Establishing a new business requires careful research and planning to ensure that your company is successful. Every state has its own guidelines and regulations for starting a business, and Texas is no exception. To help you get started, we've broken down the 10 steps to starting a small business in Texas. The Lone Star State is ranked as the ninth largest economy in the world. It's also home to more than 100 of the largest companies in the United States, including tech giants like Tesla and Dell.
Decide what type of business you plan to set up. It's important to do a market study to ensure that the area in which you would like to build needs the type of business you want to start. Texas has a large population (more than 29.5 million people), so there is a high demand for many types of businesses. You can apply for an EIN online or send your SS-4 form by mail or fax.
Other tax-related forms may be needed, depending on the type of business you're in. You can check out the Texas Business License and Permit Guide to verify this. Once you have completed and submitted the AP-201 form, you will receive your permission in two to three weeks. See the Texas name filing FAQ webpage for answers to frequently asked questions about Texas business names and for links to forms your business may need.
From a business perspective, this step can be just as important as submitting legal documentation for your company. This comprehensive permit guide provides a list of state permits that may be necessary for individuals who wish to operate a commercial enterprise in the state. The fact that companies that work from home lack a storefront and, therefore, lack this visibility, may mean that marketing efforts need to be much stronger. The Texas government website for starting a business in Texas is a great resource for small businesses.
You can search the Texas Public Accounts Comptroller's database to see if a similar business name exists. If you need to seek funding from investors or lenders, you'll want to develop a formal business plan. Basically, a business plan documents the purpose of your company, the business structure, a marketing strategy, financial projections, market research and your competitive advantage, among other factors. You can see what business names are already in use looking for businesses on the Texas SOSDirect website. If you have an online retail business that operates from home, you must have a Texas sales and use tax permit, which you can obtain online at no charge.
The EIN is necessary for tax purposes and helps the government identify your company in order to keep track of your company's taxes. Before starting a small business in Texas, do your research to ensure you're complying with all state and federal laws. However, Texas imposes a franchise tax on most types of businesses, including corporations, LLCs, S corporations, and partnerships. Because Texas does not have a personal or corporate income tax, owners of some forms of businesses will not owe state taxes on their business income.