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How to Start a Construction Business in Texas

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Texans, ready to start a construction company and need some assistance? Here are expert startup instructions complete with State, City, and construction industry resource links. Come along to learn how to make money from building in the Lone Star State of Texas.

How to start a construction company state of Texas, USA

State of Texas Business Outlook

The great state of Texas is truly a great place to start your business. Because Texas boasts a booming economy and a business-friendly climate—with no corporate income tax and no personal income tax—plus has highly skilled workers, strong infrastructure, and predictable regulations.

The construction industry is growing at a robust rate of 6% annually, a faster rate than other major sectors such as real estate and healthcare, according to IBIS World studies

Major industries include petroleum and natural gas, farming, steel, banking, construction, and tourism. Texans enjoy a higher than the national average median income of $61,874 and are 29 million strong. Major metropolitan regions such as Houston, San Antonio, Corpus Christi, Dallas, Fort Worth, and Austin are all prime locations for entrepreneurs.

Explore Business Ideas

All great businesses start with good ideas.

Discover Good Business Ideas

One of the best ways to get brilliant business ideas is to review my lists of business ideas categorized for your situation such as small-town business ideas or home-based – many of which are related to the building trades.

Another way to find your next business idea is to experiment with my fun tool –  Business Idea Generator. Click the button and some concepts for product, service or side hustle businesses will be generated.

Research Your Marketplace 

All successful businesses MUST fulfill a need for paying customers to thrive.

Find out if your new business idea will solve problems that customers are willing to pay for by thoroughly researching the marketplace.

Begin by asking the following questions to study the market, competition, location, and target customers’ needs and wants.

Learn if the Market Needs & Wants Your New Product or Service

  • What problem, need or desire is being solved by your product?
  • Who are the people, or companies, that have this problem? Why do they have the problem? What are they trying to achieve?
  • How are they answering this problem now, without your new startup? What products and services are they using?
  • What are other companies offering for this need – similar or dissimilar products to your business ideas?
  • Where does your new firm fit into the marketplace?
  • What is your point of difference, competitive edge, over established companies? Why should people buy your product instead of what they are using now?

Test Your Business Idea

Now that you have researched your idea it is till to test its viability to be certain of its profitability before investing your time and money to launch your company.

As a serial entrepreneur, I have done lots of business idea testing. Some ideas passed many failed. But I am sure glad I tested thoroughly first before losing money and perhaps more importantly entrepreneur confidence.  Below are a few of the ways I test products. Get the full list of my 10 best ways to field test your business ideas here.

  • Visit Trade Shows with Your New Products
  • Ask Others About for Constructive Feedback
  • Run A Short Testing Ad Campaign
  • Stage a Focus Group Session

Develop Your Business Plan

No doubt you’ve heard the old saying of one of my favorite guys Winston Churchill, “if you don’t plan – you are planning to fail”. 

Nowhere is this truer than when starting a business.

You, like most entrepreneurs, are excited and want to start right away without taking any time for business planning – THIS is a major mistake.

Spare yourself the substantial loss of money, time, and much heartache by taking the time to write a business plan.

The importance of writing the plan is not wholly the finished document but the discoveries of missing elements in your business concept you find as you prepare your business plan.  

During the process of writing your business plan, you will uncover aspects of your business strategy that will not work. Better that you discover these weaknesses on paper – now – then adjust your business model accordingly- than to encounter these problems in the field costing time, money, and possibility your company survival.

Many first-time entrepreneurs think that the business plan must be some sort of huge financial novel that is given to the bank in the application for a business loan. While that is one type of business plan.

The more important type of business plan is one that the entrepreneur writes for themselves. This plan documents the business summary, target markets, marketing strategies.

Think of it as a map for your entrepreneurial journey. You would not set out on a long hike across unknown territory without a field guide and a detailed map.

So don’t dive into a new business and spend money, time and emotional energy without a map.

Read my review of business plan software and learn about some great free options here

My helpful resources to help you write your business plan

Business Plan Musts – For Loan Approval

Questions Winning Business Plans Must Answer

10 Critical Items Your Business Plan May be Missing

Plan Your Financials

This is the final stage where you will calculate important financial projections to determine if your business idea is profitable, the amount of capital you will need for startup costs and ongoing working capital funding.

Determine Your Pricing Structure

Begin your financial planning by determining your best pricing.  Pricing your product and service is a bit of an art science.  There are multiple ways to determine your best price, cost plus and market demand & supply.

There are different methods to calculate your prices for your new startup business based on multiple factors such as market demand, competitive prices, and costs expenses.

These are the most often used pricing strategies for small business with recommendations for which methods fit different types of businesses. 

Premium Pricing

This method is when you price your product higher than your competitors. This technique is often used at product launch to create a high-value perception in your customer’s minds.

Market Penetration Pricing

This concept is to gain buyers by offering the lowest prices on goods and services to enter a crowded marketplace. It is common for entrepreneurs to use this technique initially. If not planned and executed carefully this is the most dangerous type of pricing strategy for your bottom line and business survival.

Psychology Pricing

By utilizing the power of people’s emotions to buy is the key to success with this pricing strategy. Many consumers consider the price of a particular item a major purchasing factor.  Use this to your advantage by reducing your price a little and changing your buyer’s minds a lot. You have all seen the $199 specials, which are only $1 less than two hundred but seem to be a better bargain.

Read my full article about how to best price your products and services here.   

Calculate Your Startup Costs

Two Types of Startup Costs – Setup and Operational

First, you need to know that there are two distinct types of costs, those you will incur as you set up your company (Set up Costs or Startup Costs) and those that will continue to be expensed as you operate (Operational Costs, Expenses and Working Capital).

Set Up Costs

One time investment to open your store or launch your website includes such items as legal business formation, building renovations, and manufacturing equipment.

These are easier to calculate. You will research each item and simply add up the list for your total set up costs.

Operational Costs

Ongoing expenses to continue business operations including rent, supplies, employee salaries – and most importantly working capital. These costs are more difficult to calculate because they have many more variables. As your sales increase so will your labor and material and inventory needs.

Read my article about how to correctly calculate your startup and operational costs here.

