STARTING A BUSINESS IN TEXAS: Checklist, Costs, and Requirements

STARTING A BUSINESS IN TEXAS
Image credit: Business Insider

The population and the number of small companies that serve it are both more than average in Texas. Around 99.8 percent of all firms in Texas are considered to be small enterprises, and these businesses directly or indirectly employ nearly 5 million Texans. Texas, thanks to cities like Houston and Dallas and emerging tech hubs like Austin, is among the nation’s top places to launch a new company. In this post, we’ll go over the checklist or requirements you should consider, before starting a business in Texas with no money, we also touched on where you can get grants.

Starting a Business in Texas Checklist

The following are the step-by-step requirements or checklists for starting a business in Texas.

#1. Choose a Business Idea for Starting a Business in Texas

The first item on the checklist or requirements for starting a small business in Texas is to create your business idea, whether it is fully formed or only a fantasy in your imagination. The type of business you want to run, the products you want to offer, and the customers you want to attract can all be determined by giving your ideas and your own character a thorough examination.

#2. Name Your Texas Business

Another step in the starting a business in Texas checklist or requirements is to launch a company. You must first settle on a name. To begin registering your business with various authorities, you will first need to provide them with the name of your company. Shopify’s Business Name Generator is a simple tool for coming up with a brand name. After narrowing down your options, check to see if any other firms are using the names you’re considering, and then check with the U.S. Patent and Trademark Office to see if your top choice has already been trademarked. Last but not least, check the Shopify Domain Name Generator to see if a matching domain name is available.

#3. Create a Business Plan

It’s possible that a formal business plan isn’t necessary for Lone Star State. However, most bank loan officers will want one before lending money to your firm, and having one is the best way to stay focused, organized, and on track. You need a business plan if you want to:

  • A Summary of the Company
  • An in-depth study of the market
  • Administration and planning
  • Things Offered
  • The Art of Breaking Down the Market Into Niche Markets
  • A Strategist’s Approach to Advertising
  • Design for Supply Chain Management and Field Operations
  • Business strategy

Writing a business plan is an activity that requires study and explanation but is okay and effective. Shopify provides you with sample business plans to help you become organized. Look over some sample business plans to get a better idea of what is feasible.

#4. Choose a Business Structure and Get Started

Choosing a business structure that fits with your idea, way of life, and business plan is one of the important requirements or checklists when researching starting a business in Texas. There are a few basic business formations in Texas: the sole proprietorship, the limited liability company (LLC), and the corporation.

#5. Obtain a Business License and Permits

Regardless of the legal form your company takes, you will likely need to secure various licenses and permits from various authorities before opening for business. While a statewide business license is not mandatory in the Lone Star State, we may need specific licenses and permits depending on your industry and area. As just one example, the Texas Alcoholic Beverage Commission requires all establishments serving alcoholic beverages to have a valid license.

The Texas Business Licenses & Permits Handbook contains comprehensive details on the types of businesses that must obtain licenses and permits in Lone Star State. To apply for a license or permit in Texas, visit the Governor’s Small Business Resource Portal. This office is part of Texas’s economic development.

#6. Examine Insurance Options in Texas

The legal shields of an LLC or corporation are no substitute for comprehensive company insurance. Information about various insurance policies is available from the Texas Department of Insurance.

  • Indemnity obligations
  • The risk associated with work
  • Compensation for employees

#7. Understand Financial Considerations

Separating some of your personal and corporate financial interests is a wise idea regardless of how you want to launch your Texas firm. You should get a business credit card, open a company bank account, and possibly hire a business accountant to assist you in keeping your financial records in order and your eye on the prize as you move forward.

To fully implement your startup plans, you may require additional funding. A bank loan could be an alternative for financing a business. Shopify Capital is another option that could facilitate speedy funding.

