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How to Start a Business in Irving Texas
Are you thinking about starting a business in Irving Texas? The Lonestar state ranks third highest in the United States for starting new businesses. Last year alone, more than 750,000 businesses opened in Texas. This state is a huge attraction for entrepreneurs in the technology industry as well as many others. Are you an entrepreneur that is ready to establish a business in Texas? The following checklist will guide you through the process.
12 Step Checklist to Starting a Business in Irving Texas
- Research and Plan Your Business
- Choose a Business Structure
- Create a Business Name
- Register Your Business
- Obtain an EIN
- Complete Texas State Registrations
- Apply for 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
Chances are you already have an idea of what you want your business to be but you are wondering how to start a business in Irving Texas. Begin with conducting a competitive analysis and market research online to see what the competition is doing. This will help you get a clear vision of the industry you plan to enter and become familiar with your target audience.
Next, use the information from your research to develop a well-thought-out business plan. According to a study conducted by the Harvard Business Review, a business plan increases your chance of success by 16% compared to not developing one.
Resource: How to Write a Successful Business Plan
Establish the business structure according to the way you will earn money for your business, tax status, and tax liability. The state of Texas offers a variety of types of business structures. Choose the right option for you from the list below:
- Limited Liability Company (LLC) – This business structure separates the people who own it from the business which protects their personal assets from financial or legal issues related to the business. LLCs have become one of the most popular business structures among small business owners since its combines the liability protection of a corporation wit the pass-through tax benefits of a sole proprietor or partnership.
- Corporation – This business structure is a separate legal entity from the shareholders who own it.
- Sole Proprietorship – This option is the easiest way to start a business in Texas. The business structure is beneficial for single owners. Typically, this option doesn’t require you to register your business but depending on your business, you might need to get permits or licenses.
- Partnership – This business structure is similar to a sole proprietorships except that it is for 2 or more owners.
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.
The name of your business is highly important because it’s what you will build your brand from and use on social media platforms for digital marketing purposes. Make sure you choose a memorable name that reflects your business. In today’s digital world, you need to choose a business name that is easy to search online and doesn’t sound like or resemble another business to prevent confusion.
Resource: How to Come Up with a Business Name
At this stage, you are ready to register a business in Irving Texas. You need to register your business according to the business structure. The process will vary depending upon the business structure you choose. Below you'll find a brief description of the registration process for each business structure along with a link to a more in-depth guide on it's registration process.
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.
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
An Employer Identification Number (EIN) is used for filing taxes with the IRS and for employment purposes. LLCs, Corporations, and Partnerships require an EIN to conduct business. Sole proprietorship uses their personal social security number to file taxes and for other business filings.
Resource: What is an EIN and How to Apply for One
As a business owner, you need to make sure you comply with Texas State tax regulations. This depends on the type of business you have and if you need to pay employer tax or sales tax. For example, if you sell products, Texas sales tax is required. However, if you have employees, the Texas Workforce Commission employment tax is required.
Texas State Registration Resources:
Obtaining an Irving Texas business license depends on the type of activities you conduct and if they fall under the local, state, or federal level. Some businesses need permits or licenses within the county or city level such as signage and building permits as well as professional licensing.
- Federal Business Licenses and Permits
- State of Texas Business Licenses and Permits
- City of Allen Texas Business Licenses and Permits
Separating your personal finances and bank accounts with your business is recommended. This is especially recommended for Corporations and LLCs because it can confuse accounting and bookkeeping. You can open a business bank account at financial institutions in Irving Texas.
Contact the bank of your choice to see which documents are required to open a business account. Generally speaking, you'll need to bring in any formation documents (Certificate of Formation or Certificate of Assumed Name) and your EIN confirmation letter (known as CP 575). Keep in mind a deposit is usually required at the time you open the account.
Resource: How to Open a Business Bank Account
Businesses in Irving Texas usually accept a variety of credit cards as a form of payment from their customers. About 60% of transactions over $10 are paid by using credit cards. Set up credit card processing for your business to ensure you offer your customers the option.
If you have a brick-and-mortar store, you can use a simple card reader during the checkout process. It’s affordable, easy to use, and a simple process. You can also choose a point of sale transaction (POS) system that is an integrated computerized network. A POS provides inventory management, credit card processing, and transactions.
Online retail and eCommerce stores can set up accepting credit cards through the website builder such as BigCommerce, Shopify, and WordPress.
Resource: How to Accept Credit Card Payments
Keeping track of your business finance is essential to your success as an owner. You need to develop an accounting system that generates financial reports, manages the cash flow, creates budgets, and more. There are a variety of computer programs you can choose that provide the accounting system and support you need to run a successful business in Irving Texas.
If you don’t feel comfortable using computer software to manage your business finances, you can hire an accounting team or service.
Resrouce: Small Business Accounting 101 Guide
Accidents happen and as a business owner, you need to protect your investment. Obtaining business insurance is recommended to help you in case of a lawsuit, natural disaster, or accident. There are a variety of business insurance options you can choose from such as general liability, product liability, commercial property, professional liability, business owner, and home-based business insurance. Check with local insurance agencies in Irving Texas for more information.
Set up a hiring process and payroll to make it a smooth process. You can choose to conduct background checks, testing, and interviews when searching for the right candidate for the positions you are trying to fill.
Now that you know how to start a business in Irving Texas, get started today!