Forecast Sales & Expenses

The next step is to forecast your sales and expenses and generate a business budget.

I have a that I say that is funny but also true.  I tell all new entrepreneurs to take their financial projections and cut their sales in half and double their expenses.

Then, if the numbers show that they will make money they should go forward to launch their business.  Certainly, simplistic, but it illustrates that most entrepreneurs overestimate their sales and underestimate their expenses to their own detriment. 

Here is the right way to create a business budget.

Define Working Capital Requirements

From one entrepreneur to another, you need to get wise about working capital, today, if you plan to keep your business doors open. Because the #1 reason for business failure is lack of working capital. Don’t become a business failure statistic.

Working capital refers to the funds that help you meet the daily expenses and needs of running your business, such as payroll or paying for software, tools and supplies.

From a business management perspective here’s all that you need to know about working capital in my article about what it is, the amount you need, how to manage it like a pro, and if you are short on working capital how to either get financing and how to reduce your working capital needs without a loan.

Fund Your Business

Now that you have a great business idea, you will need money to get started in your new venture. While there are some businesses that you can start with almost no money some are even free.

Most startups require some form of a business loan or capital investment. Now that you have written your business plan (see my how to advice in prior section), forecasted sales, expenses and working capital you know the amount of money you need to launch. Here’s how to fund your business

Startup Funding Resource List

Here are some good ways to fund your startup launch. Get my full list of 17 Proven Sources For Startup Capital

TIP: If you need to finance your small business consider top recommendation for small business startup loans – Kabbage.com. Read my review of Kabbage loans with verified customer reviews and experience

CAUTION: Surely you have heard of many businesses they got started using your credit cards as a primary form of financing. While this can be done, we recommend that you read this article and heed our warnings about financing your business startup on your credit cards.

Open Business Bank Account

In order to accept customer payments, cash, checks or credit cards, your business will require a separate bank account from your personal or family bank accounts.

Please do not make the beginner entrepreneur to run your business through your personal account. You will be making it harder on yourself since it will be tougher to manage transactions, reconcile checking accounts and prepare your tax returns.

All small business experts and the Internal Revenue Service recommend the separation of business and personal bank accounts. By opening a business account, you make this possible. Read my article about how to open your new business bank account here

Additionally, having a business bank account is an important credibility factor to make your business idea a legit company and not just a dream. Also, for corporations, LLC’s and so forth, a separate and individual bank account will be necessary.  

Depending on the bank and type of account required, several business days may be needed to get things set up, so don’t wait until the last minute to get things set up.

Set Up Accounting Systems

Whether you’re starting a sole proprietorship or an LLC, having the proper accounting setup is essential.  It is far better to have your bookkeeping established right from the start rather than find out down the road that you’ve done things wrong and now owe money to the IRS.

I learned this the hard way in one of my early ventures. Start bookkeeping with your second dollar – the first dollar you put in a frame over the door or on your desk 😊

Depending on the particular business formation type you have chosen, there may be reporting requirements for the accounting, especially payroll and taxes, that require regular and ongoing attention. Consult the IRS for your tax payment and reporting schedule.

I recommend the easy to use, but flexible enough for growing companies, software Freshbooks. From sending email invoices, accepting credit cards, and tracking expenses it simple, effective, and affordable. Check out the discount sale here.

Pick Business Location

Choosing the right location for your firm is one of the most important decisions you will make at the onset of your business launch.

Take your time and do your homework of research and planning, before committing to a lease on retail, restaurant, or office space. Study the demographics of the area and surrounding towns, your competition nearby, and much more. Here are the questions you need to ask before signing a lease:

7 Questions to Determine if Location is Good for your Business

  1. Image – Does this spot project the brand image you desire?
  2. Competition – Are neighboring businesses competition or complementary?
  3. Labor – Will you be able to find employees easily, or is it too far to commute?
  4. Growth – Is there room for future expansions?
  5. Vendors – Are vendors able to deliver here efficiently and at a reasonable cost?
  6. Security – What is the crime rate?
  7. Zoning – Is this location zoned for your type of business activity?

My related resources:

Leasing your first office? Negotiation pointers

Name Your Business & Create Your Brand

How to Name Your Business so Customers Remember Your Brand

It can be difficult to think up a catchy name for your new company. I am here to help you with my best tips for coming up with company names that are memorable:

First Make a List of Keywords

The words and phrases that your prospective customers type into internet search engines to find companies like yours.  Add other towns, states, and countries to your search to find similar firms, outside of your marketing area for inspiration.  

Don’t use another firm’s exact name, just use those names to brainstorm your own unique brand name.

  • Use market level words such as industry names (ie catering, plumbing) and see what comes up
  • Try your competitive advantage term (ie faster, cheaper, cooler) to find interesting concepts
  • Your value proposition, innovation, or special feature is a good source to build memorable names (example – Evernote – Remember Everything)
  • Outside of Your Industry – Step back and look for an interesting combination of words from outside the industry.

Naming Tips: How to Come Up with a Catchy Business Name

Then Play with Words for a Great Business Name

Take that list of words and you created using my tips above and then play around until you find that perfect new startup name.  Read about the 24 best ways to play with words to come up with your own catchy business name in my article here

Also check out my article about how to combine two names – business partners – into one super company name here

Or consider trying out a business name generator from my list of the top FREE company name generators here

Plus Review List of Business Names for Inspiration

To help inspire you I have written lists of catchy business names for lots of types of companies such as below. Check out these unique name ideas that are not taken and available!

Check out my list of construction company name ideas

Decide Your Business Legal Structure  

Your business is considered an entity or an organization in the eyes of the law and government, this means that you need to have a structure such as Sole Proprietor DBA, Corporation, LLC a limited liability company in which you run your business from.

Learn more in my guide: How to Start Your Small Business Legally – Important Legal Requirements

You will want to determine the best legal structure for your new startup business such as sole proprietorship, partnerships, corporations, or trusts.  

Some businesses should incorporate, most notably those seeking venture capital and manufacturers, and some should not such as small one-person companies, often referred to as solopreneurs and those with low capital do not deal in products or services that could be dangerous to your customers. 

