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How to Start a Business in Texas in 12 Easy Steps

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Anastasia Belyh

Last Update

Feb 11, 2025

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Starting a business in Texas offers exciting opportunities but comes with challenges like licensing, permits, and planning. This guide simplifies the process and sets you up for success.

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1. Choose Your Business Idea

Choosing the right business idea is the first step in starting your Texas venture. Your idea should align with your skills, passion, and market demand.

  1. Identify your strengths. Think about what you’re good at. Are you a great baker, designer, or handyman? Your strengths can become the foundation of your business.
  2. Solve a problem. Businesses that address a specific need tend to succeed. For example, offering eco-friendly cleaning services caters to the growing demand for sustainability.
  3. Research market trends. Look for industries thriving in Texas, such as real estate, technology, or food services. Use tools like Google Trends or market research reports.
  4. Consider scalability. Choose a business idea that can grow over time. For instance, a freelance writing business could expand into an agency with multiple writers.

Take time to evaluate your idea’s potential profitability and sustainability. A strong idea sets the stage for long-term success.

2. Decide on a Business Structure

Your business structure determines your legal responsibilities, tax obligations, and personal liability. Choosing the right one is crucial for a solid foundation.

  1. Sole proprietorship. Ideal for simple, small businesses. It’s easy to set up, but you’re personally liable for debts and obligations.
  2. Limited Liability Company (LLC). Popular in Texas for small businesses. It offers liability protection while being relatively easy to manage.
  3. Corporation. A more formal structure suitable for larger businesses with shareholders. It involves more paperwork but offers greater tax and growth opportunities.
  4. Partnership. Best for businesses with two or more owners. It’s straightforward to form but requires a clear partnership agreement.

Research each structure’s pros and cons before making a decision. Consult a legal or tax professional if needed.

3. Register Your Business Name

Registering your business name ensures no one else in Texas can use it and makes your business official. It’s also a key step in building your brand.

  1. Choose a unique name. Make sure your name reflects your business idea and is memorable. Check availability using the Texas Secretary of State’s online tool.
  2. File an Assumed Name Certificate (DBA). If operating under a different name than your legal name, you’ll need to file a DBA with your county or the state.
  3. Reserve your name if necessary. Texas allows you to reserve a business name for up to 120 days while you finalize your setup.
  4. Secure a domain name. If you plan to have a website, register your domain name at the same time to ensure it matches your business name.

Registering your business name builds trust and helps you establish a professional image from the start.

4. Obtain Necessary Licenses and Permits

Texas requires specific licenses and permits depending on your business type and location. Failing to comply can result in fines or delays.

  1. General business license. Texas does not require a statewide general business license, but your local city or county may.
  2. Industry-specific licenses. Businesses like food services, construction, or childcare need specialized permits. Visit the Texas Department of Licensing and Regulation (TDLR) for industry-specific information.
  3. Sales tax permit. If you’re selling taxable goods or services, register for a Texas Sales and Use Tax Permit through the Comptroller of Public Accounts.
  4. Health and safety permits. Businesses in industries like food or healthcare may need to pass inspections and obtain additional certifications.

Stay compliant by checking with local authorities and industry organizations to ensure you have all the necessary permits.

5. Apply for an EIN

An Employer Identification Number (EIN) is a unique number issued by the IRS. It’s essential for taxes and hiring employees.

  1. Free application. Apply for an EIN online through the IRS website. It’s free, and you’ll receive your EIN immediately after completing the form.
  2. Who needs an EIN? Most businesses require an EIN, especially LLCs, corporations, and partnerships. Sole proprietors may also benefit from having one.
  3. Why it’s important. An EIN is needed to open a business bank account, file taxes, and handle payroll if you hire employees.

Getting your EIN early simplifies many other steps in starting your business.

6. Open a Business Bank Account

A dedicated business bank account separates your personal and business finances, making bookkeeping and tax filing much easier.

