So many of us have an idea for our own business. Everyone wants the kind of autonomy and freedom entrepreneurship can bring. But the idea can be a little intimidating—how do you even get started?
Southside has put together a quick guide on the easy steps Texans can take to start their entrepreneurial journey. If you’ve got big dreams for a small business in Texas, it’s time to get started!
Get a game plan: A business plan is the first and most important step on your journey to becoming a small business owner. It’s imperative in order to secure funding, manage cash flow and track growth. A well-crafted business plan includes a unique selling proposition that explains your mission; an articulated target market and marketing strategy; and growth milestones of where you want to be at regular intervals. You can find many templates and examples online.
Structure your business: There are many ways to form your business in Texas, each with its own pluses and minuses. If you are unsure which option is best for you, consult an accountant.
- LLC (Limited Liability Company): LLCs are popular because they provide the protection of a corporation with less administrative hassles and paperwork. They also offer more flexibility when it comes to taxes.
- S Corporation: This formal structure allows for the inclusion of up to 100 shareholders, a board of directors and corporate officers. However, there is no corporate taxation—all profit and loss goes directly through the shareholders’ personal tax returns.
- C Corporation: These are organized similarly to an S Corporation, but there is no limit to the number of shareholders. Both the business and the shareholders are required to pay taxes on the profits (double taxation).
- Sole Proprietorship: If you are operating without partners and haven’t registered a formal business structure, you are automatically classified as a sole proprietor. There are significant liability risks, but it allows you to not file formation documents.
Obtain permits and licenses: Depending on the nature of your business, you might need specific licenses and permits to operate in Texas and to make sure your tax obligations are met. Hire an accountant and attorney to help navigate the potentially complicated federal, state and local guidelines.
Build a financial foundation: Launching a new business comes with many new challenges, including how to keep your personal and business finances separate. You should never run your business out of your personal bank account. Many Texas-based banks such as Southside offer great perks and incentives to small businesses as well as flexible account options. You can have the convenience and technology of a bigger bank while also enjoying the attentive, personalized service you might need.
Get funded: There are more options than ever when it comes to finding financing. Angel investors and crowdfunding are just two of the more creative alternatives. But don’t overlook a loan from your bank! Keeping your finances under one roof with a financial institution that already knows you offers many advantages.
Build a brand and a marketing strategy: Your logo and website say a lot about you. Consult a professional agency to help you create a memorable look that differentiates your business. Identify your target market and pick one or two strategies to engage them. Don’t try to do too much at first. Concentrate on crafting a strong message and delivering it consistently.
The bottom line: If you’re ready to make your small business dream a reality, carefully consider all the factors we’ve identified, then fearlessly pursue your goals.