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How to Start a Business in Grand Prairie Texas
If you’re thinking about starting a business in Texas, Grand Prairie is a great choice. Grand Prairie has areas within Dallas County, Tarrant County, and Ellis County and has seen steady population growth over the past decade, reaching a population of 193,543 according to the 2020 US Census. Grand Prairie has a healthy median household income of $67,388 and about 28.8% of households have a six-figure income. As a result, starting a business in Grand Prairie Texas is a good bet. In this detailed guide, we’ll go over the 12 steps to starting a business in Grand Prairie so that you can have the best chance to succeed.
12 Steps Checklist to Starting a Business in Grand Prairie Texas:
- Research and Plan your Business
- Choose a Business Structure
- Create a Business Name
- Register your Grand Prairie Business
- Obtain an EIN
- Complete Texas State Registrations
- Apply for Grand Prairie Business Licenses and Permits
- Open a Business Bank Account
- Set up Credit Card Processing
- Establish an Accounting System
- Get Business Insurance
- Hire Employees and Set Up a Payroll
When you want to learn How to Start a Business in Grand Prairie Texas, one of the most important things you should do before even thinking about starting your business is to make sure that you research your business idea and create a business plan. Your business plan should thoroughly outline all of your goals. You will want to ensure that you know what you are doing and that your business has the greatest chance of success. You should look do complex market research on your business. Creating your business plan will help give you a roadmap on how you should begin.
Resource: How to Write a Successful Business Plan
After you have decided what business you will do and you have come up with a business plan, now is the time to choose what kind of business structure you will want to do.The most common types include:
- Limited Liability Company (LLC) A Limited Liability Company, also known as an LLC, separates people who own the business from the business. For example, if the owner has financial trouble, this will protect their personal assets. When it comes through a pass taxation, LLC’s have this by default. This means that you pay your taxes only on your personal income, not the losses and earnings of your business. You can also choose S-Corporation or C-Corporation taxation. Generally, the flexibility and protection of LLC’s have made this business structure the most popular among small business owners.
- Corporation A corporation will be owned by shareholders, and it will be a separate entity from each shareholder. Shareholders will own stock in the business. It can be beneficial because it offers strong liability protection. The downside for smaller businesses is that corporations are subject to "double-taxation".
- Sole Proprietorship If you want to keep your business as simple as possible, you should choose sole proprietorship. This is a basic business structure and best for people who are single business owners. Typically, you do not need to register your business, but you may still have to get licensing and permitting, depending on what your business is. The downside to sole proprietorships is that they can cause a liability risk. For example, if you are ever sued, your personal assets can be used to pay those expenses.
- Partnership A partnership is where a business has two or more owners. This allows the owners to pay taxes, and the business will not owe any taxes. The downside to this structure is that each owner will have unlimited liability.
If you're seeking more help deciding between which business structure would be best for your business, read our helpful guide on how to choose the right business structure for you.
You will want to take your time when you create your business name. After establishing your business, it will be hard to change the name, so make sure that you are happy with it. You will want to choose a memorable name, easy for people to find and that creates a unique identity for your business.
Resource: How to Come Up with a Business Name
Once you have your name picked out, it is time to learn how to Register a Business in Grand Prairie Texas. There are different ways to register depending on the structure of your business.
Register a Texas LLC
An LLC needs to file formation paperwork with the Texas Secretary of State known as Form 205, Certificate of Formation - Limited Liability Company. The Texas Secretary of State charges a filing fee of $300 to submit Form 205, which can be done online or by mail. You'll need to conduct a name availability search before filing the Certificate of Formation to ensure the business name you chose is available.
Resource: How to Start an LLC in Texas
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Register a Texas Corporation
The formation process for a Texas Corporation is similar to that of an LLC. You'll need to file Form 201, Certificate of Formation - For-Profit Corporation with the Texas Secretary of State and pay the $300 state filing fee.
