How to Start a Business in Texas in 2025 with 12 Easy Steps

Starting a business in Texas is one of the smartest moves you can make in 2025. With low taxes, booming cities, and a thriving small business community, the Lone Star State is built for entrepreneurs. 

In this guide, I’ll walk you through each step of how to start a business in Texas. By the end, you will have all the necessary knowledge to set up a business in Texas and run it profitably.

Let’s begin.

Why Start a Business in Texas?

If you’re looking for a state that supports entrepreneurs, Texas checks every box. There’s no personal income tax, and business registration is straightforward. Plus, cities like Austin, Dallas, and Houston are magnets for innovation, talent, and funding.

Texas is home to over 3.1 million small businesses, which is nearly 99.8% of all businesses in the state. Whether you're launching a tech startup, online store, or local service, you’ll find plenty of opportunity in Texas.

The cost of doing business is also lower compared to states like California or New York. So, Texas is considered to be a budget-friendly place to run a business.

Here’s a quick snapshot of what makes Texas so business-friendly:

Bottom line? Texas wants your business to succeed.

Step-by-Step Guide to Start a Business in Texas

Let’s get into the action. These are the 12 key steps I recommend to anyone starting a business in Texas.

Step 1: Find & Validate Your Business Idea

Every great business starts with a simple idea, but not every idea is worth pursuing. Before you invest your time and money, validate that people in Texas actually want what you're offering.

Start by researching competitors in the city or industry. You can use Google Trends to check regional interest or run a survey using platforms like Typeform. You can also test a basic version of your product (an MVP) to get real feedback from potential customers.

✅ Expert Tip: Check Facebook Marketplace or local Reddit threads to see what’s trending in your niche.

Related Read: How to Use Reddit

Step 2: Create a Solid Business Plan

A business plan can act like a blueprint for success. It helps you map out your goals, understand your market, and estimate startup costs. In Texas, this is especially helpful if you’re applying for funding or working with a local SBDC advisor.

Here’s what your plan should cover:

If you’re not sure where to start, you can take help from SBA’s business guide. The more detailed your plan, the smoother the road ahead.

Related Read: How to Write a Business Plan with ChatGPT

Step 3: Choose a Business Structure & Register It

Once you finalize your business plan, you need to structure your business legally. Most small businesses in Texas choose either a sole proprietorship, LLC, or corporation. I usually recommend an LLC because it offers personal liability protection and is easy to manage.

Once you've chosen a structure, register your business name with the Texas Secretary of State. For LLCs, you’ll need to file Form 205 and pay a one-time filing fee.

Here’s a quick comparison of different business structures:

Step 4: Register for Taxes & Get Your EIN

To legally operate your business and hire employees, you’ll need an Employer Identification Number (EIN). It’s like a Social Security Number for your business, and yes, it’s totally free from the IRS.

You can apply online through the IRS EIN portal. Once you have your EIN, you’ll also need to register for state-level taxes with the Texas Comptroller’s office.

Depending on your business type, you may need to collect:

✅ Expert Tip: You can use the Texas Taxpayer Portal to file returns, register for tax types, and stay compliant.

Step 5: Obtain Licenses & Permits

Texas doesn’t have a general statewide business license, but that doesn’t mean you're off the hook. Most businesses need local, county, or industry-specific permits to operate legally.

For example:

Your best bet? Visit the website of the Texas Business Permit Office and use their search tool based on your business type and location. You should also check with your city or county clerk’s office to confirm zoning laws and local requirements.

Step 6: Open a Business Bank Account & Set Up Finances

One of the biggest mistakes I see new business owners make is mixing personal and business finances. It leads to messy books, tax confusion, and even legal risks, especially if you're running an LLC or corporation.

So this step is mandatory. Open a separate business checking account. Most Texas-based banks offer small business accounts with low or no fees. You’ll also want to set up accounting software to track your income and expenses.

Here are some suggested tools from my side that you can consider using for your business:

✅ Expert Tip: Some banks in Texas offer LLC-specific perks, like no minimum balance or free transfers. You should ask before you sign up.

Step 7: Secure Funding for Your Business

Unless you’re bootstrapping, you’ll likely need funding to get things off the ground. In Texas, you’ve got a few solid options from local grants to national small business loans.

Start with your startup cost estimate (which you created in Step 2). Then, decide how much you need and where it’s going, like inventory, tools, marketing, etc.