#8. Market Your Business

As part of the actions associated with starting a new firm, you should seriously consider devoting some time to planning out how you will present your new enterprise to potential clients and patrons. The public’s first impression of your company and its products or services is crucial, so it’s vital that you create a name and image for your company that stands out from the competition. Some of the components of branding are:

  • Symbol of your company. If you need a logo quickly, try using Hatchful.
  • Valid representations of the brand’s colors and symbols. The use of a palette can achieve color harmony.
  • A memorable phrase used as a slogan. If you need some motivation, use the Shopify Slogan Maker.
  • Official typefaces or fonts.
  • Vocal tone and pitch.
  • Brand identity and positioning.

An excellent way to inject some of your own personality into your company is through its branding. You may find useful information for starting with Shopify on the Shopify Blog.

How Much Does it Cost to Start a Business in Texas?

Consult a tax professional or lawyer to weigh the benefits and drawbacks of filing as well as the total cost. There is a $300 charge to form a corporation. Each member of an LLC must pay $200. The filing fee for a DBA is $25. A credit card fee may apply; alternatively, you can submit your paperwork in person at the Austin office.

A limited liability company (LLC) in Texas can reserve its name for 120 days by filing a Form 501, Application for Reservation, or Renewal of Reservation of an Entity Name. It costs $40 to accomplish this either digitally or via snail mail.

Is Texas Good for Starting a Business?

Starting a business in Texas even with no money from the country’s second-largest population and a number of rapidly rising metropolitan areas. Texas’s support for small businesses is seen in its inexpensive company licensing fees, lack of red tape, and plenty of reasonably priced real estate. Few jurisdictions can provide the same level of regulatory laxity that makes it possible for businesses to be intact almost instantly and with little out-of-pocket expense.

Does Texas Require a Business License?

In the state of Texas, a general business license is not necessary. However, it is crucial to discover whether a particular company activity requires any licenses, permits, certifications, registrations, or authorizations at the federal, state, or local levels. This is the case at all three levels.

How Much is an LLC License in Texas?

There is a $300 filing fee in addition to the filing of the Certificate of Formation—Limited Liability Company (Form 205) with the Texas Secretary of State required for any new LLC in Texas.

There is a $30 cost for a certified copy of the Certificate of Formation. A Certificate of Status costs $5 if you require one. To reserve a name for your limited liability company (LLC) for up to 120 days before registration, you must submit an Application for Reservation or Renewal of Reservation of an Entity Name (Form 501) and a cost of $40.

Grants for Starting a Business In Texas With No Money

Here are five funding opportunities for your small business. It’s best to check back frequently as grant requirements for starting a business in Texas are offered.

#1. Young Farmer Grants for Starting a Business In Texas

Grant Amount: $20,000 maximum
Seasonal Deadlines: Late March/Early April
The Young Farmer Grant was to encourage young farmers and boost the agriculture sector in Texas. Anyone between the ages of 18 and 45 can participate. The farmer is responsible for providing an equal amount of funding to the grant they get under this scheme. As an illustration, if the entire cost of the project is $20,000, the farmer will need to raise $9,000 before receiving any grant money.

#2. Skills for Small Business

Each new employee might receive a grant of up to $1,800.
The Texas Workforce Commission’s Ongoing Skills for Small Business program is geared toward assisting business owners in the state with the costs associated with educating new employees. Paying up to $1,800 per new hire and $900 for existing employees per year requires a company to have fewer than 100 workers. Community colleges, technical schools, and the Texas A&M Engineering Extension Service are all acceptable training venues. It took courses online for credit, for continuing education, or both are all acceptable forms of instruction.

#3. Fiserv + Clover Back2Business Grants for Starting a Business in Texas

Total Award Amount: $10,000
Time limit: December 31st
The Fiserve + Clover Back2Business Grant Program is looking to award grants to minority-owned businesses in Oklahoma, Texas, the greater Detroit area, and the Washington, D.C./Maryland/Virginia metro area.

