How to Start a Business in Texas in 8 Steps
When it comes to starting a business in Texas, the Lone Star State has a lot of potential. With an average gross domestic product of $1.77 trillion, Texas has one of the largest economies in the United States, second only to California. And it’s not stopping there—Texas’ rapidly expanding economy grew at a healthy rate of 10.1% in the last quarter of 2021, compared to the average national rate of 6.9%.
Texas’s favorable economic climate, paired with low tax and labor costs makes it a promising location for new ventures to thrive. In fact, today it’s home to over 3 million small businesses—running the gamut from health care and educational services to construction companies, entertainment and more.
With all of this in mind, we’ve put together our guide to starting a business in Texas in just 8 steps.
Once you’ve got your business idea, create a website to jumpstart your venture.
Start a business in Texas in 8 steps
01. Come up with a business idea
Every great new venture begins with a great business idea. From the type of business you create, to how you market your product or services—starting a successful business in Texas depends on choosing a concept that’s viable from the get-go. While you may already have ideas you’re considering, keep in mind that the best business ideas are those that solve a specific problem or meet the needs of today’s consumers
Research is crucial to this step, and should be geo specific. Your business idea doesn’t necessarily have to be original—some of the biggest global brands started by selling a product that already existed in the market. What’s more important is to make sure your idea is affordable, marketable and appropriate for your target market in the Lone Star State.
If you’re looking to start a business in Texas, here are some good ideas to kickoff your research:
Food and beverage: Texas has an abundance of restaurants, wineries and breweries that serve its growing population, evolving foodie culture and the large numbers of tourists who visit every year. Whether it’s a barbeque joint, coffee shop, brewery or catering service, Texas is an ideal location for developing all sorts of food and beverage based businesses.
Tourism and travel: Thanks to its diverse geography and rich cultural heritage, Texas is a popular destination for both local and international tourists. From renting out holiday accommodations, to running boutique tours or selling souvenirs—Texas is a great place to launch into the tourism industry.
Pet related services: Texas has a young population of animal lovers, pet-raising families and farms. With a large (and growing) number of pet owners, starting a pet grooming or sitting service, for example, is a low-cost business idea with potentially high demand in Texas.
Event planning: You can take advantage of Texas's burgeoning art and music scene to start a business related to event planning. With the wide range of music and cultural events taking place each year, this could mean setting up a catering service, an event planning business, or even organizing your own annual event.
Regardless of which business idea you choose to start, make sure to take the time to understand the competitive landscape and market in Texas. Part of having a sustainable business is creating a plan that will bring in a profit.
02. Choose a business type
The type of business you’ll start will vary depending on your interests, goals, skills and resources. Here are some examples of types of businesses that have potential for success in Texas:
With an online business, you can choose to sell almost anything—from any location. This could be products you sell from an online store, or providing a professional online service, such as tutoring or a virtual consultation business.
Tip: Use Wix to create an ecommerce website and grow your online presence.
Whether it’s home cleaning, pet grooming or personal training, service businesses are relatively easy to start and require minimal startup costs. They’re also a great way to start a business without needing to hire employees, which can come as you scale its size in the future.
If you have an expert skill that can benefit others—whether its business, marketing, branding or something else altogether—starting a consulting business can be a great way to branch out on your own. Plus, starting a business based on your own expertise can be a way to turn your passion into a profit.
Social media based business
The potential to start and market a business on social media has grown significantly over the last decade. This could be as a social media influencer, or as a social media consultant for other brands and companies.
03. Decide on a business structure
Once you have an idea to run with, you’ll also need to consider which business structure you’ll use. This will practically influence future operations—from registering a business to personal liability, to taxes and accounting.
Here are some of the most basic types of business structures:
Sole proprietorship: A business run and owned by one individual with no legal distinction between the owner and their business.
Partnerships: A legal arrangement between two or more people who agree to operate a business together and share profits and losses.
Corporations: A legal entity that is separate from its owners and is established to conduct business and can be owned by shareholders.
Limited liability companies (LLCs): Combines the advantages of both a corporation and a partnership, providing limited liability to its owners while also allowing for flexibility in management structures.
Nonprofits: An organization that strives to serve a charitable purpose without the intent of making a profit.
04. Name your Texas business
When naming your business in Texas, make sure it’s unique, memorable and Texas-centric (Think: The Lone Star Cleaning Co., Houston Tutors, El Paso Delivery, etc.). Part of this includes choosing a business name that’s easy to spell and pronounce, and accurately reflects the products or services you offer. Consider how your business name will be represented in various marketing or advertising mediums—from printed materials to digital assets, like your logo design.
Once you’ve thought of a catchy business name, it’s a good idea to research if the relevant domain name is available for your website. In addition, check with the Texas Secretary of State for name compliance guidelines and consider trademarking your name in order to prevent others using it in the future.
Tip: Need help finding the perfect business name? Use a business name generator tool for ideas and inspiration.
