Starting a business can be tough, but it’s even tougher when you don’t have any money. So how can you start a business in Texas with no money? Here are some tips to help you get started.
Familiarize Yourself With Texas
Texas is a big state with a lot of opportunities. If you’re thinking about starting a business in Texas, it’s important to familiarize yourself with the state and its laws. Here are some tips to help you get started.
Learn the Basics About Texas
The more you know about the state, the better prepared you’ll be to start a business here. Some key facts to know include:
- Texas is the second largest state in the US by population and size.
- Texas has a strong economy, thanks in part to its thriving energy sector.
- Texas has a favorable business climate, with low taxes and regulations.
- Texas is home to major cities like Houston, Dallas, Austin, and San Antonio.
- The cost of living in Texas is relatively low compared to other states.
Familiarize Yourself With Texas' Business Climate
Knowing what it takes to start a business in Texas will help you make informed decisions about your new venture. Key factors to consider include:
- The cost of doing business in Texas is among the lowest in the nation.
- Texas has friendly tax laws for businesses, including no personal income tax and no corporate income tax.
- There are few regulations on businesses in Texas, making it easy to start up and get running.
- The workforce in Texas is educated and skilled, making it easier to find the talent you need for your business.
Understand the Laws Governing Businesses in Texas
Before you start a business in Texas, you’ll need to understand the state’s laws on businesses. Some key things to keep in mind include:
- Texas has a "right to work" law, which means that businesses can't require employees to join a union.
- Texas has laws protecting businesses from lawsuits, making it easier to defend your business if someone sues you.
- Texas has laws that allow businesses to operate without a lot of government interference.
Plan Your Texas Business
Now that you know a little more about Texas [1] and its business climate, it’s time to start planning your new venture. Here are some tips to help you get started:
Choose the Right Business Idea
Not all businesses will be successful in Texas. To increase your chances of success, choose a business idea that fits well with the state’s strengths. For example, businesses that rely on the state’s energy sector or its skilled workforce are more likely to find success than businesses that don’t take advantage of these resources.
Choose the Right Location
The location of your business can make or break your success. When choosing a location for your business, consider factors like the cost of real estate, the availability of skilled workers, and the proximity to your target market.
Choose the Business Name
A business plan is a critical tool for any business, but it’s especially important if you’re starting a business with no money. Your business plan will help you raise money from investors, secure loans from banks, and get your business off the ground.
Get Co-Founders If Needed
If you don’t have the skills or experience necessary to start your business on your own, consider bringing on co-founders. Co-founders can help you with the financial and legal aspects of starting a business, as well as provide valuable advice and insight.
Make Your Texas Business Legal
Now that you’ve planned your business and chosen a name, it’s time to make your business legal. To do this, you’ll need to:
Choose a Business Structure
The first step in making your business legal is to choose a business structure.
Corporation
A corporation is a legal entity that’s separate from its owners. This means that the owners of a corporation are not personally liable for the debts and liabilities of the business.
Limited Liability Company (LLC)
An LLC is a business structure that offers limited liability protection to its owners. This means that the owners of an LLC are not personally liable for the debts and liabilities of the business.
Limited Partnership (LP)
An LP is a business structure that has one or more general partners and one or more limited partners. The general partners are personally liable for the debts and liabilities of the business, while the limited partners are not.
General Partnership (GP)
A GP is a business structure in which all partners are personally liable for the debts and liabilities of the business.
Limited Liability Partnership (LLP)
An LLP is a business structure in which all partners have limited liability protection. This means that the partners are not personally liable for the debts and liabilities of the business.
Sole Proprietorship
A sole proprietorship is a business owned and operated by one person. This type of business has no legal distinction between the owner and the business, which means that the owner is personally liable for the debts and liabilities of the business.
Obtain an Employer Identification Number (EIN)
An Employer Identification Number (EIN) is a nine-digit number issued by the IRS that’s used to identify businesses for tax purposes. To obtain an EIN, you’ll need to file an application with the IRS.
Register Your Texas Business
After you’ve obtained your EIN, you’ll need to register your business with the state of Texas. To do this, you’ll need to:
File a Certificate of Formation
To form a corporation or LLC in Texas, you’ll need to file a Certificate of Formation with the Secretary of State. The Certificate of Formation must include:
- the name of the business
- the address of the business
- the type of business entity
- the names and addresses of the directors or officers
- the name and address of the registered agent
- the effective date
File a Partnership Certificate
To form a partnership in Texas, you’ll need to file a Partnership Certificate with the Secretary of State. The Partnership Certificate must include:
- the name of the partnership
- the address of the partnership
- the names and addresses of the partners
- the name and address of the registered agent
- the effective date
Register Your Business Name (DBA)
If you’re doing business under a name that’s different from your legal business name, you’ll need to register your DBA with the county clerk in the county where your business is located.
