Between March 2019 and March 2020 69,430 small businesses opened in Texas and 60,952 small businesses closed. This statistic demonstrates the difficulty of successfully operating a small business. Starting a business is a daunting task and anything which can make success even a little bit easier is always welcome. That is why this article will outline several steps which any business can undertake to ensure the best possible start it can have.
Pick A Business Name
While this may seem like a small and superfluous task, it is actually very important for the success of your business. A good business name will set your business apart from the competition. Your business’s name will also be the foundation of your business’s brand which is extremely important in the current business environment. Good branding can be the difference between success and failure and it all starts with a name.
Incorporate An LLC
One of the best ways to establish any business is to incorporate an LLC. An LLC is a limited liability company. This is a business entity which provides limited liability protection to the business owner. This means that if the business goes into debt or goes bankrupt, creditors cannot expropriate the assets of the business owner. Similarly if the business owner goes bankrupt in a personal capacity creditors cannot expropriate business assets. To get a head start on LLC formation in Texas consult this website for help.
Request An EIN
An EIN is an employee identification number and it functions like a social security number for a business. This is required to open a business bank account which is highly recommended. It is also the first step in the process of developing business credit. An EIN will also be useful for tax purposes as it is necessary when filing tax withholdings for employees as well as filing for other forms of tax.
Ensure You Have The Correct Licenses And Permits
This will not necessarily apply to every small business as Texas does not require any general business licenses. However, depending on the type of business which you are operating the state may require you to acquire a license or a permit to operate. These usually have a small administrative fee attached to them. In the case that you do require a permit or a license it is mandatory to acquire them in order to operate legally.
Make Sure You Meet The Business Employer Requirements
These requirements will vary from business to business and will also depend upon whether your company has employees or not. It is recommended to consult a business lawyer if you are unsure about which state requirements you need to meet as this varies based on your business. You may be required or highly recommended to take out certain forms of business insurance including: general liability insurance, workers compensation insurance and business property insurance. These forms of insurance can protect you from lawsuits as well as an unforeseen event which could compromise your business.
Get A Business Bank Account
This is the best way to separate your personal finances from your business finances. As previously mentioned it is also the first step toward building business credit which is incredibly valuable for your business. You can also use your business bank account to start a business credit card which you can use for your business expenses as well as for developing your business’s credit score.
Included in this article are many valuable pieces of advice for how to best start a small business in Texas. While every business is different there are also certain commonalities which every business shares and this advice can help your business succeed. An LLC, good business credit and compliance with state laws will aid your business tremendously put your business on the path to success.