They say that everything is bigger in Texas, but sometimes, smaller is better. That's certainly the case for small businesses in the Lonestar State, where they're having a major impact on Texas' economy. As of 2020, there were 2.8 million small businesses operating in the state – 99.8 percent of all businesses.
Texas is a business-friendly state across a wide variety of industries and demographics. Minority business owners now total more than 700,000, and those numbers are on the rise.
If you've got a big idea and you're looking for a big place to start up your business, Texas might be the right choice for you. And if you want to start your business quickly, we've got all the tips you need to start your journey to entrepreneurship right away.
Can I Start a Business in Texas in 24 Hours?
When you've got a great idea and the passion to pull it off, you don't want to wait to get started. If you're wondering how fast you can start your Texas business, we've got good news (with a few caveats). Yes, you can start a business in Texas in 24 hours. There are a few things that make that easier, though. If you're a sole proprietor and a Texas resident, you can begin operating your business immediately. That can be a great way to get your business off the ground, but there are some things to keep in mind:
Working as a sole proprietor means you assume full liability (i.e., no legal protections) for your business.
That also means that in the event of legal actions, your personal assets may be at risk.
If you don't currently reside in Texas, you'll need an official street address to operate within the state (more on that to come).
If you're a sole proprietor, the business operates under your name. If you want to use a different name, you'll need to file for a DBA (Doing Business As).
If that doesn't sound like you, no need to worry. You can still start a Texas business quickly and easily, and we'll tell you how.
Starting a Business in Texas — How Long Does It Actually Take?
Twenty-four hours is a crunch for most business owners, and while it's possible, we must say that it might not always be realistic. However, you can get your Texas business up and running in less than a week if you following the steps we've outlined below.
Currently, the Texas Secretary of State says that LLC business formation is delayed in certain circumstances. If you file via fax or mail without paying a fee for expedited processing, you can expect the formation to be approved within 22–25 business days. However, if you file your LLC online, you can receive your approval in as little as four days.
The rest of the business formation process is at least partially reliant on you. Many of the steps can be done in a matter of hours or days, and you can work through most of them at the same time to maximize efficiency. Here's how:
Starting a Business in Texas Checklist
Step 1: Decide on Your Business Entity
While you can start your business as a sole proprietor in less than 24 hours, we don't recommend this as a best practice. Sole proprietorships leave you vulnerable to litigation and other legal action and could compromise your personal finances. Instead, the quickest way to form a legal business entity in Texas is to file an LLC. An LLC (limited liability company) offers a shield between your personal and professional assets and gives you protections that operating solo can't.
To form a Texas LLC, you'll need to file your Certificate of Formation with the Texas Secretary of State. There are different forms for Texas residents versus out-of-state residents. In-state business owners will need to pay the $300 state filing fee, while out-of-state owners are charged $750.
Step 2: Name Your Business
Paperwork and fees aren't very exciting, but they are a necessary step in making sure your business is legal and protected. However, once that's done, you can move onto something a little more fun — naming your business. Here are some tips to guide you in naming your Texas business:
Be sure it isn't too similar to the names of your competitors.
Avoid using made-up words, complicated acronyms or gibberish.
Step 3: Designate a Texas Street Address
If you're a Texas resident operating from home, this step is fairly easy. However, there are reasons you may not want to or be able to use your own address. If you are an out-of-state resident, for instance, or if you simply don't want to have your private home address associated with your business, a virtual business address may be the best choice for you. A virtual address allows you to receive and review a digitized version of your mail from anywhere, so you never miss a moment.
Step 4: Name a Registered Agent
A Registered Agent is the person responsible for receiving your business's important legal documents. You'll name your Registered Agent when you file your LLC. While you can designate yourself as your business's Registered Agent, it's not usually recommended. The Registered Agent must be available in your state of operation to receive documents at all times, so if you live somewhere else or you travel frequently, it's best to have someone else take on the role. Great news: when you file your LLC through Incfile, you'll get our Registered Agent service free for the first year.
Step 5: Secure an EIN
An EIN is your Employer Identification Number, and it's critical you have one in order to pay taxes, manage payroll or secure business banking and financing. You can get your EIN through the IRS, or you can let Incfile handle it for you. Either way, you can have your EIN in just a couple of business days and be ready to roll.
How Do I Start a Small Business from Home in Texas?
Starting a home-based business in Texas follows pretty much the same process outlined above. Keep in mind that if you don't want your home address to be made public as your business location, you'll need to look at other options, including:
Signing up for a virtual business address
Getting a P.O. Box through the U.S. Postal Service
Getting a mailbox through the UPS Store
Having mail sent to a coworking space
One other thing to keep in mind when starting a home business in Texas: you'll need to do careful research into local zoning laws to ensure you can legally operate your business out of your home, and make sure you have the appropriate business licenses to do so.
Benefits of Starting a Business in Texas
Texas is considered a business-friendly state, with numerous options for funding and small business incentives. As businesses leave other states like California in record numbers, Texas business formations are on the rise.
In Austin, especially, tech companies and startups have found a haven for their small businesses, and they continue to flock there in record numbers.
Aside from being the capital city, Austin is also a hub of culture, music and innovation, with a high quality of life.
If you're ready to launch your big business idea in a state where bigger is always better, Texas may be the right choice for you. And if you're ready to start quickly, Incfile is here to help with a $0 + state fee Texas LLC. Our business formation services can you get up and running in the shortest time possible. It might take a little longer than 24 hours, but we can tell you that the wait will be worth it.
Wendi is a freelance writer based in Indianapolis, IN, with over a decade of experience writing for a variety of industries from healthcare to manufacturing to nonprofit. When she isn't working on solutions for her clients, she can be found spending time with her kids and husband, working in the garden or doing more writing (of the fiction variety).