A Step-by-Step Guide to Starting a Business in Texas With No Money

Texas has a favorable tax and regulatory environment for businesses, making it easy for you to start a business in Texas with no money.

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Updated May 13, 2024
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They say everything is bigger and better in Texas, which is true regarding the local economy. According to the Texas Economic Development Corporation, the Lone Star State’s $1.9 trillion economy is larger than many countries, including Brazil, Russia, and South Korea. Texas’ favorable business climate has led major corporations like Amazon, Tesla, Hewlett-Packard, and Oracle to relocate to major cities like Austin and Houston.

So if you’re looking to start a business but have no money, Texas is a good place to consider. You’d save on several expenses because Texas has no income tax, doesn’t require business licenses, and generally doesn’t require business insurance.

Let’s look further into why Texas is a good place for businesses and how to create a business in Texas with little to no money.

In this article

Key takeaways

  • Texas has no personal or corporate state income tax.
  • Texas doesn’t require business licenses and generally doesn’t require business insurance.
  • Sole proprietorships and partnerships in Texas are required to register their business name.
  • Corporations and LLCs need to file a certificate of formation with the Texas Secretary of State.

How to start a business in Texas with no money

Texas offers many incentives for businesses, which may be of particular interest if you are looking to start a business with little to no money. Between January 2021 and January 2022, the Lone Star State ranked third among states in the number of new business applications filed.

Texas is a popular place for new businesses primarily because of the tax advantages it offers:

  • Texas has no personal or corporate state income tax.
  • Texas offers a favorable regulatory environment.
  • Texas has a large pool of potential employees.
  • The cost of doing business in Texas is below the national average.
  • The state offers business incentive programs, particularly in manufacturing, agriculture, and healthcare.

If you are ready to start a business in Texas, here are the steps you’ll need to take to get your business off the ground:

1. Decide on a business idea

Deciding on what business you should start is the first step and one of the most important when you start a business in Texas, especially if you don’t have the funds to start. Your business idea should be something you’re passionate about that doesn’t require a lot of overhead costs like office space, inventory, and employees.

To ensure your business will be profitable, you’ll need to do a little market research into the demand for the business in the area you are planning on opening it, as well as your possible competitors. Some questions to consider include:

  • Is there a need for your product or service in the community?
  • Who are your ideal customers, and what are their spending habits?
  • Who are your competitors?

2. Create a business plan

While you may be starting your business in Texas without much money, you may need to seek investors down the road. Potential investors will want to see a business plan that outlines the details of your business and how it will operate and grow.

Having a business plan will also be helpful for you to map out your startup costs, target market, marketing strategy, the products and services you will offer, how many employees you’ll need to hire, and short- and long-term goals.

The U.S. Small Business Administration (SBA) offers several templates to help you build a business plan, so you don’t have to do it from scratch.

3. Decide on a business structure

There are different ways that you can structure the legal status of your business. The possible business entities are:

  • Sole proprietorship: A private one-owner business
  • General partnership: A private business owned by two or more people
  • Limited liability company (LLC): A private business structure that provides owners with limited liability protection against lawsuits or debts
  • Corporation: A legal entity that is owned by its shareholders

Fortunately, the business structure you decide on won’t have too much impact on your taxes because there are no personal or corporate state income taxes in Texas. That means your business is exempt from state income taxes regardless if it is a sole proprietorship, partnership, LLC, or corporation.

Registering your private business as an LLC versus a sole proprietorship or partnership can help protect your personal assets if your business is sued. It’s usually best to talk to an accountant or attorney about what business structure you should choose.

4. Register your business

Once you’ve determined how you will structure your business, you need to register your business with the Texas state government. The Texas Comptroller of Public Accounts lets you search to see if your desired business name is available.

In Texas, sole proprietorships and general partnerships are required to register their assumed name (or doing business as [DBA] name). This must be done with the county clerk’s office in the county where the business is located or, for businesses without a physical location, all counties where the business will be conducted.

Corporations and LLCs must file a certificate of formation with the Texas Secretary of State. The filing fee is $300.

When registering your Texas business, you must also apply for an Employer Identification Number (EIN) with the Internal Revenue Service (IRS). An EIN is like the Social Security number of your business. With an EIN, you can open a business bank account, apply for business licenses, register for state taxes, hire employees, and more. Note that it can take up to two weeks before your EIN is registered by the IRS.