Learn more about which is the best legal structure entity for your new business in my article here

Texas Startup Business Regulations

In Texas, sole proprietorships and partnerships need to register with the county clerk’s office. Here is a helpful list of Texas county clerk offices complete with links to applications and contact information. If you decide to incorporate, register with the Secretary of State’s Office (SOS).

Which is Right Business Type for Your Company?

When you’ve got the name and business type you want to start, determining the best form of business structure is the next essential step.

There are many types and variations to business structure.  Depending on which kind of business you intend to run, how the day-to-day operations will be carried out, and various other factors, a particular business structure may be of more value to you than another.

Out of the USA’s possible business structure types, here are the most common five types for profit-oriented organizations.  If you are interested in setting up a non-profit, or not-for-profit, check out my expert tips here.

Business Formation Legal Entity Types

  1. Sole Proprietor
  2. Partnership
  3. Corporation
  4. S Corporation
  5. Limited Liability Company (LLC)

Sole Proprietor

A sole proprietorship is the business formation most adopted by individuals.  It is also the form of business that carries the most liability for the owner—a single owner, personally responsible for the sole proprietorship.

Texas Requirements: File an Assumed Business Name

If you plan to do business using a name (such as a company or brand name) that is different from your personal name (your legal name), the state of Texas requires you to submit an application to register your assumed business name with the county clerk of your business headquarters.

To file your assumed business name, complete the form for Assumed Name Certificate available from the county clerk’s office and mail it to the county clerk at the address listed in the application. The filing fee is approximately $10 but may vary. Below is a link to a list of all the Texas county clerk offices.

Here is a helpful list of Texas county clerk offices complete with links to applications and contact information.

Partnership

Like the sole proprietor, this business formation simply puts a partnered proprietorship rather than a sole proprietor.  The liability is typically evenly dispersed amongst owners.

Business partnership resources:

How to find a good partner

Business partnership types – advantages & disadvantages

How to split profits in a small business partnership

Corporation

A corporation is a quite different creature from a sole proprietorship.  In the United States, a corporation is a sort of virtual entity.  A corporation takes on rights and abilities like a person – that’s why it uses the word “corp” as in the corporal body.  The difference is that it features the ability to exist perpetually, quickly transfer interests, and provide limited liability for the corporation’s shareholders (owners).

S Corporation

An S Corporation differs from a regular corporation in that it chooses to pass credits, deductions, income, and losses through to the shareholders.  These shareholders would add these to their income tax.  It enables the business to simply pass along the numbers to the owners (shareholders) and act as intermediaries.  

Read my advice about whether a corporation would be a good legal business entity for you linked below:

Business incorporation resources

Differences Between LLC and Corporations Compared (S-Corp and C-Corp)

FAQ: How are Corporations Taxed?

LLC vs Corporations: Which is Best for Your Business?

Limited Liability Company (LLC)

A popular form of business structure is the limited liability company referred to as an LLC. Each state has its regulations regarding the LLC, to clarify how it differs from the other previously mentioned business formation types, let’s start by defining the LLC.

An LLC can be thought of as a hybrid structure.  It is sort of a mix between a corporation and a partnership.  One might think of it as a partnership that insulates the owner’s liability to some limited degree, but similar to the corporation’s structure.

Although an LLC may appear to have some extraordinary benefits, several regulations must be followed for this type of organization in Texas.

Texas LLC Formation Form Download
Go ahead and download the form to complete to set up your LLC in Texas here.

Read my advice about whether an LLC would be a good legal business entity for you here

Protect Your Business Intellectual Property Assets

If your new businesses develops new inventions, manufacturing processes or products you will want to protect your intellectual property with patents, trademarks, and copyrights issued by the US patent and trademark office.

Learn more in my article – What is Intellectual Property and Why it’s Important to Your Business

Texas Trademark Info

Learn more about the particulars of how to get a trademark in Texas here

It is also a good idea to safeguard your business brand name with a trademark application.

Business Licenses & Permits

In addition to setting up your legal business structure LLC, INC, or DBA (as detailed above) you may (depending upon your type of business) be required to obtain a special business license or permits.

Obtaining your Business License has never been this easy! No guesswork, and we’ll do the paperwork for you. Apply today at Incfile.com.

Texas State Contractor Licensing

General contractors are not required to obtain a license to practice in Texas, as per the Texas Secretary of State Licensing Regulations here. This means that handyman, home improvement contractors, and home builders do not need a Texas state license. BUT, some Texas regions a general contractor may be subject to local (county or city) licensing requirements such as these:

Austin

If you are building or renovating in Austin, Texas, you must register as a general contractor and get a project building permit through the City of Austin Development Service Department.

Dallas

In Dallas, you must apply for a contractor registration based on the building license type you need for a specific construction project.

Houston

You will need to get building permits for each job. Use the Houston Permitting Center project planner to tell you which help you figure out which permit you will need.

San Antonio

General contractors in San Antonio need a variety of licenses depending upon the type of work such as home improvement contractor, residential building contractor (for large construction work). Apply through the City of San Antonio’s Developmental Service Department 

Specialty Building Trade Licenses in Texas (partial list – full list here in General Contracting section)

Contractor Licenses and Permits:
Air Conditioning and Refrigeration Contractors Licenses – Texas Department of Licensing and Regulation;
| 512-463- 6599 or 800-803-9202 (in Texas); https://www.tdlr.texas.gov/acr/acr.htm; secure.webform email:
www.tdlr.texas.gov/help

Air Permits – Texas Commission on Environmental Quality | 512-239-1250;
https://www.tceq.texas.gov/permitting/air or email [email protected]
Air Permits by Rule – Texas Commission on Environmental Quality | 512-239- 1250;
https://www.tceq.texas.gov/permitting/air/permitbyrule/pbr_index.html or email [email protected]

Backflow Prevention Assembly Tester Licensing – Texas Commission on Environmental Quality | 512-239-6133; https://www.tceq.texas.gov/licensing/licenses/bpatlic

Driveway Access Permits – Texas Department of Transportation | 512-463-8588; http://www.txdot.gov/inside-txdot/forms-publications/consultants-contractors/forms/row.html


Electrical Contractor Licenses – Texas Department of Licensing and Regulation | 512-463-6599 or
800-803-9202 (in Texas); https://www.tdlr.texas.gov/electricians/elec.htm;


Historical Structure Permits (Antiquities Permits) – Texas Historical Commission | 512-463-6100;
http://www.thc.texas.gov/preserve/projects-and-programs/state-antiquities-landmarks/antiquities-permits

Landscape Irrigator Licensing – Texas Commission on Environmental Quality | 512-239-6719; https://www.tceq.texas.gov/licensing/licenses/lilic

Plumbing Licenses – Texas State Board of Plumbing Examiners | 512-936-5200; http://tsbpe.texas.gov/

Register Your Business – Government IRS

Taxes – Sales & Income

The two primary taxes most new businesses must deal with are sales tax, and the dreaded income tax we all know, and wish did not exist. 

