Tool Kit to Start or Move Your Business

Houston has always supported entrepreneurial endeavors. Start-up and existing companies seeking to cast their nets in the region’s economic waters will find an abundance of organizations to offer information and assistance, including the Greater Houston Partnership, the primary advocate for regional business.

Checklist for starting a new business

List the reasons for starting a new business. Identify the niche the business will fill.
What will be the services or products?
Is the idea practical?
Will it fill a need?
What is the competition?
What advantages will the business offer over existing companies? Will there be a demand for the business?

Pre-business checklist:

What skills and experience do you bring to the business?
What will be the legal structure of the business?
How will the company’s business records be maintained?
What insurance will the company need?
What equipment or supplies will be needed?
How will you be compensated?
What are your resources?
What financing is needed?
Where will the business be located?
What will be the name of the business?

Write a business plan

Keep all plans in writing and ensure they are updated as necessary to meet future financing and growth needs.

Hone the business plan

Define long- and short-range goals and objectives. Write a detailed budget (including an advertising and marketing plan) with profit and loss projections covering the first and second year. Often, business owners will write low financial plans: one that outlines expected growth and one that outlines the worst-case scenario.

Further analyze the relevant market

Check licensing requirements and zoning regulations and assess the type of location needed for the business. Houstonians should contact the One Stop Business Center to receive all of the regulatory information and documentation on starting a business in Texas.

Hire a team of professionals

Select a banker, accountant, attorney and an insurance agent. Discuss with each the business venture. Money spent for their time early on may save thousands of dollars later.

Decide what type of business to operate

Sole proprietorship, limited partnership or corporation.

Capital

Outline capital requirements (beyond the company’s means) as noted in the company’s projections. Arrange appointments with financial entities to acquire this financing. One goal might be to set aside enough operating capital to cover the worst-case scenario projection for one to two years.

Documentation

File the city, county, state and federal documentation to register the business legally. The U.S. Small Business Administration and the Texas Secretary of State’s office can supply information on starting a business, loans, grants and incentives. The following may be needed or considered:

Work certificate or license from the state – the business name may need state registration
Sales tax number
Separate business account
Withholding income and Social Security taxes, if the business has employees
Complying with laws covering employee health, safety and minimum wage, if employees
Be aware of city zoning or deed restrictions, if home based
Restrictions on certain goods, if home-based business, most states outline outlaw home production of certain goods.

Outline of a business plan that should serve the defined purposes:

Table of contents
Executive summary
A. What is the organization?
B. What does the organization do?
C. What are the expected financial gains?
Introduction
A. Product or services provided
B. Age, size and past performance
Environmental analysis (current business conditions?)
Competitve analysis
A. National, regional and local
B. Size
C. Strengths and weaknesses
Market analysis
A. Geological area
B. Potential customers (Number of individuals or firms, Buying capacity, Need for product or service)
C. Competitive position (Maximizing advantages, Overcoming disadvantages)
Marketing strategy
A. Target market
B. Marketing philosophy (Marketing organizations, Advertising, sales promotion and public relations, Product price and sales terms, Production capacity, Distribution)
Operations
A. Plant or shop capacity
B. Production scheduling
C. Cost and inventory controls
D. Personnel requirements (Selection, Training, Evaluation)
Management plan
A. Organization
B. Key managers and functions
Financial Data
A. General assumptions
B. History
C. Key ratios
D. Income statements (projected) – specific assumptions
E. Balance
F. Cash flow forecasts – specific assumptions
Exhibit (Each referenced in body of the plan)

Tax Overview for the City of Houston

Personal Income Tax None
Corporate Income/Franchise Tax $2.50 per $1,000 taxable capital or 4.5 percent of earned surplus, whichever is greater
Property Tax Per $100 Valuation
State of Texas -- none
(Note: Rates vary Outside City) City of Houston -- .0655
Harris County -- $0.64627
Houston Independent School District -- $1.58
Houston Community College -- $0.08133
Total Taxes -- $2.96260
Unemployment Insurance 2.7 percent general entry rate, charged on first $9,000 in earnings, reassessed after sic quarters and charged at own experience rate
Sales and Use Tax State of Texas – 6.2555 percent
Harris County – none
City of Houston 1.0 percent
Workers Compensation not required, rates no longer set by state authorities
Licenses and Permits Varies by industries and regulating agency
Certificate of Authority $750, required to do business in Texas for partnerships and corporations organized in other states
DBA (Doing Business As) $11 in Harris county, required if not incorporated or if doing business under a name other than that in which business incorporated