Obtain Necessary Permits and Licenses
Depending on the type of business you’re starting, you may need to obtain certain permits and licenses from the state or local government.
Register Your Texas Business for Taxes
Once you’ve registered your business, you’ll need to register it for taxes. To do this, you’ll need to:
Obtain a Sales Tax Permit
When you’re starting a business in Texas, one of the first things you need to do is obtain a sales tax permit from the Comptroller of Public Accounts. This permit will allow you to collect sales tax from your customers on taxable goods and services. To obtain a permit, you’ll need to fill out an application and submit it to the Comptroller’s office.
Once your application is approved, you’ll be issued a permit number that you’ll need to display at your business location. You’ll also need to register for e-Services, which is an online system that allows businesses to file and pay their sales taxes. After you’ve obtained your permit and registered for e-Services, you’ll be ready to start collecting sales tax from your customers.
Obtain a Franchise Tax Certificate
Before you can start operating your corporation or LLC, you’ll need to obtain a franchise tax certificate from the Texas Comptroller of Public Accounts. This certificate is also sometimes called a “Certificate of Formation” or ” Certificate of Authority.” The certificate is what officially registers your business with the state of Texas.
To get the certificate, you’ll need to file an application and pay the required fees. The whole process can be done online, and it usually takes about two weeks to complete. Once you have your franchise tax certificate, you’ll be able to move forward with opening your business.
Register for Small Business Payroll Taxes
When you’re starting a business that will have employees, it’s important to register for small business payroll taxes with the Texas Workforce Commission. This will ensure that you’re withholding the correct amount of money from your employees’ paychecks and that you’re paying the correct amount of taxes yourself. To register, you’ll need to fill out a form and provide some basic information about your business.
Once you’re registered, you’ll be able to access online resources and tools to help you manage your payroll taxes. You’ll also be able to view your tax liability and make payments online. By taking care of this important step, you can ensure that your business is compliant with the law and avoid any penalties.
Set Up Federal Tax Payments
Setting up federal tax payments is a crucial part of starting a business that will have employees. The IRS requires all employers to withhold taxes from their employee’s paychecks and to remit those taxes to the government. Failure to do so can result in penalties and interest charges. The best way to ensure that you are compliant with the IRS is to set up federal tax payments as soon as you hire your first employee. (But when to issue the 1099 form? Find out next!)
This can be done online, and you will need to provide information about your business, such as your Employer Identification Number (EIN) and the amount of taxes you will be withholding. Once you have set up your account, you will be able to make tax payments on a quarterly or annual basis. Making regular payments will help you avoid penalties and keep your business in good standing with the IRS.
Set Up State Tax Payments
As a business owner, you are responsible for ensuring that your employees’ state taxes are paid on time. The Texas Comptroller of Public Accounts offers a convenient online system that makes it easy to set up state tax payments. First, you will need to create an account and provide some basic information about your business.
Once your account is set up, you will be able to add employees and view your tax liability. You can also set up automatic payments so that your taxes are paid on time every month. By using the online system, you can save time and ensure that your business is compliant with state tax laws.
Get Funding for Your Texas Business
If you’re starting a business in Texas, you may need to obtain funding from investors, banks, or the government.
Obtain Funding From State Agencies
If you’re looking for funding to start your business in Texas, you may be able to obtain it from state agencies such as the Texas Enterprise Fund or the Texas Emerging Technology Fund. The Enterprise Fund provides grants and loans to companies that are expanding or relocating to Texas, while the Emerging Technology Fund invests in businesses with high-growth potential.
To be eligible for funding from either of these organizations, your business must meet certain criteria and be able to demonstrate that it will have a positive impact on the Texas economy.
Obtain Funding From SBA-Backed Lenders
The Small Business Administration (SBA) guarantees loans made by approved lenders in order to encourage lending to small businesses. This guarantee makes it easier for small businesses to obtain financing on favorable terms. In Texas, there are a number of SBA-backed lenders that offer to finance businesses of all sizes.
Borrow From Texas Banks
If you’re starting a business in Texas, you may be able to borrow money from banks located in the state. The first step is to meet with a loan officer and discuss your business plan.