Sales Taxes

For businesses operating in US states, two necessary taxes need to be potentially charged to your clients.

  • Sales Tax – This sales tax applies to certain kinds of tangible products as well as services.
  • Use Tax – Use tax applies to products or services purchased out of state for use in the state.

Sales taxes are charged on most tangible products.  As well, sales taxes are levied on most services.  

Texas State Sales Tax Law

Texas imposes a 6.25 percent state sales and use tax on all retail sales, leases, and rentals of most goods, as well as taxable services. Local taxing jurisdictions (cities, counties, special purpose districts, and transit authorities) can also impose up to 2 percent sales and use tax for a maximum combined rate of 8.25 percent.

Sales taxes levied within certain cities and counties may vary from those found in the rest of the state of Texas.

Get detailed information about taxes by city and county Texas Comptroller site.

Income Taxes and Your New Business

There is no escaping two things in life: death and taxes.  And so, here is the handy resource to help you figure out your new business taxes.

IRS – Business Taxes Resource

Do yourself a favor and heed the advice above regarding the two people one ought to consult before starting a business – a lawyer and an accountant.  

When it comes to sole proprietorships, the taxes are relatively straightforward.  With all other forms of business structure, simplicity is muddied with multiple forms and regulations. 

It is easiest to budget into the business expenses to have the use and direction of a professional accountant to keep your business on track for success.

Insurance & Other Regulations: Federal IRS, State, and City

Legally, you are required to have certain federal and state licenses and permits depending upon the type of business you are founding.

All businesses must be registered with the IRS (Internal Revenue Service) in America when they file their business structure type, either DBA (sole proprietorship), incorporation or LLC for their tax status and filing purposes. Beyond that governmental requirement, you may need additional licenses as listed below.

PS: If you are not a US citizen check out my special guide on how to start an American business as a foreigner here


Federal licenses are required for those businesses that sell alcohol, dealing firearms or require federal permits listed here on the SBA website  also those firms in agriculture, aviation, fish and wildlife, mining, maritime, nuclear energy, television, and radio broadcasting, and transportation. Get more info here about licenses and permits needed to open your business.

Insurance Requirements for Texas Building Contractors

Know that Texas doesn’t require workers’ comp insurance. But, you could be responsible for expenses if you don’t have coverage and one of your employees or contractors gets injured on the job.

Texas does require contractors to have liability insurance of $300,000 per occurrence. Details here

Also, you are required to have commercial auto insurance if you have a business-owned vehicle in Texas.

Open Bank Account

Having a business bank account is a vital tool to run your business. It physically separates your business expenses from your personal accounts.

Please do not make the mistake that many beginning entrepreneurs do and run your business through your personal account.

You will be making it much harder since it will be more difficult to manage transactions, reconcile checking accounts and prepare your tax returns when your funds are comingled – personal and business.

Top business experts and the Internal Revenue Service recommend the separation of business and personal bank accounts. By opening a business account, you make this possible.

Additionally, having a business bank account is an important credibility factor to make your business idea a legit company and not just a dream.

Get my best tips on how to open your business bank account and the documents you will need here

Choose Your Team – Find & Hire Employees

Unless the business is completely automated, personnel (employees, freelance or subcontractors) will likely be required.  After all, it’s good old fashioned hard work that built American business.  And it will continue to be the labor of people that make businesses succeed.

In the case of hiring staff, there will be certain legal considerations that must be taken into account.

  • Staff hierarchy – Are management in place?  Who runs the various business operations?
  • Deductions & taxes – Accounts with the IRS setup?  Software or accounting in place for payroll?
  • Health care and benefits – Are your staff protected?
  • Working conditions – Does the working environment comply with all state regulations?

Use this new hire checklist from the experts at Freshbooks

Find Supplier Vendors & Negotiate Prices

Next you will need to source materials and inventory to sell in your company.  Here are my best tips on  how to find affordable wholesale sources

Learn How to Establish and Build Your Business Credit – 8 Easy Steps

Marketing & Advertising

Branding

Branding your business involves more than just naming the company. It also involves having a logo, often a particular font, and even a slogan for your business.  Also, company colors should be chosen.  This package is called your branding package, and it’s essential.

Get Your Perfect Logo Design

Can you think of a major business without a logo? Bet you can’t!

That’s because major brands are built on the foundation of strong logos, the single most important visual element of branding.

So, you know that you need a standout logo for your company. But how to create one?

Learn how I created my newest brand logo in this comprehensive 99designs step by step tutorial complete with over an over the shoulder video series.

PS (save $99 on your order with my exclusive coupon code here) .

Advertising

Advertising comes in many forms, from billboards to a website to a storefront sign.  In the good old days, there was a focus on flyers, and today it’s social media.  Regardless of the method, getting your business name out is essential to growing your client base.

Defining a solid strategy for advertising and setting an advertising budget is a significant step for any business.

When new stores launch, they often have a grand opening event involving media.  The same is true for restaurants and many other businesses.  This must all be considered at the beginning, especially if a significant startup even cost is involved.

Construction Industry Resources

Texas Construction Association Member Associations

Associated Builders and Contractors of Texas

Associated General Contractors of Texas

Associated General Contractors Texas Building Branch

Online Contractor Forums

Here you can connect with other contractors to ask questions, get advice and learn about helpful resources

State of Texas Business Resources

Texas SBDC Small Business Development Centers

SBDCs are America’s nationwide network of Small Business Development Centers. A partner program of the SBA (US Small Business Administration), SBDCs is hosted by universities, colleges, state economic development agencies, and private sector organizations. Its mission is to help start and grow small businesses.

