Many people consider going into business for themselves at one point or another. Far less actually go through by making the leap into self-employment. If you’re one of the lucky few who is chasing a lifelong dream, congratulations! If you are looking for information about how to start a self employed business in Texas, we have some helpful tips for you.
The best way to start a self employed business in Texas is to start with a business plan. This is important for several reasons. When starting out on your own, it’s a good idea to shake your great ideas out of your head and put pen to paper. A business plan can help you get organized and build a roadmap for future success. This is a crucial planning element that may also be a necessity of your plan on obtaining a loan from a bank to help start your business.
Step two to start a self employed business in Texas is to determine which entity type makes the most sense. For those planning on keeping the business solo, the best options are probably a sole proprietorship or a single-member LLC.
A Sole Proprietorship is one choice for an individual entrepreneur and is often the least expensive and simplest to get started. With a sole proprietorship, the owner takes on responsibility for all actions of the company, including the debts. In legal terms, this is known as unlimited liability, and can be a big downside if the business is sued. If that happens, the owner’s personal assets may be at risk. For tax purposes, this type of entity may face steeper taxes than other types as the owner must pay self-employment tax on all profits earned.
Many people looking to start a self employed business in Texas go the Limited Liability Company (LLC) route. This structure gives the owner liability protection as a corporation, though the ease of operation mirrors that of a sole proprietorship. It also provides the greatest tax flexibility of any business structure as income can be taxed as a pass-through entity. In Texas, you need to file a Certificate of Formation for your LLC with the Secretary of State.
You may need to file an Assumed Name Certificate (also known as a Doing Business As or DBA) if you are going to use a name other than your full first and last name. If you simply use your name, no filing is required. If you will be operating under a different name, like “John Doe’s Consulting,” you’ll need to file a DBA with the County Clerk’s office based where your business will be located. If you have chosen the LLC structure outlined above, you will be asked to pick a name when you file for the entity.
While you are not required to get an EIN if you are a sole proprietorship or single-member LLC without employees, it can still be a good idea. If you do not file for an EIN, you will use your social security number (SSN). Some people feel more secure not using their own SSN, as it opens up additional avenues for identity theft. Also, if you plan on expanding your business and bringing on full-time employees in the future, you will need an EIN. Some prefer to set one up ahead of time.
To start a self employed business in Texas, you may need certain licenses and permits. Which are required will depend on the activities you intend on doing with your business as well as the location of your business. While the state of Texas doesn’t require a general business license, some cities may require this to operate. Certain products and services may require a Sales Tax Permit that needs to be registered with the Texas Comptroller. If you will be providing services that require professional licensing, you’ll need to be sure to obtain those as well.
Amid all the excitement that you’re going to start a self employed business in Texas, it can be easy to let things like health insurance fall between the cracks. Finding health insurance as a self employed person can be tricky, but not impossible. We’re here to help!
Decent offers several different health plans geared towards those who have a self employed business in Texas. If you’re young and healthy and just need coverage in case something bad happens, you’ll love our Pathfinder Bronze Plan. Members of this plan enjoy the lowest premiums in Austin. If you expect to use your insurance from time to time and would like to enjoy a $0 medical deductible, the Lonestar Bronze Plan may be right for you. If you manage medical conditions or prescriptions or if you have a family, take a look at our Trailblazer Silver Plan. This one has manageable copays for just about everything.
People who have a self employed business in Texas love our plans because they are affordable, comprehensive, and built around a direct primary care (DPC) model. With our plans, you enjoy free access to your primary care physician as often as you need. We offer virtual versions for each of our plans, so you can also check in with your doctor via virtual visits, email, and text.
Ready to find the perfect plan for your new self employed business in Texas? Awesome! Get a free quote here.