5 Cool Tips for Conducting Business in Texas
Are you looking to start a new business? If you’re not tied down to any particular location, you should consider where the best place for your new business is.
Texas has consistently ranked as the best state for starting and running a small business. If you’re already a Texan, then you’re in luck. If you’re not, there are more than a few good reasons to relocate and open your business in the Lone Star State.
Before getting started, however, there are a few important things you should know about opening a business in Texas. From tax laws to legal structures, and everything in between, starting a business is different in each state.
Keep reading to discover five important tips for conducting business in the largest state in the lower 48.
1. Low Fees in Texas
One of the best reasons to start a business in Texas is the low fees for doing so. In many states, the cost of starting a business can be prohibitive to many aspiring entrepreneurs with lots of passion but limited funds.
In Texas, you can get your business up and running for a few hundred dollars. You can get started with a sole proprietorship, and use your personal name for your business.
You can register a Doing Business As (DBA) name. If choosing a name for your business, make sure to research if other companies have that name in the state of Texas already.
Start with a Google Search. Then, check the database of the state of Texas to see if anyone has already registered that name. Lastly, check to see if that name is trademarked.
There’s a chance you can still use a name that’s already been used if you’re in a different industry. When in doubt, consult a business or trademark attorney. Business registration is cheap and fast here in Texas.
Obtaining an EIN, or business tax identification number, is also free of charge. This will help with all of your financial and tax-related tasks, such as banking, opening a line of credit, and so forth.
Depending on your line of work, you may need various licenses. But you do not need a general business license.
2. Abundant Real Estate
Everything is bigger in Texas. A tiny commercial space in many states and cities might cost a fortune. But in Texas, there’s an abundance of commercial real estate available.
Whether you are looking to buy your own building or rent in the beginning, Texas will have space for you.
The major cities are very large and spread out, so there’s no shortage of areas to find a property to conduct business.
3. Less Red Tape
What makes Texas so great for business owners? It eliminates much of the red tape that exists in other states. Texas boasts a free market, where entrepreneurs and businesses aren’t held back by excessive regulation and restrictions.
The tax and regulatory structure of Texas were designed to be very fair, transparent, and easy for businesses to navigate. It was designed for businesses to have success, not for governments to have control or to suck up as much tax revenue as possible.
Whether you are running a small business or one of the 49 Fortune 500 companies that call Texas home, it’s a pleasure doing business in the state.
4. Setting Up a Legal Entity
One of the most important aspects of starting a business in Texas, or any state for that matter, is setting up a legal business entity. While a sole proprietorship is the most popular business structure, it’s not the best by any means.
It doesn’t offer any form of protection and puts the owner at risk if the business were to struggle.
Instead, consider starting an LLC. The process is fairly straightforward and inexpensive. You’ll need to generate a few business documents, such as an LLC operating agreement.
Having an LLC is the easiest way to protect yourself. It adds a layer of protection between you and the business. If someone were to sue your business for any reason, they’d only be able to go after the assets of the business, not your personal assets like your home or life savings.
There are also pass-through tax advantages to having an LLC. That means you won’t have to pay any corporate taxes. Rather, the taxes are passed onto the owner of the business as they file personal income taxes. This can simplify the tax process, helping you avoid paying taxes multiple times.
5. Rapidly Growing Population
Another big benefit to doing business in Texas? It currently boasts the second-highest population in the nation. Texas is huge, and it ranks only behind California in the number of residents that call it home.
This means that you’ll have no shortage of business opportunities when it comes to carving out your slice of the market, especially if you live near any of the metropolitan areas.
But what’s even better? The big brains, who have traditionally done business in the Bay Area of California, are fleeing the West Coast in droves. With millions now able to work remotely, they are leaving the high-cost coastline and filling up states like Texas at a record pace.
This means more wealthy families coming to Texas, and willing to pay for high-end products and services. If you’re a custom home builder, for example, that’s great news.
With a booming economy overall, the quality of life in Texas is higher than in many parts of the country. Low taxes make for happy work. And the money goes further, thanks to an abundance of real estate, affordable housing, and lower cost of goods than on the coasts.
When you get good employees in Texas, it will be easier to keep them for the long haul.
Running a Successful Business in Texas
Running a business in Texas is much more enjoyable than running a business in most other states. Texas prides itself in making it as easy as possible for entrepreneurs.
So what are you waiting for? Start your business today and start living your American dream.
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