Start a business in Texas in six steps
Are you considering starting a business in the Lone Star State? Read on for six steps to becoming an entrepreneur in Texas.
There are some wisdoms that hold true wherever you choose to start a business – from Texas to Tonga. But there are also some rules and regulations that are unique to the country or state you wish to operate your business in.
In this article we’ll combine both – general good business advice, and details that are specific to launching a new business in the state of Texas, USA.
1) Come up with a business idea
The first thing you will need for any business, is an idea. All businesses solve a problem that a defined group of people have. Grocery stores, for example, solve the problem of being able to conveniently and affordably buy food. And dentists solve the problem of poor dental health that can lead to pain and tooth-loss.
So when thinking of your business idea, it’s important to be clear about what problem you solve, and for who.
2) Choose a business name
Once you have a firm idea for your business, the next step is to decide on a name for it. There are three main types of business name:
- A business name that is descriptive
- A business that is named after you
- A business with a creative name
A business name that is descriptive might be something like Convenient Food, or Healthy Teeth. If it was named after you, it might be Hannah Martin Groceries, or Hannah Martin Dental. And a creative name could be anything, such as Green Sky or Magic.
When choosing a name, it needs to be something that will appeal to your target audience, and be a good fit for the kind of business you will operate. For instance, The Crazies might be a good name for a bar with a young demographic, but it wouldn’t be a wise choice for a bank!
The final thing you need to look into when choosing a name for your new business is that there isn’t already a business with the same or very similar name. You don’t want to copy another company, nor cause confusion. And you definitely don’t want to find yourself fighting a copyright battle further down the line!
3) Conduct market research
There is one thing that every business needs: and that is customers. But how can you tell whether people will actually want to pay for what your business offers? This is where market research is important.
Find people who are the type of people who would buy or use your offering, and ask them what they think of your idea and name. Invite opinions – good and bad – and listen to any suggestions.
You don’t have to take on board any of their ideas, but it is important to properly consider them before discounting them. After all these are the people you will be hoping to sell to. Do pay particular attention to any strong opinions, or reservations that are shared by several different people.
Sometimes we can be so close to our own business idea, that we can’t see it clearly and can cover-estimate its potential. This can be bolstered by friends and family, who want to see us do well, offering loyal, blind encouragement.
The cold, impartial opinions of strangers, particularly people who are or who are like the people you ultimately want to sell to, are invaluable and deserve to be listened to.
It’s also wise to evaluate the marketplace you want to enter, at this stage of your planning too. Consider things like:
- Who will your business be in competition with?
- How does their offering compare to yours?
- How much are they charging?
- Where will your business sit within the market?
4) Write a business plan
Once you have an idea and name and have finished your market research, it is time to come up with a plan. Writing a business plan is a good way of testing the viability of your idea. It forces you to consider all aspects of business – from target audience and marketing, to your production line and finances.
If there are any holes in your thinking, your business plan should identify them. This gives you the opportunity to come up with workable solutions now, before you have launched your business and lost time and money. It also enables you to revisit and tweak your business idea if necessary, or maybe change it altogether.
If you need outside resources in order to get your business off the ground, your business plan should tell you. You can then incorporate them into your pricing to ensure that your enterprise is financially viable.
5) Decide on your business structure
One of the most important early decisions you’ll make about your business is what structure to use. In Texas, there are four types of business structure you can choose from:
- A sole proprietorship
- A partnership
- An LLC
- S-Corporations and C-Corporations
If you are looking for a business structure that makes your business look professional and gives you protection, you might want to opt for a Texas LLC.
A limited liability company (LLC) is a business structure that prevents you from being liable for your company’s financial losses and debt liabilities. So if your business fails, you personal assets, such as your home, vehicle and personal funds, are protected.
6) Start your business!
By this stage you have an idea and name for your business, you have researched the market, written a business plan and decided on your business structure.
The next stage is exciting… it is time to make your business real and actually take steps to start it. Your business plan will have given you an outline of what needs to be done. You just need to turn your business plan into steps, and set goals for yourself to work towards.
If you have followed this process, your hard work will pay off, and you should have a business with the potential to succeed. Good luck!