Listed below are the regional centers of SBDC. Find out if there is an SBDC closer to you here – search by zip code.

University of Houston
Steve Lawrence
Executive Director
2302 Fannin, Suite 200
Houston, TX 77002 – View Map
Phone: 713-752-8425
Fax: 713-756-1500
Email: [email protected]
Web Site: https://www.sbdcnetwork.uh.edu

North Texas SBDC
Bill J. Priest Institute
Mark Langford
Executive Director
1402 Corinth Street, Suite 2111
Dallas, TX 75215 – View Map
Phone: 214-860-5831
Fax: 214-860-5813
Email: [email protected]
Web Site: http://www.ntsbdc.org

Northwest Texas SBDC Network
Judy Wilhelm
Executive Director
5001 W Loop 289
Lubbock, TX 79414 – View Map
Phone: 806-745-3973
Email: [email protected]
Web Site: http://www.nwtsbdc.org

South-West Texas Border SBDC Network
Albert Salgado
Executive Director
UTSA Downtown, 501 West Cesar E. Chavez Blvd., DB 4.370
San Antonio, TX 78207 – View Map
Phone: 210-458-2450
Fax: 210-458-2425
Email: [email protected]
Web Site: http://www.txsbdc.org

University of Houston – Bauer College
Steve Lawrence
Executive Director
1455 West Loop South
Houston, TX 77027 – View Map
Phone: 713-752-8425
Email: [email protected]
Web Site: http://www.sbdc.uh.edu
Facebook: https://www.facebook.com/UHSBDC/
Twitter: https://twitter.com/UHSBDC

3 Effective Ways to Reach Your Company’s Target Audience

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Forget about what you sell… focus on how you sell it. You could provide the very best product range in your market, but it’ll all count for nothing if you fail to spread the word about your industry-leading level of service.

If you want to promote your goods effectively, you need to ensure that your advertising campaigns are reaching your target audience on a daily basis.

To find out what you must do to achieve this crucial feat, be sure to read on.

Upload relevant content

The relevancy of your content will have a profound impact on your ability to reach, engage, and ultimately retain your target audience. Once you start producing content that your core consumer base finds useful, you will slowly but surely start to pique their interest. Before too long, this will result in you drawing more eyes to your product, which in turn will help you to climb the SERPs and, ultimately, improve your lead generation rate. 

Uploading content that resonates with your target audience is never going to be a straightforward task; there’s no denying that. If you want to perform this all-important task in a highly efficient and effective fashion, be sure to put the following advice into practice:

  • Understand your key customer persona
  • Get to grips with user intent and use this to define your keyword choices
  • Compile a list of keywords that cover all the important bases of your company (your product range, geographic details, consumer solutions, etc.)
  • Optimize your SEO efforts (advice can be found here)
  • Fit keywords into your meta descriptions
  • Create a compelling objective statement
  • Keep up with current events by uploading content in a timely fashion 

Leverage the power of influencers

Influencers are individuals who have a large web-based following. The comprehensive level of attention they attract provides them with a degree of authority over their fanbase. In turn, this bestows upon them the power to disrupt the major purchasing decisions that their followers make. Once an influencer promotes a certain product, you can be sure that their fans will feel more inclined to purchase the product in question themselves.

Leveraging the power of influential figures in your industry is one of the most effective things that you can do to reach your target audience. With the right individual by your side, you will find it easier to upload the right content, in the right places, at the right times. 

If you want to maximize the profit potential of your influencer partnership, you might want to consider heeding the following advice:

  • Explore your options and find yourself an influencer whose brand aligns with your own (take values, aesthetics, and personality into account in this instance)
  • Set out your stall right away by discussing what you aim to achieve through your influencer marketing campaign
  • Pay your influencer partners fairly for the services that he or she provides
  • Embrace the fact that you won’t have full creative control over your promotional campaigns

Mega, Macro, Micro, Advocates, Referrers, Loyalists, Influencers, Celebrities — it’s safe to say that online influencers come in all shapes and sizes. For advice on what you must do to find and choose the right influencer for your business’ brand image, be sure to check out this helpful article on the matter.

Give SMS marketing a go

SMS messaging might not be a particularly modern tech communication service, but it still has an integral role to place in the world of marketing. Once you embark on an SMS advertising campaign, you will have the capacity to send information pertaining to your company directly to your consumers’ phones. This simple yet effective promotional tool will afford you the opportunity to cut out the middleman in this instance, which in turn will provide you with more autonomy over the brand image that you wish to portray.

Aside from the positive impact, it will have on your brand awareness, SMS marketing will also be sure to benefit you in the following three ways:

  • Instantaneous interactions with your brand
  • A simplified platform for response 
  • Optimized external channel integration

If you want to ensure that your next text message advertising campaign goes off without a hitch, be sure to align yourself with an expert such as Tatango. With their trusted SMS marketing software at your disposal, you won’t have to worry about a lack of coding skills and experience holding you back. This dedicated team of advertising professionals will help you to manage your company’s text messaging workflow in a highly optimized fashion.

Do you want to forge a deeper connection with your target audience? If so, be sure to improve your consumer outreach program by putting the advice laid out above into practice.

Startup Capital: 17 Proven Funding Sources to Launch Your Company

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Get the Cash to Get Your Business off the Ground

If this is your first startup business you are probably wondering where can you get cash to launch your company. I got your answer. In fact, I got dozens of proven sources for startup cash that I have personally used to fund ventures successfully. Keep reading to get your business idea funded now.

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Fortunately, there are many sources of startup capital for the eager entrepreneur. Check out this list of business financing options for your startup.

Bootstrapping Finance Options

As in ‘pulled herself up by her own bootstraps’, Bootstrapping refers to self-funding a startup.  If you’re not swimming in loot, don’t worry. There are several versions of this tactic, all of which are most often combined with other strategies.

1) Personal Savings
Let’s start with the simplest one.  Use your own hard-earned bucks as capital in your new business.  The PRO is that you’re legally/financially accountable to no-one and you don’t have any interest payments.  The CON is that you assume all the financial risk with almost no protection if the business loses money.

