How To Start A Business In Texas

Launching a new business can be a very exciting time, but if you want to make sure it grows as efficiently as possible, you should get familiar with the legal and professional aspects of the process. Below is a simple step-by-step guide on how to start a business in Texas.

Step 1: Find a Good Business Idea

The very first step of launching a business in Texas -or anywhere else for that matter- is finding a good business idea. You need to do some research to determine what sort of business is best to establish in the area.
Also, you should look into ideas that match your personal goals, interests, and natural abilities. This way, you’ll have a better chance of staying motivated when things aren’t going as smoothly as you’d hoped and will even boost your likelihood of success.
To help you get started, here are a few ideas that can work in Texas:
  • Clothing store
  • Gas station
  • Dog breeding base
  • Drive-in movie theater
  • Grocery store

Step 2: Formulate Your Business Plan

Unless you get a stroke of luck, the success of any business depends on carefully building a plan. You should do this before you have a large sum of money and other valuable resources invested in a business in Texas.
Formulate your plan through crunching numbers and critically analyzing market data revolving around your idea. The following are the basic components of a comprehensive business plan:

1. Coming up with a name

The first thing you should get out of the way is coming up with a name for your business. As small as this task sounds, it can get quite tricky.
When picking a name for your business, it has to be relevant to the business, catchy to resonate with the public, and above all, available while following the naming rules of Texas.
Also, remember to check that your domain name is available before reserving the business name.

2. Finding a location

Next, you should find a location for your business depending on its type. Not only do different locations vary in the sorts of permits and licenses you’ll need to launch the business, but they can also affect the growth potential of your business.
Consider how easy it is to assess your establishment for both customers and workers. Additionally, make sure your research includes popular areas in Texas such as Houston or Austin or to get more foot traffic and spark public interest.

3. Doing market research

Conducting market research is the only way you can get to know the market in your niche. This is a crucial step to complete before writing a business plan.
Doing market research involves conducting focus groups, surveys, and SEO (search engine optimization) research. The goal here is to achieve a clearer understanding of your target audience and competitors to come up with the most effective business plan possible.

4. Writing a professional plan

Your business plan is a dynamic road map for executing your idea in the most efficient and profitable way possible. This professional should include an outline of the chief purpose, a value proposition, a structure vision, funding resources, as well as competitive edges.
In addition to helping your startup stay organized, a well-made business plan can help you attract investors and keep track of significant milestones.
If you’ve never written a business plan before, take a look at these templates from the U.S. SBA (Small Business Administration).

Step 3: Fund Your Business

Starting a business in Texas isn’t cheap, so you need to find ways to finance your new establishment. Some funding ways include:
  • Investing your own savings.
  • Raising money from family and friends.
  • Applying for a loan (a micro or bank loan).
  • Landing a federal loan through the SBA.
  • Seeking credit via personal financing.
  • Crowdfunding.
  • Securing capital investors.
The SBA has a handy guide on its website on how you can fund your business. CDFIs (Community Development Financial Institutions) offer microloans, and you can find the nearest branch to your location using their online tool.

Step 4: Determine your Proper Business Structure and Register it

You need to figure out the right structure for the new business. Generally speaking, if you’re operating a sole proprietorship or a partnership, you must head to the clerk’s office in the local county to file and register your business name.
On the other hand, if you’re going to incorporate, you should visit the SOS (Secretary of State’s Office) website to find information on the appropriate legal structure for the business. The website also allows you to register new legal entities.

Step 5: Know Your Tax Responsibilities

Any type of business has tax responsibilities to uphold, so you should check yours with the local, state, and federal tax authorities.
  • To file state tax obligations, you should go to the Texas CPA (Comptroller of Public Accounts).
  • To file federal tax obligations, you should go to the IRS (Internal Revenue Service).
If you’re launching an online business, there’s an online marketplace seller guide on taxes that can be very helpful.

Step 6: License Your Business

In Texas, there’s no requirement for a general business license. You do, however, need to have certain permits, licenses, registrations, authorizations, or certifications, registrations for your specific business type at the local, state, and federal levels.
You can find a lot more detailed information on the matter by referring to the Business Permits Office Handbook. Additionally, you can get helpful information regarding state licenses and permits required through Tourism’s BPO (Business Permit Office) and Texas Economic Development.

Step 7: Get Familiar with Employer Requirements

If your business requires you to employ staff, you should know your state and federal employer requirements.
This is to make sure you’re compliant with the legal conditions of hiring employees. For example, registering for employee taxes with the IRS and reporting new employees to the state.
You can find out more information about Texas employer laws via the businesses and employers page on the Texas Workforce Commission website.


There you have it, a simple guide on how to start a business in Texas. Keep in mind that this process won’t happen overnight. So, be ready to not just invest money, but also time and effort into building your new business.