Start a Business in Texas
Texas offers the best business ecosystem in the nation and has frequently been named the best state to start a business. Our leading business climate and favorable regulatory environment provide the groundwork small businesses and entrepreneurs need to succeed.
We divided the process of starting a business into seven basic steps. It is advisable 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.
Follow these steps to help you get started in the state of Texas:
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.
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.
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 micro loan, 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. Micro loans 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.
Step 4 - Business Structure and 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.
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.
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 level. For more information, please refer to our Business Permits Office Handbook. Texas Economic Development and Tourism’s Business Permit Office (BPO) provides comprehensive information on state permits and licenses required for business enterprises in the state.
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.
Other Resource Organizations
- Small Business Development Centers (SBDCs) are a partnership between the SBA and universities. They provide free advice on marketing, financing and business growth to local businesses, start-ups and entrepreneurs. Find your nearest SBDC in Texas using the online directory.
- SCORE is a national network of experienced executives who volunteer as mentors. They help start-up and established entrepreneurs to grow their businesses. SCORE also provides workshops and courses in business education. Find your nearest SCORE chapter using the online SCORE locator.
- Libraries are a great resource for researching a new business or a new market. Libraries subscribe to costly business information databases, which members can use at no cost. Find your nearest library using the online library locator.
- Larger cities in Texas have resources for small businesses as well. Check with the economic development department nearest you to see how they can help you.