You’ll need to provide financial statements, tax returns, and other documentation to prove that your business is feasible and that you have the ability to repay the loan.
Banks typically require collateral for business loans, so you’ll also need to pledge assets such as real estate or equipment. If you’re able to secure a loan, you’ll usually get better terms and rates from a Texas bank than from an out-of-state lender.
Borrow From Alternative Lenders
If you’re looking for funding to start a business in Texas, you may want to consider borrowing from alternative lenders. Alternative lenders include online lenders, peer-to-peer lenders, and specialty finance companies.
Online lenders typically offer loans with shorter terms and lower interest rates than traditional banks. Peer-to-peer lenders are individuals who have pooled their money to lend to small businesses.
Specialty finance companies provide financing for specific purposes, such as equipment financing or working capital loans. There are a number of advantages to borrowing from alternative lenders, including faster approval times, flexible repayment terms, and the ability to customize your loan.
However, it’s important to compare offers from multiple lenders to ensure you’re getting the best deal.
Obtain a Texas Small Business Grant
The Texas government offers a number of grants to small businesses each year. To be eligible, businesses must meet certain criteria such as being located in a designated disaster area or having a certain percentage of low-income employees.
Businesses can apply for grants online through the Texas Grant Opportunities website.
If you’re starting a business in Texas, be sure to check if you’re eligible for any of these grants. It could be the boost you need to get your business off the ground.
Get Your Texas Business Insured
When you’re starting a business in Texas, it’s important to make sure that you have the right insurance coverage in place. There are a variety of different types of insurance that businesses need to carry, and the amount of coverage you’ll need will depend on the type of business you’re operating.
Obtain Worker's Compensation Insurance
Worker’s compensation insurance is designed to provide benefits to employees who are injured or become ill as a result of their job.
In Texas, all businesses with employees are required to have worker’s compensation insurance. This insurance can help to cover medical expenses and lost wages for employees who are injured on the job.
It can also provide death benefits for the families of employees who are killed as a result of their job. Worker’s compensation insurance is an essential part of doing business in Texas and can help to protect your business in the event of an accident or injury.
Get Professional Liability Insurance
If you’re starting a business in Texas that provides professional services, you may need to get professional liability insurance. This type of insurance protects your business from financial damages if you are accused of professional negligence.
For example, if you are a doctor and a patient accuses you of making a mistake that caused them harm, your professional liability insurance would cover your legal expenses.
Professional liability insurance is not required by law in Texas, but it is something to consider if your business could be held liable for damages.
Obtain Property Insurance
One of the many things you’ll need to take care of when starting a business in Texas is obtaining property insurance. If you have any business property, such as office equipment or inventory, you’ll need to make sure it’s properly insured.
The good news is that there are a variety of options available, so you should be able to find a policy that meets your needs and budget.
One thing to keep in mind is that property insurance doesn’t just cover physical damage; it can also provide protection in the event of theft or liability. As such, it’s an essential part of any business operation. With a little research, you should be able to find the right property insurance policy for your company.
Get Product Liability Insurance
If you’re running a business in Texas that sells products, you may need to get product liability insurance. This type of insurance protects your business from being sued if a customer is injured by one of your products. Product liability claims can be expensive to defend against, so it’s important to make sure you’re properly protected.
You can get product liability insurance through most commercial insurers, or you can purchase a stand-alone policy. Be sure to shop around and compare rates before buying any policy.
Obtain Vehicle Insurance
If your business uses vehicles, you’ll need to make sure they’re properly insured. In Texas, business vehicle insurance is separate from personal insurance, so you’ll need to purchase a commercial policy. There are a few things to keep in mind when shopping for commercial vehicle insurance. First, be sure to assess your risks and choose a policy that provides adequate coverage.
Second, remember that commercial policies are more expensive than personal policies, so be prepared to budget accordingly. Finally, don’t hesitate to shop around and compare rates from different insurers. By taking the time to find the right policy, you can ensure that your business is protected in the event of an accident.
Hire Employees and Report Them to the State
Texans pride themselves on being hard-working people, and when you’re starting a business in the Lone Star State, you’ll need to find employees who can live up to that reputation. The first step is to post your job openings in places where qualified candidates are likely to see them.
Once you’ve found some candidates, it’s important to conduct thorough interviews and reference checks before making any offers. Once you’ve made your hires, you’ll need to report them to the state.