05. Write a business plan
You can’t start a business without having a comprehensive business plan—it’s an essential part of setting the right foundations. Making a business plan that works in Texas will require you to do detailed market research and analysis in the area.
Your plan should outline the goals and objectives for your venture, provide details on your competitors and outline specific funding plans and financial benchmarks. Be sure to include a clear path to profitability, and any challenges that you might face along the way.
06. License and register your business in Texas
In order to register and operate a business in Texas, you must obtain the necessary licensing. Since these requirements vary depending on the type of business you’re starting, make sure to check the demands of your local county or city offices and determine the specific licensing needed in your industry.
In some cases, you may also need additional licenses from different state agencies, such as the Texas Department of State Health Services or the Texas Commission on Environmental Quality.
Here are some essential steps to keep in mind when registering a business in Texas:
Obtain an EIN from the IRS for tax purposes.
Apply for the necessary permits and licenses depending on your business idea. For example, starting a business in Texas that sells food, alcohol or tobacco requires specific licensing from the Texas Alcoholic Beverage Commission.
Register for state taxes with the Texas Comptroller of Public Accounts and apply for a sales tax permit so you can file sales tax returns.
Register for local taxes with your local county or city government.
Apply for the necessary business insurance. In Texas businesses must carry certain types of insurance, such as workers’ compensation insurance or commercial liability insurance.
For further information and guidance on how to register a business in Texas and obtain the necessary licensing, contact the Business Permit Office licensing office Texas and relevant industry associations.
07. Secure business funding
How you raise capital and secure business funding can make all the difference when starting a business. In Texas, it’s important to research and evaluate the different funding options available before you find the best fit. Keep in mind that over time, your funding needs may change as you begin to expand and scale your business.
There are several ways to fund a business in Texas, including:
Personal assets: Using personal savings is a common way for many entrepreneurs to start and grow their business initially.
Friends and family: Close family are often a source of business funding and support either in the form of loans, investments or gifts.
Bank loans: Many banks offer specific loans to fund small businesses, these may have to be secured by collateral such as real estate or other means.
Small Business Administration (SBA) loans: The SBA provides loan guarantees to small businesses through participating lenders. You can contact the SBA closest to you for further information on their funding options: Fort Worth, West Texas, Houston, San Antonio.
Venture capital: Venture capital firms invest in early-stage or high-growth companies in exchange for an ownership stake.
Incubators and accelerators: Incubators and accelerators provide startups with mentorship, office space, and other resources in exchange for a small equity stake. Capital Factory is an example of an Austin-based accelerator.
Government grants: Both national and state governments may provide grants to businesses that meet certain criteria, such as those involved in research and development. In Texas, these can be accessed through the Texas Enterprise Fund and the Governor's Small Business Assistance Program.
08. Create a business website
Building your online presence with a business website is essential if you want your small business to succeed in Texas. A professional website is a digital marketing asset that will build your brand, showcase your products or services, and connect with potential customers. On top of that, the increasing popularity of eCommerce means that your site is potentially a great place to make sales.
When creating your website, consider how each page should be designed to enhance usability and engagement. Additionally, you should focus on creating high-quality content that is relevant to your brand and engages with your target audience. You can start by choosing a business website template and customizing it to suit your needs. You’ll also need to select a domain name and web host.
Since you want to stand out from competitors in Texas, it's important to consider how your website design will represent your brand and turn new visitors into loyal customers. This includes incorporating the right color schemes and visual imagery, while paying careful attention to the tone of its written content. You can read our full guide on how to make a business website to help get started.
Once you’ve launched your new business website, you need to promote it to relevant audiences. From strategies like email marketing to SEO and social media campaigns—website promotion should be part of the detailed marketing plan for growing your business in Texas.
Business examples in Texas
Ready to start your Lone Star State venture? Check out some of our favorite small business examples in Texas for inspiration. All of the businesses below use a Wix website to help manage their growth and success.
Crazy Wellness Retreat
Located in Mineral Wells, Texas, the Crazy Wellness Retreat is an initiative that brings together health practitioners, wellness experts, local business owners and community organizations to offer holistic health workshops and immersive experiences.
Texas based whiskey distillery Bingham’s Bourbon produces bourbon solely from Texas grown rye, wheat, barley and corn. The bourbon is produced in small batches by Texan native, country music singer and business owner Ryan Bingham.
Resilience Viet Kitchen
Serving up Vietnamese-inspired dishes and craft cocktails in the heart of Texas, Resilience Viet Kitchen uses their restaurant website to draw in new visitors and serve returning ones. Including photos of the restaurant’s interior, an updated version of their menu and table reservation services—it's a great example of how a small business website can satisfy a wide range of customers.
Looking to start a business in another state? Check out how to start a business in California, or 7 steps to starting a business in Georgia.
By Kylie Goldstein
Business and Branding Expert