2) Retirement Accounts (ROBS)
If you have over $50,000 in an Individual Retirement Account (Roth IRA or traditional IRA) or a 401(k), it is possible to use your retirement savings as startup capital for your new business.  This little known, misunderstood, and unfortunately abbreviated program is called a ‘Rollover for Business Startup’ or ROBS.  

Under other circumstances, taking money out of your retirement savings before retirement age would result in substantial tax penalties and loss of interest, but conducting a ROBS avoids this. A ROBS is not a loan against your investment, and technically it is not a withdrawal from your retirement savings.  All this said, using a ROBS is an intricate thing. I always recommend working with financial professionals when using this type of funding strategy.

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3) Personal Credit (Credit Cards)
Many aspiring entrepreneurs have better access to credit than cash.  Do some research and sign up for a small business credit card with significant perks and cash back bonuses. While credit cards are a relatively simple and easy way to make capital purchases, there is a significant risk to your personal credit.  A good strategy is to limit credit card spending to specific revenue-generating projects. That way, when your customer pays you, you can pay off your credit card.  This protects your credit score and limits charges from high-interest rates.

4) Personal Credit (Home Equity Loans)
This strategy is basically the same as the one above but involves using the equity in your home as collateral.  The initial capital flexibility of this is usually pretty high, but the risk is great. I put this on our list of startup capital sources to show one extreme, but I do not necessarily endorse this method.

5) Friends & Family
This is a pretty common strategy because it involves fewer hoops and less financial risk than taking out a loan or charging against your credit.  However, this tactic involves mixing your personal life with your business endeavors, which is another breed of complication. If you ask for a loan, you obviously have to repay it.  If you sell equity in your business, you have to split profits and potentially involve your friends & family in your business decision-making. Either strategy could get messy.

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Bank Loan Financing

While this is generally where people’s minds go first, it is not necessarily the best source of startup capital.  Banks are generally wary of lending to startups, especially if you don’t already have any commercial assets. For the most part, banks are a much better resource once your business is off the ground or if this is not your first small business.  Here are a few targeted areas where the bank may be more willing and able to assist with capital.

6) Term Loans for Machinery
Banks may lend you money, in the form of a term loan, toward the purchase of equipment or machinery.  Financial institutions are much more likely to lend you money to buy fixed assets that will have value no matter the outcome of your new endeavor.

7) Term Loans for Working Capital
‘Working Capital’ refers to cost-of-goods (inventory) and providing credit to initial customers of your fledgling business. Banks will typically work off of a business model you provide to assess if their investment will make a return through customer purchases.

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8) Loans for Research & Development
Banks may be more interested in loaning capital if your business model involves the development of technology or other patentable items/ideas.  Of course, you will be required to adequately demonstrate your capability to create this potentially profitable merchandise or intellectual property.

Customers & Suppliers Funding

This may seem like putting the cart before the horse, but there are a lot of strategies for generating startup capital that involve suppliers and customers for your new business.

9) Product Licensing
Consider this as an ‘alternate strategy’ for starting a new business.  This is a common scenario for aspiring entrepreneurs with a great product or service idea:  You don’t have the startup capital. You don’t have the capability to produce the product. You don’t know how to produce the product.  And even if you got past all that, you don’t have the distribution network to sell the product.

Rather than tackle all of those formidable challenges, consider licensing the idea for the product to a company that has all of this infrastructure already in place.  This may feel like a disappointing solution, but it is imminently better than the frustration of sitting on an idea that you have no way of shepherding to fruition. Don’t try this tactic without guidance.  Consulting firms like Lambert & Lambert are experts in partnering innovators with the right producers.

10) Customer Orders (Crowdfunding)
If your product is unique or in high demand, customers may be willing to pre-pay for their orders or give you an advance on your production of the product.  This sort of arrangement can be hard to negotiate, especially if you are an unknown entity.

Crowdfunding is a more regimented technique that utilizes this same concept.  Using the potency of social media, crowdfunding platforms like Kickstarter help you draw the interest of individuals who might pay small amounts to help you get your products off the ground.  The reward for them is generally just the first crack at your innovation.

11) Invoice Financing
Invoice Financing (also called ‘Accounts Receivable Financing’) is where a lender will loan you money based on outstanding customer invoices.  This can be a bit confusing to wrap your head around, so I’ll break it down with a few simplified steps:

#1 You make a product or deliver a service to a client.

#2 You generate an invoice for this product or service and send it to the client.

#3 You also send a copy of the invoice to the lender, who pays you the amount of the invoice (basically vouching for the client).

#4 The client pays the invoice.

#5 You repay the lender the value of the invoice plus interest.

With Invoice Financing, lenders are much more concerned with your credit (and that of your client) than the nature of your business.  These loans are typically fairly easy to obtain in a very short amount of time. However, they generally carry high rates of interest, so I only recommend them for short-term borrowing.

12) Purchase Order Financing
Purchase Order Financing is similar to invoice financing, but with one very important difference: you can apply before you have produced the product or provided the service.  This is a crucial advantage if you are lacking the capital for materials (and therefore can’t produce the product, allowing you to generate an invoice).  With Purchase Order Financing, a client will send you a Purchase Order signaling their intent to purchase your products or services.

You can then take the Purchase Order to the lender for a loan.  Once you obtain the capital, manufacture/ship the product, and are paid by the client, you can repay the lender. Qualification for Purchase Order Financing typically has everything to do with the credit and reputation of your customer, so this is a much more effective strategy with a large and well-established client.

13) Supplier Lines of Credit
On the other end of the equation, you may be able to buy yourself some time to pay your own suppliers by negotiating lines of credit.  The goal is to be granted ‘terms’ (generally a period of 30 or 60 days) before you are required to pay each invoice.  The combination of this strategy and having your own customers prepay for the products can produce a solid chunk of working capital for you.  Of course, you have to make sure you deliver!

Other Sources of Startup Capital

There are several other niche sources of capital that you can mine if you’re savvy and if your business model meets certain criteria.

