Texas offers the best business ecosystem in the nation and has frequently been named the best state to start and operate a business. The state’s leading business climate and favorable regulatory environment provide the framework small businesses and entrepreneurs need to succeed.
The Governor’s Office of Small Business Assistance has divided the process of starting a business into seven basic steps. It is advisable to seek the guidance of a professional tax consultant, accountant and/or attorney to help verify that all legal requirements are met before opening up a business.
Follow these seven steps to help you get started in the state of Texas.
Step 1 - Write Your Business Plan
A business plan is a dynamic road map for your business. It should outline the main purpose and value proposition of your business, its structure, financing and competitive advantages. The U.S. Small Business Administration (SBA) has some great templates for crafting a business plan. The Governor’s Office of Small Business Assistance also features a FAQ Video on Creating a Business Plan on their website.
Step 2 - Choose Your Business Location
Choosing a business location will depend on the type of business you operate. Consider looking at area zoning ordinances. Assess how feasible it is to access your supply chain and customers, and if there is an available workforce.
Step 3 - Finance Your Business
There are several ways to fund your new enterprise, including using your own savings and raising money from friends and family. You can also apply for a bank or micro loan, secure a federal loan (via the SBA) or seek credit through personal financing. Other alternatives include crowdfunding, angel or venture capital investors. The SBA offers a useful guide to funding your business. Micro loans are available from Community Development Financial Institutions (CDFIs). Find your nearest CDFI using the online CDFI locator. Visit the Governor’s Office of Small Business Assistance’s Financing and Capital webpage for more information.
Step 4 - Business Structure & Registration
Determine the appropriate structure for your business. In general, sole proprietorships and partnerships need to register and file the business name (DBA or assumed name) with their local county clerk’s office. If you decide to incorporate, the Secretary of State’s Office (SOS) website has information on choosing the right legal structure for you. You can also register the new legal entity on the SOS site. The Governor’s Office of Small Business Assistance offers FAQ Videos on Business Structure & Registration in Texas on their website.
Step 5 - Business Tax Responsibilities
Determine the potential tax responsibilities of the new business 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, the online Marketplace Seller tax information is useful. For questions about local business and property taxes, consult your county’s appraisal district or tax assessor-collector. The Governor’s Office of Small Business Assistance has FAQ Videos on Business Taxes in Texas on their website.
Step 6 - Business Licenses and Permits by Business Type
A general business license is not required in Texas. However, it is important to determine necessary licenses, permits, certifications, registrations or authorizations for a specific business activity, at the federal, state and local level. The 2022 Texas Business Licenses & Permits Guide from the Governor’s Office of Small Business Assistance offers a comprehensive a listing of state permits and licenses required for persons wanting to operate a business enterprise in Texas. For more information or assistance, please contact Governor’s Office of Small Business Assistance’s Business Permit Office (BPO).
You may also watch FAQ Videos on Business Licensing & Permitting in Texas from the Governor’s Office of Small Business Assistance.
Step 7 - Business Employer Requirements
If planning to employ staff, determine federal and state employer requirements. To learn more about Texas employer resources, visit the Texas Workforce Commission’s businesses and employers webpage.
The Governor’s Office of Small Business Assistance
The Governor's Office of Small Business Assistance, within the Texas Economic Development & Tourism Office, assists small and medium Texas businesses through advocacy, entrepreneurial support, education and technical assistance. The team serves as a focal point in the state for start-ups and small businesses of all sizes in urban, suburban and rural communities. The office offers a variety of services, including assistance with permitting, licensing and regulatory compliance, small business resource referrals and informational small business webinars and events. More information can be found at gov.texas.gov/smallbusiness.
Other Resource Organizations
Small Business Development Centers (SBDCs) are a partnership between the SBA and universities. They provide free advice on marketing, financing and business growth to local businesses, start-ups and entrepreneurs. Find your nearest SBDC in Texas using the online directory.
SCORE is a national network of experienced executives who volunteer as mentors. They help start-up and established entrepreneurs to grow their businesses. SCORE also provides workshops and courses in business education. Find your nearest SCORE chapter using the online SCORE locator.
Libraries are a great resource for researching a new business or a new market. Libraries subscribe to costly business information databases, which members can use at no cost. Find your nearest library using the online library locator.
Most localities in Texas have resources for small businesses as well. Check with the economic development department nearest you to see how they can help you.
If you have further questions about starting a business in Texas, or resources available to small businesses, you may email the Governor's Small Business Assistance team at smallbusiness@gov.texas.gov.
Additional Resources from the Governor’s Office of Small Business Assistance:
The Governor’s Small Business Resource Portal provides small businesses and aspiring entrepreneurs with the most relevant resources and contacts to help find success. This important tool offers a customized list of useful business resources to assist in starting or growing your business in Texas.
Small Business Webinars & Events are held throughout the year—online and in-person in each region of the state—to share relevant, timely and actionable advice from experts on a multitude of small business topics and challenges. Recordings from prior webinars and events, FAQ videos, and more can be found on the office’s YouTube channel.
The Business Permit Office assists businesses in navigating Texas’ permitting, licensing and regulatory environment. In addition, the office publishes the Texas Business Licenses & Permits Guide.
The Governor’s Small Business Handbook provides guidance and assistance to those interested in developing or further expanding their business in Texas.
