Why Texas Is Booming as a Business Hub and How You Can Start a Business


Why Texas Is Booming as a Business Hub and How You Can Start a Business

Table of Contents

If you’re thinking about starting a business, there are a lot of logistics to consider. You’ll need to choose what you’ll do for business, how you’ll finance it and whether or not you’ll hire people. But, something many small business owners forget to consider is where to start your business. 

Starting a business in Texas can offer you a number of benefits over starting your business in other states. Starting a business in Texas means you’ll be connected to a network and be operating in a favorable regulatory environment, among other benefits. 

Incfile | Start a Business Checklist

Why Is Texas the Best Place to Start a Business?

When you’re considering starting a business in Texas, knowing the benefits the state has to offer to small businesses can help you know how your business will be supported.

Here’s how starting a business in Texas can benefit small business owners:

  • Simple regulations: Texas keeps its laws and regulations easy to navigate. The simple laws make it easy to file your own paperwork without the help of a third party. 
  • Low tax burden: Texans don’t pay tax on corporate or individual income, which can lower your overall tax bill. Texas also doesn’t have state property taxes, which can make tax time a little less painful. 
  • Open to innovation and tech: With its business-friendly nature, Texas has attracted many large corporations and businesses to the state. Those interested in riding the coattails of those large businesses follow. That brings lots of tech innovators and startup entrepreneurs to Texas. 
  • Supportive business community: With so many small businesses already part of the state, you’re automatically joining a network when you start your business. There are also a wide variety of startup communities and business networks where you can find mentors and fellow business owners to ask questions and get guidance from.
  • Venture capital opportunities: Venture capitalists are taking notice of Texas and focusing their efforts on funding entrepreneurs in the state. LiveOak Venture Partners and Silverton Partners are two firms that have recently dedicated funds for Texas businesses.

Compared to other states, Texas gets a B for overall business friendliness, according to Thumbtack. That includes an A ranking for tax code, regulations, employment and licensing. 

texas business rankings


Top Texas Business Industries

With business booming, it can be helpful to know what industries are growing and are poised for growth. These are the top high-growth industries in Texas. This list was determined by the Texas Workforce Commission (TWC) and covers high-wage, high-demand occupations.

  • Construction
  • Manufacturing
  • Agriculture and Forestry
  • Healthcare and Social Assistance
  • Educational Services
  • Transportation and Warehousing
  • Mining, Quarrying and Oil & Gas Extraction
  • Utilities
  • Wholesale Trade
  • Retail Trade
  • Finance and Insurance
  • Professional, Scientific and Technical Services
  • Accommodation and Food Services

How to Start a Business in Texas

While Texas is a very business-friendly state, it still requires that you follow a process to start your business. Luckily, the steps are few, and the cost for you will either be free or a very small fee. 

Create a Business Plan

If you’re starting a business, it’s critical that you take steps before making the leap to have a plan. While starting a business in Texas is simple, that doesn’t mean operating a successful, profitable business is easy. 

Your business plan will be a blueprint for how your company will run and will help you to get organized before you start investing your money or someone else’s. Your business plan should include:

  • Business mission statement
  • Research on who and where your ideal customer is
  • How you plan to market to your ideal customer
  • Goals for your business
  • Financing considerations
  • Competitive research and how it will guide your decision-making

Your business plan is a great tool to guide your own decisions, but it will also be something you submit to potential financial backers or lenders. 

Choose Your Business Entity and Name

Once you have a business plan, it’s time to get to know your business a little better. You’ll need a business name and a business entity to get started.

In Texas, you must choose a business name that’s not already in use. You want your business name to be unique, searchable and a good fit for your brand and product or service. To check if your business name is available and not already in use, you’ll perform a search through the SOSDirect. Each search costs $1. You can also use Incfile's free Business Name Search tool.

If the name you chose and searched is not already in use, then you can register your business under that name. You can reserve the name on the SOSDirect site and then continue the process of registering your business entity. 

As well, you’ll want to choose the right business entity for your needs. The most common choices include:

  • Sole proprietorship
  • LLC
  • Partnership
  • Corporation

If you’re planning to do business as a sole proprietorship or a general partnership, you don’t need a business name as you’ll do business under your own name. 

Register Your Business (If You Need To)

Depending on which type of business you choose for yourself, you may need to register that business with the Texas Secretary of State. Here’s a breakdown:

Business Type

Registration Required?



Sole proprietorship



You don’t need to register a sole proprietorship. 



To form an LLC, you’ll need to file a Certificate of Formation



You don’t need to register a general partnership. 



If you choose this type of business, you’ll need to file a Registration of Limited Liability Partnership.

$200 per partner


Any type of corporation must file a Certificate of Formation with the Secretary of State. 


Get Your Business Finances in Order

The next step in starting your business is to get your finances in order. The first thing you’ll want to do is create a business bank account and take out a business credit card. Having separate bank accounts and credit cards for your business and personal will make filing taxes much simpler at the end of the year.

This is also the time that you can start thinking about what financial resources you need. You can take out a loan, apply for funding from an investor or invest some of your own money into your business to help it get started. Some funding resources recommended for Texas include:

Get Your EIN

An EIN is like a Social Security number for your business. You can apply for your EIN for free on the IRS website. Your EIN will make it easier to grow your business in the future, apply for funding and pay your taxes. 

Consider Business Insurance

In the state of Texas, businesses are not required to carry business insurance. But, depending on your type of business, it might be beneficial. Insurance can help pay for property damage, loss of business or physical injury. Understanding the risk factors facing your business will help you to choose the right business insurance

Register for Licenses or Permits That Are Applicable

Texas doesn’t require businesses to get a general business license. But, some types of businesses do need a license or permit. For example, if you’re opening a business as a beautician, you’ll need a license. The Texas government put together a guide that includes information about permitting broken down by business types to help you figure out what your business might need.

If you’re ready to get started as a new business in Texas, all you have to do is follow our Start a Business Checklist and keep believing in yourself and your skills. Texas is a business-friendly state where you’ll find other business owners willing to be your mentor and tons of groups catering to small business owners looking to grow and strengthen their small businesses.

Want to Know All the Steps to Start Your Biz? Download Our Free Checklist.

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