Start a Business in Texas
In Texas, small businesses continue to thrive due to a variety of factors including our excellent geographic location, highly skilled workforce, low tax burden, reasonable cost of living, predictable regulatory environment and our legacy of having a business friendly climate. While there are simply no guarantees in business or a way to eliminate all the risks associated with starting a business, there is a way to improve your chances of success with good planning preparation and insight.
Some basic steps to starting a business include selecting a location, deciding on a business structure and obtaining the necessary licenses and permits. Additionally, determining which financing options will meet your short-term and long-term goals is crucial.
We’ve broken down the process into the four basic steps below. Please note that new business owners should not hesitate to seek the guidance of a professional tax consultant, accountant and/or attorney to help verify that all legal requirements are met before opening up a business.
Step 1 - Write Your Business Plan
A business plan is an essential road map for business success. This living document will serve to outline the main purpose of your business, its structure, its financing, and advantages over other market competitors. A solid plan should include a description of the business, market analysis, organization and management structure, and applications of funding, to name a few.
Step 2 - Choose Your Business Location
Choosing a business location will depend on the type of business you operate, and is perhaps the most important decision a business owner will make. It requires precise planning and research. Consider looking at demographics, assessing your supply chain, staying on budget, understanding state laws and taxes, and much more.
Step 3 - Finance Your Business
Understanding your financial needs is a significant step towards business success. There are several ways to fund your new enterprise, including a bank loan or micro loan, applying for credit through personal financing, crowd funding, angel/venture capital investors, securing a federal loan (Small Business Administration), and other alternatives such as raising money from family and friends.
Step 4 - Business Structure and Registration
Determine the legal structure of the business and file the business name with the state or county. In general, sole proprietorships and partnerships need to register with the county clerk’s office. If you decide to incorporate, register with the Secretary of State’s Office (SOS).
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 Comptroller of Public Accounts. 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.
Step 6 - Business Licenses and Permits by Business Type
Determine necessary licenses, permits, certifications, registrations, or authorizations for a specific business on the federal, state, and local level. The Economic Development and Tourism’s Business Permit Office (BPO) provides comprehensive information on state permits and licenses required for business enterprises in the state.
The office liaison will be able to assist applicants in the resolution of outstanding issues by state agencies, obtaining timely and efficient permit review, facilitating contacts between applicants and state agencies responsible for processing and reviewing permits, and making recommendations for consolidating and simplifying permit procedures affecting business enterprises.
For more information, please reference our Business Permits Office Comprehensive Permit Handbook, which provides information on permits required for businesses in Texas and individuals looking to establish, operate or expand a business in Texas.
Contact Business Permits Office or reference our Business Permits Office Comprehensive Permit Handbook
Step 7 - Business Employer Requirements
Determine federal and state employer requirements. There are various laws relating to the employment of personnel. To learn more about Texas employer resources, visit www.twc.state.tx.us/businesses.