1. Choose a Business Structure:
Choosing the right business structure for your small business in Texas is essential for success. There are several types of entities available, including sole proprietorship, general partnership, limited liability company (LLC), professional LLC (PLLC), C corporation, S corporation, and nonprofit corporation. Each structure has its own advantages and disadvantages, so it is important to choose the one that best suits your business needs.
2. File an Assumed Name Certificate:
If you are operating under a trade name other than your legal name, you must file an “assumed name certificate” or “Doing Business As (DBA) certificate” with the county clerk in the county where your business is located. This will allow potential customers to find and identify your business with ease.
3. Obtain Licenses and Permits:
Depending on the type of business you are starting, you may need to obtain certain licenses or permits from the state of Texas as well as local governments such as counties, cities, or special districts. These licenses and permits may be required for such activities as selling certain products or services, providing professional services, hiring employees, or opening a restaurant.
4. Register With State Tax Agencies:
If you are not already registered with the Texas Comptroller of Public Accounts (CPA) and the Texas Workforce Commission (TWC), you must do so before beginning business operations in the state. You will need to apply for an Employer Identification Number and register for any necessary taxes such as sales tax and franchise tax reporting.
5. Open a Bank Account:
To separate your personal finances from your business finances, open a bank account specifically for your business needs. The type of account that works best for you will depend on your specific needs, so it is important to do research and speak with a banker or financial adviser.
6. Apply For An Employer Identification Number (EIN):
In order to employ individuals in Texas, you must have an EIN from the IRS. This number identifies your business and is used for tax reporting purposes, as well as filing taxes for employees.
7. Purchase Business Insurance:
Businesses operating in Texas require certain types of insurance coverage that protect businesses from potential losses due to accidents or disasters. Speak with an insurance agent to determine which coverages are necessary based on the type of business you are starting and the risks associated with it.
8. Develop an Operating Plan:
Creating a business plan is critical for success in the business world. An operating plan will provide direction, set goals, and help you make decisions regarding your small business in Texas.
9. Establish Accounting System:
For accurate bookkeeping practices, it is important to establish an accounting system that includes tracking expenses, monitoring income, and keeping detailed records of transactions. This will allow you to quickly prepare financial statements or reports when needed.
10. Stay Compliant With Tax Laws:
An essential aspect of running any type of business in Texas is staying compliant with state tax laws and regulations. It’s important to keep up-to-date on all changes and new developments related to taxes that may affect your business.