Resource: How to Form a Texas Corporation
Register as Sole Proprietorship
A sole proprietorship in Texas doesn’t require any filing with the state if you choose to use your own name. However, if you want to use a business name that doesn't include your personal name, you need to register with the county clerk to get a "doing business as name" or DBA. Since parts of Carrollton are in Dallas, Denton, and Collin counties, you'll need to ensure you reach out to the correct county clerk depending upon your business's location.
Register a Partnership
Partnerships are quite easy because it doesn’t require any formal filings unless you don’t plan to use the partners’ surnames in the name of the business which requires you to file an Assumed Name Certificate.
Resource: How to Start a Partnership in Texas
When you have a business, you will want to get an EIN. An EIN, which stands for Employer ID Number, is the ID the IRS uses this for employment purposes and for when you file your taxes. You will have a unique number to go with your business, just like everyone has their social security number. You are required to get an EIN if you are running a corporation, partnership, or multi-member LLC. Other business structures may use their social security number instead of their EIN, but it is recommended to go ahead and get your EIN for ease of use.
Resource: What is an EIN and How to Apply for One
In addition to getting your EIN, you will want to make sure that you follow all Texas State tax regulations. Tax regulations will be different for each business. You will have to consider things like employer taxes and sales tax. If you sell physical goods, you will want to make sure that you charge a sales tax and remit your sales tax to the Texas Controller of Public Accounts. This ID is often referred to as a Texas Tax ID.
Texas State Registration Resources:
A general business license is not required in the state of Texas. However, you will still want to make sure that you have licenses that are created for your specific business at both the local, federal, and state level. You may have to have permits or licenses in individual counties and cities. These include signage permits, professional licensing, and building permits. You can look at the Texas Economic Development and Tourism Business Permit Office’s website for more information. For example, if you think you need a Grand Prairie Texas Business License, all you have to do is to go to the website to see if a license is required, or you can call the county business office.
- Federal Business Licenses and Permits
- State of Texas Business Licenses and Permits
- Grand Prairie Texas Business Licenses and Permits
A good idea when starting a business in Grand Prairie is to separate your business finances from your personal finances by having a separate bank account. If you have everything in one account, you risk your personal money and assets. To get a business bank account, you will want to look for banks in your area that have great choices for your bank account. Your own personal bank may have options, so be sure to speak with them about opening up a business banking account.
Resource: How to Open a Business Bank Account
One of the most important things you will need to do for your business is to make sure that you set up credit card processing. Many people only use their credit or debit cards, and if you do not offer this service, you could be our customers. There are many ways that you can process credit cards these days. Popular sites like PayPal and Square have apps to get a card reader or enter the card information right from an app on your phone.
Resource: How to Accept Credit Card Payments
Another thing that you must do when learning How to Start a Business in Grand Prairie Texas, is that you must have a good accounting system. An accounting system will help you track your expenditures and help you create reports to gauge your business performance. When you have a good accounting system, you will be able to manage cash flow, generate financial reports, and create budgets. There are many different types of accounting software out there. You will want to choose one that is easy to use and will help you to grow your business.
Resrouce: Small Business Accounting 101 Guide
One of the main things that you should have when owning a business is business insurance. Far too often, people forget this when running a business, and they end up paying the price. You will want to make sure that you are covered in case you have a lawsuit, natural disaster, or accident. There are many different types of business insurance out there, and many different companies offer business insurance. You will want to do your research on each insurance company to ensure that you choose the right insurance company for your business.
Resource: Read our Small Business Insurance Guide, we go over the six types of business insurance so that you can make sure you’re covered.
Once you have your business set up, you will now want to work on hiring employees. Depending on your business structure, you could do an in-person hiring event, or you can post in your local newspaper and other advertisements. You can even use an employee recruiter service. Just make sure that you hire employees that fit all of your needs. After you have hired your employees, you will want to set up a payroll service to ensure that everyone is paid on time and that everything is recorded.
Starting a business in Grand Prairie Texas is easy, and it is a great place to run your business. Just make sure that you follow all the steps above to ensure that your new business in the Lonestar state is off to an excellent start.