There are a lot of things you need to do to be in business, and undoubtedly, the first thing is to come up with a business idea. You must be able to choose a product or service that fills the gap in the market, but before that, you need to select a location. Of course, you will choose a place where you have an audience looking for your product or service, and that is in droves to speed up your sales.
Texas is the best place to start a small business. Thanks to its large population, it provides you with several business opportunities. If you have finally decided to have your business based in Texas, you should complete the following preliminary tasks. It is always advisable that you consult a tax or accountant expert before arriving at a decision.
- Start by writing your business plan
A business plan is a road map for your business. Although this seems an unnecessary task, you must have the one to ensure that your business will make the grade. The business plan will help you map out business opportunities, who will be your target audience, how you will get the business, how much money you will need to invest, and how long it will take to convert your audience into sales.
Another reason why it is crucial to have a detailed business plan is that your lender will look at it to decide whether to sign off on it or not when you apply for start-up business loans in Texas. Your business plan will let your lender make a projection on your profits. If a lender suspects that your business plan does not have the potential to generate enough profits to be able to pay off debts on time, they will refuse you a loan. Therefore, you should have a strong business plan.
- Choose your business location
Texas is not so small, so you must choose a specific location within it. The location you will choose depends on multiple factors, and one of them is where your target audience is situated. You will likely choose a place to operate your business from where you can access as many customers as possible. Focus on the supply chain to choose a business location.
- Register your business
There are multiple types of entities you can choose for your business. Once you know the entity you want to use for your business, it will become easier for you to do the paperwork. Go to the Texas Secretary of State’s portal to file the paperwork. Choosing the right business entity is highly vital so you do not struggle down the road.
Limited liability company
This is the most common type of entity that most of the entrepreneurs choose. It brings a lot of flexibility. However, initial capital is relatively high.
You will need this entity if you are looking to raise capital from shareholders. This entity is not suitable for small entrepreneurs. The stock of the company will be divided into multiple types of shares.
This is the most suitable entity if you are looking to start a small business. Your business will have no separate identity from you. All of the liability will fall on you. You do not have to file the formation paper.
General and limited partnership
You will need to form a partnership if you want to handle your business with at least one partner. It is not required to form the entity with the state. You both will be sharing the profits and liabilities. However, you can file a formation for a limited partnership if you have at least one general partner and one limited partner.
- Choose the right business name
The registration requires you to have a business name. This is not the thing you will keep changing, so make sure that you choose the name that best fits your business. While choosing a business name, make sure another is not using that name. In fact, it must not be similar to other businesses. Conduct online research to find out if any name is available similar to the one you have picked for your business.
- Apply for employer identification number (EIN)
The next step is to apply for an EIN. It is the tax identification number of your business used by the federal government to identify your business. Go to the IRS website and apply for the EIN there. Note that not all types of business entities need to apply for the EIN, such as self-employed. You can get information from the IRS website.
- Apply for business licenses
After forming a business entity, you must know what kind of licenses and permits you will need. The licenses you will need for your business depend on the industry you are dealing in. Once you have registered your business, you should immediately apply for all necessary licenses and permits. You cannot run your business without them, and doing so is illegal even if it is in progress.
- Open a business bank account
As your business has a separate entity, you should open a separate business account. This is mandatory if you are registered as a limited liability company or partnership. However, you do not necessarily have to open a bank account if you are self-employed.
- Get financing
No business can survive without money. Even a start-up will need money as fuel to hit the ground running. You should have enough money to supply your business unless it reaches the breakeven point and starts making profits.
If you are looking to borrow money, analyze your business so that you will not suffer any problems paying off the debt. It is always advisable that you consult a finance broker company in the USA that will help introduce you to a lender that matches your requirements.
The bottom line
To start your business in Texas, you will have to meet the aforementioned criteria. However, these prerequisite steps are essential even if you want to run your business in any state or county. Once you have formed the entity of your business in Texas, your job is not over yet.
You will have to spend money on marketing, hiring employees and many more. Your business in Texas can thrive only when all administrative tasks are done efficiently.