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Texas is the second-largest economy in the US. It ranks top for economic growth and is, therefore, a good choice for you to start a business.
Why Texas is the Best Place to Start a Business
Texas has led the nation in job creation for the past ten years, and in the last 14 years, it has led in population growth. Here are the reasons why you should start a business in Texas.
- A business-friendly climate with no corporate income tax and no personal income tax
- Easy access to global markets
- Lower land rates and fewer land-use restrictions
- Highly skilled workforce
- Lower energy costs
- Robust infrastructure
- Lower cost of living for the employees.
Step by Step Guide to Start a Business in Texas
Step 1: Choose an Idea
Choosing a business idea involves thinking about your interests, your personal goals, and your natural abilities. Considering these three things will improve your odds for success and help you stay motivated even when things get tough.
Step 2: Plan and Analyse Your Business Idea
The success of any business idea is highly dependent on planning. Do a critical analysis of your business idea, and create a game plan before committing a significant amount of resources to it. Below is a list of things you need to plan.
- Business Name: consider settling for a brand name that resonates with your customers and following the Texas naming rules. A brand name that is available as URL is also a great advantage.
- Product Development:Â Look at the problem that your business will solve and what will make your product or service stand out from the competition.
- Sales and Marketing: think of your potential customers and how you will get their attention and turn them into buyers.
- People and Partnership: find out the roles you will need to hire and the professional partnerships you need to form to kickstart your business.
- Financial Planning: think of how much money you will need to start your business and where you will get the funding. Also, think of how much sales you will need to sustain your business.
Step 3: Register your Business
Think of how you want to register your business. You can register it as a legal business entity or a corporation. This will increase the credibility of your business as well as protect you from personal liability in case the business is sued. If you want to start a small business, you can register it as an LLC, which is easier to manage and attracts favourable tax treatment. If you fail to register your business as an entity, you risk being held responsible for the liabilities and debts that your business incurs.
Step 4: Register for Taxes
You may need to obtain an Employer Identification Number (EIN), which will help you hire employees and open a business bank account. EIN is also known as Tax ID Number identifies your business during federal tax fillings. You need to register for Texas Sales Tax if you want to sell a physical product, and if you want to hire employees in Texas you need Unemployment Insurance Tax on behalf of your employees.
Step 5: Open a Business Bank Account
Mixing your personal and business accounts puts your personal assets at risk in case your business is sued. A business bank account will also make accounting and tax filing easier, as well as build your business’s credit history.
Step 6: Set up an accounting System
A good accounting system will simplify your annual tax fillings as well as help you track your business performance. The system should be able to help you download your bank and credit card transactions.
Step 7: Obtain Permits and Licenses
To operate your business in Texas legally, you will need to obtain one or more business permits depending on your area of operation. A restaurant, for instance, requires you to obtain health permits, signage permits, building permits, etc.
Step 8: Get Insured
Insurance will cushion you from risks and enable you to focus on your business. The most common recommended types of insurance are, General Liability Insurance, Professional Liability Insurance, and Workers Compensation Insurance.
Step 9: Define Your Brand and Promote Your Business
To develop a good brand, you should consider what your business stands for, your core values, and earning your customers’ trust.
Step 10: Establish an Online Presence
Consider a professional website for the long-term success of your business. A website makes you accessible to potential customers and enhances your credibility. Also consider other online avenues like social media profiles, review sites, and a local google profile.
How Much Does it Cost to Start a Business in Texas?
If you want to start a Limited Liability Company in Texas, you first pay $300 to the Texas Secretary of State as you fill the LLC’s Certificate of Formation. If you want to reserve your name, you will pay $40 to fill Form 501, this will reserve your name for up to 12 months prior to formation. If you are starting a lending institution, you will pay an additional $5 for a Texas Certificate of Good Standing. You will also pay for permits and licences depending on the type of business.
Best 5 Business Ideas to Start a Business in Texas
Drive-In Movie Theater
If you can target your film selection to older customers looking to relive their childhood, find an arcade, a playground, and convention stand and start a drive-in movie theatre.
Clothing Boutique
A clothing boutique creates a more intimate environment for customers since its smaller than a regular clothing retailer. Your success will lie in forming a relationship with regular customers.
Dog Breeding Business
Dog lovers are enthusiastic about particular breeds of dogs. Chose a breed and serve the people who love that breed.
Grocery Store
Grocery stores are important local resources as they are the go-to sources for a home’s daily food needs. You can add many products to your store, such as kitchen utensils, cleaning materials, disposable items, soft drinks, and self-care items.
CBD oil Business
You can open up an online or a physical store to sell CBD oil for a variety of purposes such as anxiety, chronic back pain, etc