Texas boasts one of the best business ecosystems in the U.S. and is consistently ranked as a top state for startups. Its pro-business environment and favorable regulatory framework provide a solid foundation for small businesses and entrepreneurs to thrive. Starting a business in Texas involves seven key steps. Before you begin, consider consulting with a tax advisor, accountant, and/or attorney to ensure full legal compliance.
Step 1: Create a Business Plan
A business plan is the roadmap for your business. It should outline your core purpose, value proposition, organizational structure, financials, and competitive advantages. The U.S. Small Business Administration (SBA) offers several helpful business plan templates.
Step 2: Choose a Business Location
Selecting a business location depends on your type of operation. Consider zoning regulations, assess access to supply chains, customers, and workforce availability.
Step 3: Secure Funding
There are many ways to finance your new business, including using personal savings, borrowing from friends and family. You can also apply for bank loans, microloans, federal loans (through the SBA), or use personal financing. Other options include crowdfunding, venture capital, or angel investors. The SBA offers helpful guidance on funding your business. Microlenders are available from Community Development Financial Institutions (CDFIs). Find your nearest CDFI using the online CDFI locator. Also, visit our Finance and Capital webpage for more information.
Step 4: Structure and Register Your Business
Determine the right structure for your business. Typically, sole proprietorships and partnerships need to register and file their business name (DBA or assumed name) with the local county clerk’s office. If you decide to incorporate, the Secretary of State’s (SOS) website provides information on choosing the right legal structure. You can also register a new entity on the SOS website. This process directly relates to registering a business in Texas.
Step 5: Business Tax Responsibilities
Identify your new business’ potential tax obligations with federal, state, and local tax authorities. Federal tax obligations are filed through the Internal Revenue Service (IRS). State tax filings are done through the Texas Comptroller of Public Accounts (CPA). If starting an online business, this online Marketplace Seller tax information will be helpful. For questions on local business and property taxes, consult your appraisal district or county tax assessor-collector. Find your local appraisal district and tax office on the CPA website.
Step 6: Licenses and Permits by Business Type
A general business license is not required in Texas. However, it’s crucial to determine the necessary permits, licenses, certifications, registrations, or authorizations required for a specific business activity, at the federal, state, and local levels. Our Texas Business Licenses & Permits Guide 2024-2025 provides a comprehensive list of state licenses and permits required for those wanting to operate a business in Texas. For further information or assistance, please contact the Business Permit Office (BPO) of Texas Economic Development & Tourism.
Step 7: Business Employer Requirements
If you plan to hire employees, determine the federal and state employer requirements. To learn more about Texas employer resources, visit the Texas Workforce Commission’s business and employer website.