#4. Small Business Emergency Grants for Starting a Business In Texas

Money awarded: $25,000 maximum
Time limit: perpetual
The Small Business Emergency Grant Program of the Fort Bend County Commissioners Court offers eligible companies grants of up to $25,000 to help them through difficult financial times. These companies will, however, need to have been running at full capacity as of December 30th, 2019. You will also have to show that your income saw a decrease of at least 25% between 2019 and 2020 and show your completed tax returns for the last two years.

#5. Southern Smoke Emergency Relief Program

Total Award Amount: Varies
Time limit: perpetual
If you run a restaurant or bar, work in the hospitality industry, or are a supplier to the industry and have experienced an unexpected financial hardship that your insurance did not cover, the Southern Smoke Emergency Relief Program may be able to help. The motto of this group is “protecting our own.” As a result, you can utilize this prize to pay for things like healthcare, home repairs, or even FEMA disaster relief. The award-giving committee carefully considers each application before voting on the ultimate grant amount.

Are there Small Business Grants in Texas?

The Skills for Small Business award is provided by the Texas Workforce Commission (TWC). This promotes training for new, full-time employees and assists enterprises with less than 100 employees. Additionally, assistance is given to help current full-time employees improve their abilities.

Where can I Find Money to Launch my Own Company?

  • Government departments and agencies
  • Department of Trade and Industry.
  • Industrial Development Corporation.
  • National Empowerment Fund.
  • Small Enterprise Development Agency.
  • Small Enterprise Finance Agency (SEFA)
  • Technology Innovation Agency.
  • National Youth Development Agency.

Starting a Business In Texas With No Money

Starting a business in Texas with no money is very possible. Actually, there are a few company concepts you may start without spending a dollar of your own money. First and foremost, you’ll need a solid business plan that can be implemented as planned and expanded upon, as well as one that can readily garner the interest and involvement of relevant parties for sufficient capital.

While it is true that starting a business in Texas without money is possible, you will likely need to gather at least enough money to register your company and secure any necessary permissions, licenses, and insurance before you can legally open for business. In addition, before launching your business in Texas, it’s a good idea to research the state’s regulations and the costs involved to make sure you’re not breaking the law.

Which Businesses are Simple to Launch?

Selling digital items is one of the simplest companies to launch and has the lowest overhead. This can include things like software, audio files, online courses, and e-books. This is generally an excellent choice for you if you are a professional in a specific field or niche. Dropshipping is a fantastic alternative as well because such businesses don’t need to maintain inventory. Alternatively, you might make your own or purchase wholesale goods. Once your product is finished, you may sell it via your website or using third-party marketplaces like Amazon or Etsy.

Who in Texas requires a Business License?

In Texas, a general business license is not necessary. However, it’s crucial to identify the federal, state, and municipal licenses, permits, certificates, registrations, or authorizations required for a particular company activity.

Is Texas a Favorable State for Startups?

Texas gives companies the freedom to succeed and to help their employees succeed. It generally has a good regulatory environment and neither a personal nor corporate state income tax. Texas has been named “the #1 state for business” by Chief Executive Magazine for 18 years running.

Before I Start Selling, Do I Need to Register My Business?

It is essential for your firm to be legally recognized and will become important once you start dealing with issues like insurance. If you start hiring individuals, keep in mind that you may need to register as an employer right away, and the only way you can do this is if your business is already registered.

FAQs

Do I have to pay taxes on my small business grant?

Grant money is considered business income but does not require repayment. This implies that any money you get must be reported and taxed.

Can I start a business and pay myself?

Entrepreneurs can take a draw, get a salary, or use a hybrid approach to finance their personal lives. In business, you can get money called a “draw” that comes straight out of the company. Payroll is the procedure through which I process a salary and from which a worker’s share of taxes is deducted.

How do LLC owners get paid?

Members of an LLC can take a distribution from their capital account to fund their salaries. A company check is the standard method of payment.

References

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