5. Get licenses, permits, and insurance

Depending on the type of business you plan to start in Texas with no money, you may be required to obtain certain business permits, certifications, registrations, or authorizations. The Business Permit Office within the Texas Economic Development and Tourism Office provides a handy guide that outlines what the state government requires for specific businesses. Note that cities and counties may have additional permitting requirements.

Sole proprietors, partnerships, corporations, and LLCs located and operating in Texas must obtain a Texas sales and use tax permit if they:

  • Sell tangible personal property in Texas
  • Lease or rent tangible personal property
  • Sell taxable services in Texas

While business insurance is not required in Texas, it is a good thing to have if you want to start a business there, even if you have little to no money. Commercial liability insurance can protect you and your business if you get sued. Texas also doesn’t require most businesses to carry workers’ compensation unless the business has contracts with the government.

6. Start marketing your business

You should start reaching out to potential customers and marketing your business before you even open your doors. There are several cheap ways to market your new business, like social media promotions, fliers, search engine optimization (SEO), and email marketing.

Traditional advertising on TV, radio, and in local print publications can be very expensive, so looking into creative alternatives will be best if you are trying to save money. Word of mouth is one of the best ways to create attention for your business. You can create a referral program or encourage your customers to leave reviews online to help spread the word.

Besides developing your brand identity, like a logo that people will remember, you should determine your business value proposition. A value proposition defines how your business benefits potential customers.

Ways to find funding for your business

Since you are starting a Texas business with no money, you will need ways to fund your business needs, like inventory, equipment, and employees. Here are a few ways to find funding for your business:

  • Investors: Your investors can be friends and family members who provide the seed money to help you get your business off the ground. You could also approach seasoned investors and offer them an equity stake in your company in exchange for funding.
  • SBA loan: Small business owners in Texas may be able to get an SBA loan to help with their business expenses. The SBA offers everything from a microloan of about $50,000 to a 7(a) loan of $5 million. The SBA has six offices in Texas where you can get more information or apply for a loan.
  • Conventional bank loans: Banks, credit unions, and other lenders may offer business loans. However, these tend to be harder to get than SBA loans, especially if you are starting your business without funds.
  • Crowdfunding: You may be able to raise funds by putting your business idea out on crowdfunding platforms like GoFundMe and Kickstarter.
  • Community Development Financial Institutions Fund (CDFI Fund): Texas has several nonprofit lenders, such as PeopleFund, BCL of Texas, and LiftFund, which provide business loans for disadvantaged businesses and entrepreneurs. The loans provided typically have lower interest rates and more favorable terms than conventional bank loans.


How much does it cost to start a small business in Texas?

It doesn’t cost very much to start a small business in Texas. Registering your business will cost between $25 and $300, depending on your chosen business structure. However, your costs could be higher if you need to lease space for your business or have to purchase inventory and equipment.

How much does a business license cost in Texas?

It won’t cost you anything for a business license in Texas because the state doesn’t require you to have a business license. However, you will have to pay other fees for registering your business and for any permits you may need. For example, LLCs and corporations are required to file a certification of formation, which costs $300.

What small business can I start with no money?

The best small business that you can start with no money is one that doesn’t require a lot of overhead costs like office space, inventory, and employees. The key is to find out how to make money without having to spend a lot of money. Some options for small businesses you can start without funds include virtual assistant, social media consultant, graphic designer, SEO specialist, or freelance writer or editor.

Bottom line

Texas is a great state to start a business if you have no money. The state has no personal or corporate state income tax and a favorable regulatory environment. You also don’t need to pay for a business license in Texas, and there is no state requirement that businesses carry business insurance. You can minimize your costs of starting a business in Texas by choosing a business that you can do on your own in your home without the need for overhead costs of employees and rent.

You can get more information on how to start a business in Texas by consulting a professional tax consultant, accountant, or attorney.

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Danielle Letenyei

Danielle Letenyei is a professional writer living in Madison, Wisconsin. Her interests include budgeting, travel, credit cards, insurance, and creative side gigs. She hopes her work on these topics can help others navigate the intricate landscape of personal finance.