicable laws, it’s time to start building your business. Here are some tips to help you get started:
Choose a Business Structure
There are several business structures to choose from in Texas, each with its own set of advantages and disadvantages. The most common types of businesses in Texas are:
- Sole Proprietorship
- Limited Liability Company (LLCs)
When choosing a business structure, it’s important to consider what type of liability protection you need. For example, if you’re starting a small business, you may not need as much protection as someone starting a larger company. You should also factor in your tax situation and how much paperwork you’re willing to deal with.
While you can always switch your business structure in the future, it’s best to choose one that best fits your company’s needs right now. In Texas, if you are a sole proprietorship, partnership, or LLC, you only need to register with the local county clerk’s office based on your business’s location. If you are incorporating, you can apply through the Secretary of State’s Office.
Choose a Business Location
Ideally, you’ll want to choose a location where the business will thrive. It’s easier to make sales if your business is near places with high levels of foot traffic or near other businesses.
You should also think about how accessible your new business will be for customers and employees. Ideally, you want to choose a location that is accessible by foot and has nearby parking, but this can depend on your type of business.
Licenses and Permits
In Texas, most businesses will need to obtain some type of license or permit from the state and/or county. The types of licenses and permits your business needs will depend on several factors, including:
- where you’re located
- the products or services your company offers
- how many employees you have
You can find information on obtaining certain permits online through each of the following Texas agencies:
- Sales Tax Permit from the Texas Comptroller of Public Accounts
- Business Registration & License – Texas Secretary of State
Depending on the type of business, you may also need an Occupational License from the Texas Department of Licensing and Regulation.
You may also need local permits depending on where your business is located.
If you plan on operating an online business, the tax information provided for Marketplace Sellers will be helpful.
You will also need the following federal documentation for your business:
- Federal Employer Identification Number (FEIN) – IRS
Once you’ve been issued a business license or permit, it’s important to keep it up to date, so keep track of any required renewal dates.
Open a Business Bank Account
A business banking account is a must for any new business in Texas. It helps you keep your personal and business expenses organized and makes it easier to track expenses and income. There are several banks in Texas that offer business accounts, so be sure to do the research and find the one that’s best suited for your needs.
Learn About Intellectual Property Ownership
Although most people don’t realize it, businesses own trademarks, copyrights, trade dress rights, and patents. To protect yourself from competitors stealing your original business idea, consider filing a patent or trademark application.
Protect Your Business Idea
One of the best ways to protect your business is by getting a non-disclosure agreement (NDA). This prevents anyone else from stealing your idea by legally requiring them to keep it confidential. It’s also a good way to have all potential investors sign an agreement that they won’t share any information about your company without written consent. In addition, you should file for copyright as soon as possible. By doing this, you’ll be able to prove you created the artwork or article first in case someone copies it later on.
Get Business Insurance
One of the best ways to protect your business is to get business liability insurance. Liability insurance can help cover costs related to lawsuits, including legal fees and court costs as well as providing personal liability protection for the business owner.
Professional liability insurance may also cover injuries that happen on your property or that are caused by products you offer. For example, if one of your clients gets hurt while trying on clothing in your dressing room, they could sue the store for personal injury.
Establish Your Accounting and Tax Filing System
The best way to keep track of your business finances is by setting up a system that works for you. This may include using software like QuickBooks or hiring an accountant to help you stay organized and pay the appropriate state and federal taxes. Whatever system you choose, be sure to track all income and expenses so you can make sound financial decisions for your company.
Create a Marketing Plan
One of the most important aspects of any business is creating a marketing plan. Without one, it’s difficult to reach your target audience and generate new leads. Your marketing plan should outline your goals, strategies, and budget for business promotions.
Consider what type of advertising you want to do (business website, online ads, print, etc.), how often you’ll send out communications, and who your target market is. Having a solid marketing plan in place will help you make the most of your marketing dollars and grow your business.
In order to make more money sooner than later, consider marketing your products or services online. By doing so, you’ll reach thousands of people at once who are interested in what you have to offer.
There are many different ways to market your business, so find the ones that work best for you and stick with them. Don’t be afraid to experiment until you find a marketing strategy that brings in new customers on a regular basis.
Obtain Funding For Your New Texas Business
Unless you have a lot of money saved up, you’ll likely need to obtain some type of funding in order to start your business. There are a variety of business funding options available, including small business loans, small business grants, and crowdfunding.
There are a few things you should do before applying for funding:
- Know what your business is worth. You can get this information by hiring a business valuation specialist or using an online tool like the
- Have a solid business plan and financial projections. Funding providers will want to see how you plan on using their money and how you expect your business to grow.
- Research different funding options and find one that best suits your needs. Don’t be afraid to ask for help from friends or family members who may have experience with funding.
If you’re not sure where to start, the Small Business Administration (SBA) can be a great resource. They offer a variety of resources and programs for small businesses, including loans and grants.
Recruit and Hire Employees
Understand the employment laws and regulations required for running a business in Texas from the Texas Workforce Commission.
When it comes time to expand your business and hire new employees, remember that you’re in a fortunate position. You have the opportunity to bring new people on board who can help contribute to your company’s success. By setting some clear guidelines and expectations, you can make the process smoother for both you and your new employees.
Be sure to create a job description for each position and post it online or in local newspapers. You should also have a list of qualifications that potential employees must meet. When interviewing candidates, be sure to ask questions that will help you determine if they are a good fit for your company.
It’s also important to have an employee handbook that outlines the company’s policies and procedures. This will help new employees get up to speed quickly and understand how your company operates.
As your business grows, you may find yourself in need of more employees. If so, consider hiring recent college graduates or individuals who are transitioning to the workforce. They may be looking for a lower-paying job while they search for other opportunities, which will allow you to offer them less money than someone with more experience.
As a new business owner, it’s important to stay organized from day one. This includes creating a filing system for all of your important documents, setting up a schedule for yourself, and tracking your expenses and income.
The better organized you are, the easier it will be to keep track of your business’ progress. Not to mention, it will make tax time much less stressful come April.
Open for Business
Now that you’ve learned the basics of starting a successful business in Texas, it’s time to take the plunge and open your doors for business. Be sure to keep these tips in mind as you get started and you’ll be on your way to success.
For more information on starting a business in Texas, visit the Texas Secretary of State website.
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