14) Microloans
Microloans are private loans from non-profit groups that are specifically tailored for certain types of startup businesses.  Generally, these loans are for amounts less than $10,000, so they aren’t for substantial capital purchases. Because of the variable interest rate (as high as 22%), I don’t advise that you take one out if you don’t have a high degree of confidence you can repay it quickly. Many microloans are for very specific businesses or business owners such as DBEs (Disenfranchised Business Enterprises).  DBEs include businesses owned by women, minorities, or individuals with disabilities.

15) Venture Capital
Many people know this term (possibly because it sounds really cool) but not much about it.  Venture Capital investors are investment firms that inject seed money into other businesses. Rather than charge interest for the money (or even expect it back), they buy equity or a minority stake in the business.  This means that will you share profits with the Venture Capital firm. Also, because Venture Capital firms have their own investors to report to, they will take a more active role in the managing of your business. Look for venture capital for startups. While this can be a good source of capital for the right entrepreneur, it can be extremely difficult to obtain.  Venture Capital firms target opportunities with high reward potential, typically in specific industries such as medicine or technology. Learn how to best pitch investors 

16) Angel Investors
Angel Investors are similar to Venture Capitalists, but there are a few key differences.  First, Angel Investors are more likely to be wealthy individuals or families, rather than corporations. They also tend to make their selections based on their belief in you, the business owner, in addition to your business model.  

For this reason, aggressive networking and maintaining an unimpeachable reputation in the business world are both very important for attracting the right Angel Investor. Finally, while Angel Investors may be interested in obtaining a higher percentage of your business than Venture Capitalists, they are much less likely to ask for an active role in managing the business.

17) Government & Private Grants
If you have the right sort of business, government grants and private grants can be great avenues for obtaining capital as startup business grants.  It’s basically free money. Unfortunately, of all our potential sources, these tend to be the most difficult to secure.  Generally, the types of institutions eligible for grant money are very limited (e.g. schools, churches, charities) and you may need to first receive a certain tax designation from the IRS.  Obtaining grant money and retaining your eligibility is a complicated process.

Check out my list of the best small business startup grants here

The Bottom Line
If you take one thing away from this article, it should be this: don’t let your current financial situation stand in the way of opening your next small business.  

Do your due diligence to research all the avenues open to you. The opportunities are out there for entrepreneurs with the fortitude and humility to try a few different doors before they find the right source of startup capital for their next great business idea.

Tools To Help Grow Your Online Business

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The success of your new company hinges on much more than a magnificent idea. In order to observe a positive growth in the highly competitive realm of online business, it can be of upmost importance to utilize a wide range of software tools. 

If you are determined to make your business shine out amongst the growing number of entrepreneurs in the US, then looking at the fundamentals of online marketing and website building could be the way forward for you. 

A User-friendly Content Management System (CMS)

A content management system is essentially a tool for creating and maintaining your website efficiently and affordably. 

Some of the world’s most recognized brands utilize cost effective options such as WordPress and Squarespace, perhaps proving that “Bang for your Buck” is indeed a real thing. 

If you have limited or absolutely no knowledge about coding and would like to save money on hiring a website designer, it may be worth your time to check out some of your options. 

A website can be the first point of contact between your brand image and the customer, so spending time designing one that is cohesive, easily recognizable and a joy to use can help the experience run as smoothly as possible.

A Maturity Assessment Tool

In order to supply your customer with interactivity while at the same allowing for a portion of your services to be automated by a neat bit of software, an online maturity assessment might be well worth your time. 

A maturity assessment tool offers users a survey opportunity that reports personalized results based on your chosen parameters. This tool can be especially helpful for those of you who are looking to build client relationships and streamline your website using qualitative feedback solutions.  

The reports generated are unique for the individual user, and moreover, you do not need to be a CSS genius to make it work, the software can help you with this. 

This can also be a great option if you are looking to implement additional, interactable features to keep your website interesting, such as questionnaires and quizzes. 

Cloud Storage Options

As your digital assets grow over time, so will your need for storage space. These assets might include any images, data and files you need to regularly update and access throughout your working day. 

A cloud storage option can offer you many benefits alongside the factor of additional storage space. Some of these benefits can include ease of access to your online resources, file sharing and efficient employee collaboration. 

Dropbox is a widely used tool for a variety of different businesses that operate in many different fields. If you need to share files regularly with your team, Dropbox can streamline this process in order to save time and confusion. 

The ability to access your files in a singular, organized location from anywhere in the world is a useful option, especially for those of you who are working with a team remotely. A highly coordinated and autonomous workforce can help your organization to grow without the need for high levels of micromanagement. 

Social Media Marketing Campaigns

With social media being the readily accessible giants of industry that they are, it can be crucial to connect with the billions of people who use their services in order to nurture the marketing aspect of your company.

Tools such as Buffer can help you extend your reach on social media, in order to grow your visibility and potential client base. By investing in software tools that allow you the chance to analyze the effectiveness of your posts, you can start to develop a plan involving when to advertise on which platform. Insights into how your marketing is performing can be crucial in terms of adapting to current trends. 

Platforms such as Facebook and Twitter also offer their own marketing options which could be worth looking into for their various individual benefits. 

Effective SEO

Effective SEO is a tried and tested method of garnering brand visibility online, another area that social media has affected in various capacities. Google Trends is a free tool that you may want to use in order to keep up on current internet searching trends. 

Not only does this tool offer you a window in which to observe popular searches, but it allows you the opportunity to see where the searches came from geographically. 

This may help you cater your posts and content to a specific subregion, thus increasing your brand’s discoverability in the eyes of your optimal demographic. 

10 Gig Economy Business Ideas to Start a New Business

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A number of tenured workers found themselves at the heart of the gig economy after losing their positions due to company closures amid the pandemic. In the gig economy, companies favor hiring short-term and contractual workers over permanent ones, causing an imbalance to the labor market that has favored permanent workers for decades. 

One cannot say with conviction if this type of economy is good or bad. But for those who have been in the gig economy for quite some time, it’s easy to spot and grab opportunities if you just know where to look. 