You’ll need to provide each employee’s name, Social Security number, address, and date of birth. You’ll also need to indicate whether they’re full-time or part-time and whether they’re exempt or non-exempt from overtime pay. By taking these steps, you can ensure that you’re complying with the law and that your business is off to a strong start.
Promote and Market Your Texas Business
Marketing your Texas business can be a challenge, but there are some effective ways to get started.
Define Your Brand
Your brand is the unique identity of your business. It includes your company name,logo, tagline, and other elements that set you apart from your competitors.
Your brand should be consistent across all of your marketing materials, from your website to your business cards. By defining your brand, you can create a cohesive marketing strategy that will appeal to your target audience.
When defining your brand, it’s important to consider what makes you unique. What can you offer that your competitors can’t? What do you want people to think of when they hear your company name? Answering these questions will help you create a brand that is true to your business and that will resonate with your customers.
Create Your Website
Creating a website for your Texas business is easy with these tips. First, you’ll need to choose a domain name that represents your business well and is easy for customers to remember. You can register your domain name through a variety of online companies. Once you have registered your domain name, you will need to find a web hosting service.
There are many web hosting companies that offer services specifically for businesses in Texas. Once you have found a web hosting company, you can begin designing your website.
Be sure to include information about your business on your website, such as your contact information, products or services offered, and anything else customers would need to know. You should also make sure your website is easy to navigate and looks professional. By following these tips, you can easily create a website for your Texas business.
Establish Social Media Accounts
When you’re starting a business in Texas, one of the first things you need to do is set up social media accounts. Many potential customers will look for your business online, and social media is an important way to connect with them.
In addition, social media can be used to promote special offers, announce new products or services, and build brand awareness.
Setting up social media accounts is a simple process, but it’s important to take the time to do it right. Choose a platform that makes sense for your business, and make sure your profile is complete and accurate. Establishing a strong social media presence will help you attract new customers and maintain a successful business.
Connect With Local Media
When you’re starting a business in Texas, it’s important to connect with local media. This can help raise awareness of your business and get people interested in what you’re doing. There are a few different ways to go about this. One is to reach out to local journalists and offer them story ideas related to your business.
Another is to hold a press event where you invite local media to come and learn more about your company. You can also submit press releases to local news outlets, which can help generate coverage for your business. By taking some time to connect with local media, you can give your business a boost from the start.
Start Running Your Texas Business
There are a few things you’ll need to do to get your business up and running in Texas.
Set Up Banking Accounts
If you’re starting a business in Texas, you’ll need to set up banking accounts. This can be done by visiting a local bank or credit union, or by opening an account online.
When setting up your account, you’ll need to provide your company’s name and address, as well as your contact information. You’ll also need to deposit funds into the account, which can be done by transferring money from a personal account or by sending a check.
Once your account is set up, you can use it to pay for business expenses, such as inventory and marketing. You can also use it to receive payments from customers. Setting up a banking account is an important step in starting a business, and it’s one that you’ll need to take care of right away.
Open a Business Credit Card
There are many benefits to opening a business credit card in Texas. First, it can help you build your business credit score. By using a credit card and paying your bills on time, you can demonstrate your financial responsibility to potential lenders and vendors. This can make it easier to get financing for your business in the future.
Additionally, a business credit card can give you access to cash back rewards and other perks that can save you money.
Finally, having a business credit card can help you track your business expenses more easily. When it’s time to do your taxes, you’ll have all of your expenses conveniently organized in one place.
So if you’re starting a business in Texas, be sure to open a business credit card. It’s an essential tool for success.
Set Up Accounting
When starting a business in Texas, you’ll need to set up the accounting. This means figuring out how you will keep track of your finances and making sure you are organized.
There are several ways to do this, but the most important thing is to find a system that works for you and your business.
You may want to hire an accountant or bookkeeper to help you with this, or you may be able to do it yourself using accounting software. Whichever route you choose, setting up your accounting early on will save you a lot of time and headaches down the road.
Set Up Computer Systems
If you’re starting a business in Texas, you’ll need to set up computer systems. First, you’ll need to decide what type of system you need. For example, if you’re going to be selling products online, you’ll need a system that can handle transactions and inventory. You’ll also need to choose a software platform.
Once you’ve decided on the type of system you need, you’ll need to find a reliable hosting company. There are many companies that offer hosting services, so be sure to do your research before selecting one. Once you’ve found a good hosting company, you’ll need to set up your domain name.
