Regarding business, they say everything in Texas is bigger and better. Texas is the home of some of the top companies in the world, including AT&T, American Airlines Group, and Baker Hughes, to name a few.

Entrepreneurs are attracted to build their startups here due to its pro-business climate and reasonable access to venture capital. Texas has been popular with business people due to the many benefits of the business environment and the abundance of skilled workforce.

Small businesses are the foundation of the Texas economy, which is why this state is considered one of the healthiest and fastest-growing economies in the nation.

Why is Texas famous for new businesses?

Texas has an abundance of talent. A successful startup must have a great company team. A business needs many talented individuals, including engineers, HR, and more, to succeed. Take a look at some of the most successful businesses in Texas, such as Dallas Business Lawyer – Roquemore Skierski.

However, the common mistake startups make is hiring too quickly. Perhaps the candidate’s skills don’t really fit the role. However, a starting small business may hire and onboard them anyway. 

Businesses in Texas offer significant tax benefits. Many business owners flocked to Texas to do business. Many states, including Texas, are implementing tax laws that benefit small businesses. It is one of the top 15 states without a corporate or individual income tax. The thriving economy and lack of income tax continue to make Texas an attractive state for business startups.

Open for innovation. When talking about innovation, you will likely think of the East and West Coasts. But consider events such as South by Southwest, held in Austin annually—this celebrates the transforming landscape of media and technology. Innovation happens all around Texas, leading the nation in job creation. 

Friendly climate for small businesses. The U.S. Small Business Friendliness Survey evaluates how cities and states receive small businesses. The survey examined critical components like the ease of hiring, tax code, regulations, training programs, and overall friendliness in each state from 2012 to 2021. Texas received a B in 2021, the first year it received a grade below A. However, it received a grade A for ease of starting a business, employment, tax code, regulations, labor and hiring, and licensing.

If you are one of the business owners attracted to having a startup in Texas, you must know the basics of starting it, including the Texas business laws and requirements.

Choose a Business Idea

Start your research about the business you are interested in. You should know if there is a demand in your geographic region for the goods or services you propose. You should also research if there is much competition or a known brand has already saturated the market.

Consider whether you have experience in the industry as well. Note these essential things and the budget—do you have enough capital to cover the startup costs and sustain it until it’s profitable?

Map out your vision and plan for the short—and long-term goals. Consider your funding options as you create your business plan. Be prepared to pitch to investors, apply for a business loan, or contact family members. 

Decide on your business structure once you’ve settled on an idea. Form from one of these business entities: 

  • Sole proprietorship
  • Partnership
  • Limited liability companies (LLCs)
  • Corporations

You can also use a limited partnership, where business partners have limited liability. Texas recognizes professional corporations and LLCs as business entities reserved for licensed professionals.

Each business structure has advantages and disadvantages, so choose the one that best fits your business goals. Depending on your situation, it is best to consult with experts who can help. You can form a corporation or LLC if you want personal protection from business debts, and a sole proprietorship or general partnership if you want a business that won’t require you to file paperwork or pay maintenance fees.

Choose a Name for Your Business

This will be your brand, appearing in your advertisements, signs, merchandise, and other places. It is as essential as filing legal paperwork for your business.

Choose a unique name that identifies your business. The Texas law requires a distinguishable name that’s different enough from other business names filed with the Texas Secretary of State. You can check Texas’s SOSDirect website to see the names of businesses that have already been taken.

Register with the Texas Secretary of State

You can register your business by mailing the correct formation document to the SOS or using SOSDirect online. The organization documents are on the SOS website under the business and nonprofit forms section. Some types of businesses don’t need paperwork filed.

Apply for Permits and Licenses

All businesses must apply for at least one permit, license, or registration. 

Tax Registration. If you are selling goods, apply for a sales tax permit. Most must register with the Comptroller of Public Accounts (CPA) to pay the state franchise and other business taxes.

Employer Identification Number. You must obtain an EIN from the IRS if you have employees or are taxed separately from you. You may not be required to get an EIN, but there are business reasons for doing this. Banks may require an EIN to open a business account, and companies you work with would need this to process payments. You can get this online by completing an online application on the IRS website.

Regulatory Permits and Licenses. These licenses cover environmental, health and safety, building and construction, and specific services and industries. State agencies usually issue these permits.

Pick a Business Location and Check Zoning Regulations

Choose your business location and check the local zoning regulations. Research the needs of your target market and determine if your business will benefit from food and highway traffic. Before committing to a location, calculate the costs of placing your business in that preferred spot. Verify that the area is zoned for your business type. 

Whether starting a business in Texas or elsewhere, it’s always best to plan and prepare. But aside from your preparations, you can also seek professional help, especially regarding legal matters in Texas business.