Here are common funding sources in Texas:

✅ Expert Tip: Look into the Texas Product Development and Small Business Incubator Fund (PDSBI) for low-interest loans if you’re building something innovative.

Step 8: Get Business Insurance (Recommended but Not Mandatory)

Texas doesn’t require most small businesses to carry insurance. But going without it? That’s a gamble I wouldn’t recommend.

Just one lawsuit, accident, or equipment failure could wipe you out. The good news? Business insurance is affordable and easy to set up.

Start with these core types of insurance:

Step 9: Hire Employees or Work with Contractors

If you’re planning to grow, you’ll need help. It can be a part-time team or remote freelancers. Texas is an at-will employment state, which gives you flexibility. But it also means you need to follow the rules closely.

Here’s what you can do if you’re hiring employees:

Or, if you’re hiring freelancers:

✅ Expert Tip: You can use platforms like Gusto or ADP to automate your payroll, tax filings, and compliance from Day 1.

Step 10: Create a Website for Your Business

In 2025, your website is your storefront, even if you’re running a local brick-and-mortar store. It builds credibility, helps you get found on Google, and gives potential customers a place to learn about and trust you.

You don’t need to be a coder to create a great website. No-code website builders like Dorik, Wix, or Squarespace make it super easy with drag-and-drop editors and built-in SEO tools.

Here’s what every small business website in Texas should include:

You can build a website by yourself without any technical knowledge using Dorik AI website builder. It can turn your text command into a fully functioning business website within minutes.

Related Read: How to Create a Business Website

Dorik is the most flexible platform for creating a business website, with multiple budget-friendly pricing plans. It also offers built-in tools for SEO to make your website visible faster and supports many third-party integrations to help with marketing and sales.

✅ Expert Tip: Get a .com domain and secure it with SSL. Google loves secure, fast-loading sites.

Step 11: Market & Grow Your Business

You’ve set up everything. Now it’s time to get customers. The key is to focus on channels that your audience actually uses instead of wasting money on every platform.

For local businesses:

For online or product-based businesses:

Marketing is where many new Texas businesses scale or stall. You don’t need a massive budget, just consistency, and a clear message.

Step 12: Launch Your Business!

This is it. The moment you’ve been working toward. Your business is registered, your website is live, and your marketing strategy and marketing engine are ready. Now, it’s time to go live and start building momentum.

Whether you host a soft launch, do a countdown on social media, or throw a small local event, make it feel like a real moment. It helps you attract attention and creates a sense of urgency for customers to act.

How Much Does It Cost to Start a Business in Texas?

Let’s break it down. Your startup costs will vary depending on the business type, location, and industry. But here’s an estimate for most small businesses in Texas:

The following table will give you a cost estimation related to Registration & Licensing of your business

The following table will give you a cost estimation related to Operational Costs of your business

These costs are just an average estimation based on the economic reports of other businesses in Texas. It can change significantly based on the nature of your business.

FAQs

How long does it take to start a business in Texas?

If you're forming an LLC online, the Texas Secretary of State usually processes it within 3 to 5 business days. If you mail it in, it may take 2–3 weeks. Other steps, like getting an EIN or opening a bank account, can be done on the same day.

Do I need a business license in Texas?

There’s no general statewide license in Texas. But many cities, counties, and industries require specific licenses or permits. Always check with your local government and use the Texas Business Licenses & Permits guide for details.

What’s the cheapest way to start a business in Texas?

The most affordable route is starting a sole proprietorship with a DBA (Doing Business As) name, which can cost as little as $25–$40. You can skip the LLC fees, but you won’t get liability protection. For online service-based businesses, this is a solid low-cost starting point.

Is Texas a good place to start a business?

Absolutely. Texas has no personal income tax, a business-friendly environment, and ranks high for economic growth and entrepreneurial support. Whether you're starting in Austin, Houston, Dallas, or a smaller town, the opportunities are massive.

Conclusion: Ready to Start Your Texas Business?

Starting a business in Texas isn’t just doable — it’s one of the smartest moves you can make in 2025. With low taxes, strong infrastructure, and a massive market, Texas offers the freedom and support you need to succeed.

Whether you’re launching an online store, a local service, or your dream restaurant, follow these 12 steps, stay compliant, and take consistent action.

You’ve got the roadmap. Now it’s time to build something real.

If you need a business website without breaking the bank, try Dorik now and create a website within minutes.