Finally, once your system is up and running, you’ll need to make sure it’s secure. Be sure to choose strong passwords and install security software. By following these steps, you can be sure that your computer systems are set up correctly.
Set Up Payroll and Other Administrative Operations
Before you can start hiring employees in Texas, you’ll need to set up some basic administrative operations. This includes setting up a payroll system and obtaining the necessary permits and licenses. You’ll also need to decide how you’ll handle employee records and benefits.
Once you have all of this in place, you’ll be ready to start building your team. Payroll can be a complex process, so it’s important to have a good understanding of the law before you get started. Fortunately, there are plenty of resources available to help you navigate the process.
Grow Your Texas Business
Growing your business takes more than just a good idea and some elbow grease – it takes planning, preparation, and a whole lot of hard work. But if you’re up for the challenge, the rewards can be great.
Deliver Excellent Customer Service
If you’re starting a business in Texas, you’ll need to deliver excellent customer service. This means creating a positive experience for your customers from the moment they walk in the door until the time they leave.
To do this, you’ll need to train your employees on how to handle customer interactions and create a warm and welcoming environment.
You should also focus on quickly addressing any problems that may arise. By delivering excellent customer service, you’ll create loyal customers who will be more likely to come back in the future.
Focus on Profitability
Starting a business is a risky proposition, no matter where you do it. But if you’re starting a business in Texas, you need to be especially mindful of profitability.
That’s because the state has a unique tax structure that can make it difficult for businesses to turn a profit. The state’s franchise tax, for example, is imposed on the gross receipts of businesses, regardless of whether they are profitable.
As a result, businesses in Texas need to be especially diligent about generating revenue and controlling costs. Only by focusing on profitability can businesses in Texas hope to overcome the state’s challenging tax environment.
Keep Your Business Finances in Order
As a business owner, it’s important to keep your finances in order. This means knowing where your money is coming from and where it’s going. To do this, you’ll need to create a budget and track your spending. You may also want to hire an accountant or bookkeeper to help you with this.
In addition, you’ll need to make sure that you’re paying your taxes on time. Failure to do so can result in penalties and interest charges. By keeping your business finances in order, you’ll be able to avoid these problems and run your business more effectively.
Keep an Eye on the Competition
The Texas business landscape is highly competitive. No matter what industry you’re in, you can be sure that there are already established businesses vying for the same customer base. As a result, it’s important to keep an eye on the competition and learn from their successes and failures.
One way to do this is to attend industry trade shows and events. Here, you’ll have the opportunity to meet with other business owners, learn about new products and services, and get a better sense of what your competition is up to.
You can also stay up-to-date on industry news by subscribing to trade publications and following relevant bloggers and social media influencers.
By staying informed about the latest developments in your field, you’ll be better equipped to take on the competition.
Choose a Location With Growth Potential
When choosing a location for your business, it’s important to consider the area’s growth potential.
If the population is stagnant or declining, it may be difficult to find customers or employees. On the other hand, if the area is experiencing rapid growth, your business will have plenty of opportunities to expand.
The state of Texas is a great place to start a business, as it has one of the fastest-growing economies in the United States.
In addition to a growing population, Texas also offers a favorable business climate, with low taxes and a strong workforce. As a result, choosing a location in Texas with growth potential is a wise decision for any entrepreneur.
FAQ
Which is the Simplest Business to Start?
There is no definitive answer to this question, as the simplest business to start will vary depending on the individual and the specific business they have in mind.
However, some general tips that may make starting a business simpler include keeping things small and focused, outsourcing or automating where possible, and having a clear plan with measurable goals.
Additionally, it can be helpful to choose an industry that you are familiar with, as this can make the learning and research process simpler.
Finally, remember that no business is truly “simple” to start, so be prepared to put in the hard work and dedication required for success.
How Much Does It Cost to Start a Business in Texas?
There is no one-size-fits-all answer to this question, as the cost of starting a business in Texas will vary depending on the specific business in question.
However, some general costs that may be associated with starting a business in Texas include the cost of incorporating the business, obtaining any necessary licenses or permits, renting or purchasing office or retail space, and hiring employees.
Additionally, there will likely be some marketing and advertising expenses associated with getting the new business off the ground.
Conclusion
Starting a business in Texas can be a challenge, but if you’re prepared and you have a solid business plan, you can be successful. There are a number of resources available to help you get started, and if you focus on delivering excellent customer service and keeping your finances in order, you’ll be well on your way to success.