Freelancing is heavily based on skills and networks. It’s normal for beginners to feel a little overwhelmed. But as long as you are armed with the right skills, and you are open to learning more things, you can grow your gig into a full-blown business or income source. Here are some business ideas to get you started: 

  1. Ridesharing Services 

If you’re a freelancer who owns a vehicle at the same time, this is a great way to earn additional income as long as you’ve got the time to spare. Just make sure that you’re not prone to road rage since the busy streets and the not-so-friendly passengers can take a toll on your patience. 

As one of the major sectors in the gig economy, you can choose to be an accredited driver for established ridesharing companies to have access to a wide range of clients. Drivers of ridesharing services can earn an average income of $25 to $35 an hour. 

Sure, that seems like a good side hustle—but it is not really a business, isn’t it? Well, this is where your idea should come in. Once you’re familiar with how ridesharing works, you can study then tweak the process so you can launch your own ridesharing service. 

  1.  Delivery Services

Delivery services exponentially grew into a major service industry due to online shopping and e-commerce. And because a majority of workers and students these days are stuck at home, the demand for delivery services has grown even bigger. 

Nowadays, anything that can be ordered online has to be delivered—from food, clothing, medicines, groceries—the list is endless. Some ridesharing drivers even accept delivery orders on the side. 

If you want to engage in this service or convert it into your very own business, download ta popular delivery app and see how else you can improve it. Generally, the delivery is initiated as a customer completes an order online. The delivery staff is notified and will be assigned to deliver the item to the customer. Upon accepting the task, the delivery person picks up the item and transport it to the customer’s address.

Providing delivery services is generally a good idea, especially if you live in an area that needs more local-based deliveries. For example, you can partner with a homegrown café, restaurant, or mini-mart and run delivery services for them within your neighborhood. This service will be greatly appreciated, especially at a time when social distancing measures are still in place.

  1. Personal Assistant Services

A lot of people are extremely busy doing multiple tasks at the same time. In other words, some people don’t have the time to sweat the small stuff such as walking the dog, cleaning the yard, checking home fixtures, doing minor carpentry works, and other similar tasks. 

Get inspiration for naming your dog company from my list of the best pet business names here

Most of these activities require special masonry, carpentry, or gardening skills. Some gigs, however, do not require specializations and skills. Examples of this are moving and lifting stuff, dog walking, personal shopping, or babysitting. 

If you want to turn these services into a business, you can pool your friends and family members and then create a service where people near you can connect and make arrangements, or hire your team for assistance. 

  1. Setup A Freelance Job Placement Agency

The gig economy favors talents who possess various skills, that’s a given. And as such, the demand for freelance or contract workers has exploded. If you have experience in being a virtual assistant and you know a group of people who have the same experience, a great business idea is to set up a virtual assistant consultancy or job placement agency. 

While you can specialize in referring general virtual assistants, you can explore other sectors too. For example, you can refer paralegal, engineering, or accountancy assistants to highly-technical firms or individuals who need a reliable and tech-savvy secretary who is familiar with their field. Launching consultancy services is also a great business idea. You can earn by offering webinars, subscription e-mails, and creating instructional videos about your skill and expertise for a fee.  

  1. Put Your Idle Properties To Good Use

Another way to earn additional income from the gig economy is to have your properties and assets rented out. There are home-sharing apps and online listings, like Redefy, that can help you connect with potential buyers or lessees. Aside from real properties, you can also offer rental services for cars, boats, heavy tools, outdoor equipment, and other valuable items that are not commonly bought by homeowners.

  1. Set Up A Coworking Space

Speaking of rental spaces, another business idea that could work nowadays is setting up a coworking space for both freelance workers and tenured workers who are now working from home. 

As you probably already know, many employees have a hard time keeping a work-life balance because of the work-from-home setup. Some get distracted by children and other family members who can’t keep voices down. Some are also easily tempted to just stay in bed and not work all day long. 

With that said, you can offer a conducive and safe working space that can help these employees concentrate better at work. However, if you are going to do this, you have to ensure that social distancing measures are still in place and that the guests observe basic health protocols when they go inside the coworking space.

  1. Create A Content Writing Service 

If you’re a certified wordsmith and have ample experience as a content writer, blogger, social media manager, e-book writer, product description writer, and proofreader, you may offer your services to enterprise owners who need these services to scale their business. 

Again, you don’t have to do this alone. If you want to make a business idea out of this skill, you need to team up with a group of other writers and content creators too. This way, your services can accommodate more niches and provide other content-related services such as editing, data entry, video production, animation, and social media services. 

  1. Establish A Web Development And Design Agency

If you are more into web design and development, then you may opt to establish your own agency for this service too. The gig economy is always open for those who love the arts and technology. Online businesses don’t just need content to compete in the digital age, they need visuals too.

Web designers are perpetually in demand nowadays, as their skills are needed in creating, improving, and maintaining a website. This includes brand logo designers. Once again, you may pool a group of capable designers who can offer a range of web design and development services for various clients.

  1. Engage In Online Selling

If you want to take your marketing skills to the next level, engaging in online selling is a good idea. If you think you can create and supply a product that could address a unique need or demand, then go for it.    

Whether you want to open an e-store or sign up as a seller on various e-commerce platforms, it’s all up to you. Take note that there are specialized online stores nowadays and you may want to check them out first to assess which one works for you. 

In most cases, having an online store while maintaining an account with other e-commerce platforms is the best way to reach a high number of clients—especially if you are still starting out. It’s also a good rule to check and assess who your competitors are, so you will know how best to position yourself in the market.

  1. Establish A Tutorial Service

Young students are taking online classes these days, so why not offer tutorial services too? This could work if you have a teaching background, and most especially if you like kids. Since the majority of parents are working remotely nowadays, you can instead offer personal online tutorial services that can help their children review for exams, quizzes, and accomplish homework. 

You can also offer to help the kids review for standardized tests for an additional fee (of course). Again, if you want to turn this into a business, you have to team up with a number of good educators who can help you provide quality tutorial services to a range of clients.

The Final Cut 

The gig economy is here to stay, and so are the endless opportunities that would come from it. The great thing about being in the gig economy is that you can hone your skills and eventually start your own business once you have garnered enough experience and networks. 

While the gig economy is usually affiliated with side hustles and part-time income, there’s plenty of chance to explore and expand as a professional and savvy entrepreneur—with the right ideas, skills, and expertise.