  1. Choose the right bank. Look for a bank with low fees, convenient locations, and online banking features. Many Texas-based banks cater to small businesses.
  2. Gather required documents. You’ll need your EIN, business registration documents, and possibly an operating agreement for LLCs.
  3. Consider credit options. Open a business credit card to start building credit for future expenses or growth opportunities.

Having a business bank account keeps your finances organized and builds credibility with clients and vendors.

7. Develop a Business Plan

A solid business plan outlines your goals, strategies, and financial projections. It also helps attract investors or secure loans if needed.

  1. Define your mission and vision. Clarify what your business stands for and where you see it in the next 3–5 years.
  2. Outline your products or services. Detail what you’re offering and how it solves a problem for your target audience.
  3. Create a marketing strategy. Explain how you’ll reach customers, including advertising, social media, and word-of-mouth.
  4. Include financial projections. Estimate your startup costs, revenue, and expenses for at least the first year.

A business plan keeps you focused and serves as a roadmap for success.

8. Register for Taxes in Texas

Texas businesses must comply with state tax requirements. Registering for taxes ensures you’re collecting and remitting the correct amounts.

  1. Sales tax permit. Apply for a sales tax permit if you’re selling goods or taxable services. You can register online with the Texas Comptroller.
  2. Franchise tax. Most Texas businesses must pay a franchise tax. This is calculated based on your revenue and is due annually.
  3. Understand local taxes. Some cities in Texas have additional taxes or requirements, so check with your local government for details.

Staying compliant with taxes avoids penalties and keeps your business running smoothly.

9. Set Up Your Business Website

A professional website establishes your online presence and makes it easy for customers to find and contact you.

  1. Choose a platform. Platforms like Wix, Squarespace, or WordPress are beginner-friendly and allow you to create a website without coding experience.
  2. Register your domain. Pick a domain name that matches your business name. Use services like GoDaddy or Namecheap to secure it.
  3. Include key pages. Your website should have an About page, a Services or Products page, a Contact page, and a FAQ section to address common questions.
  4. Focus on design and functionality. Use a clean layout, professional photos, and clear navigation. Make sure your website is mobile-friendly and loads quickly.
  5. Optimize for search engines. Use keywords related to your business, such as “Texas landscaping services,” to improve your website’s ranking on Google.

A strong website increases your visibility, builds trust, and helps convert visitors into customers.

10. Promote Your Business Locally

Promoting your business in Texas helps you attract customers and generate awareness in your community.

  1. Leverage social media. Platforms like Facebook and Instagram are great for reaching local audiences. Share updates, promotions, and behind-the-scenes content.
  2. Network with local businesses. Attend community events or partner with complementary businesses to cross-promote your services.
  3. Use local advertising. Invest in print ads, radio spots, or online listings on platforms like Yelp or Google My Business.

Local promotion ensures you connect with your target audience and establish a strong presence in your area.

11. Launch and Start Selling

Once your business is set up, it’s time to officially launch and start generating revenue.

  1. Host a launch event. Create buzz with an in-person or virtual event. Offer exclusive discounts to attract your first customers.
  2. Collect feedback. Use early customer feedback to refine your products, services, or processes.
  3. Track sales and expenses. Use accounting software to monitor your finances and ensure profitability from the start.

A successful launch sets the tone for your business and builds excitement around your brand.

12. Monitor and Optimize Operations

Ongoing monitoring helps you identify areas for improvement and ensures your business stays on track for growth.

  1. Track performance metrics. Monitor sales, customer feedback, and website traffic to see what’s working and what isn’t.
  2. Streamline processes. Look for ways to improve efficiency, such as automating repetitive tasks or renegotiating supplier contracts.
  3. Plan for expansion. Set goals for adding new products, locations, or services as your business grows.

Continuous optimization keeps your business competitive and ensures long-term success.

Frequently Asked Questions

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Author

Anastasia Belyh

Anastasia Belyh is a senior tech writer with over 15 years of experience in marketing, sales, and business software. Having worked in investment banking, management consulting, and founded multiple companies, her in-depth knowledge and hands-on expertise make her software reviews authoritative, trustworthy, and highly practical for business decision-makers.