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This story is part of our Small Business Guide, where the Landing breaks down different resources and tips for starting a small business in Texas.

In starting her business, Dr. Alexia McClerkin wishes she had known what she knows now. 

McClerkin, owner of The Sports and Wellness Doc, a Houston-based chiropractic and regenerative medicine practice, opened her business in 2016. After receiving her medical license, she hopped from job to job, but for whatever reason, couldn’t find a permanent gig. 

Instead of continuing the pattern, she decided to trust faith and take the leap to start her own business. She recalls searching “commercial real estate in Houston” on Google and visiting different locations before settling on a space for the practice. When she finally opened it, she realized there was a lot she didn’t know when it came to operating her business.

Now, McClerkin is better versed on the resources available to small business owners that could have helped her in the beginning. 

“I wish I’d known about the resources like SCORE and then the SBA too, because those are a lot of great free resources that I didn’t take advantage of until later because I didn’t know about them,” she said. 

Opening a business takes time and effort, and keeping it afloat does too. In Texas, small businesses accounted for 88,643 openings and 63,428 closings between March 2021 and March 2022, according to the U.S. Small Business Administration’s Office of Advocacy.  

We compiled some general steps you can take to be as prepared as you can be before opening your doors. 

Find a mentor

McClerkin advises people to find a mentor early in the process. People don’t usually mind helping you and sharing mistakes to avoid, she said. 

Through the Goldman Sachs 10,000 Small Businesses program, she was put in touch with a mentor and learned things such as employment law, marketing, understanding and creating profit and loss statements, and more. 

“It helped me tremendously,” McClerkin said. “I didn’t realize how horribly I was running my business.” 

One thing she emphasized is that you should never pay for a mentor. 

SCORE is one free resource that connects entrepreneurs with former executives, subject-matter experts, CPA marketing executives and even attorneys for advice, said Jada Harris, president of Houston’s SCORE chapter. Aside from its mentor network, SCORE provides small businesses with free resources such as webinars and courses on finance and marketing, as well as a library of online resources. 

Once paired with a mentor, you can meet with them via Zoom or in-person, depending on each person’s comfort level and location. To learn more about SCORE or to connect with a mentor, click here. 

“It is important to just start and seek help,” Harris said. “There’s no way that you can do this by yourself.”

Research your idea

It’s best for future entrepreneurs to research their idea before they think about launching a product or service, said Steve Lawrence, associate dean and executive director for the University of Houston’s Texas Gulf Coast Small Business Development Center Network. 

“If you go into opening up a business without thinking through your product or surface service, you’re entering into a market where there’s lots of products or services that are very similar to yours, (then) that means that there’s a high (risk) for failure,” Lawrence said. 

The Small Business Development Center offers business owners opportunities to do free market research, which includes demographic research, pricing, product and service research, and more. 

“Entrepreneurs need to launch a business with two things: their head and their heart,” Lawrence said. “They need to use their head in terms of their planning and their thinking through it, and with their heart because a small business needs seven days a week, 18 hours a day, all the time, everything you can put into it.”

By using your brain upfront, it can save you a lot of time and energy down the road, he said. Your heart will be the soul and energy you put into the business moving forward. 

Make a thorough business plan 

Lawrence suggests you make a thorough business plan that outlines important aspects of your business. A business professional or mentor from your field of interest should look over it once you have it all on paper, he says. 

The plan should answer questions related to the execution of your business, such as:

• How are you going to start?
• What’s the product look like?
• How do you plan to go to market?
• What are you going to do when you go there? 
• What’s your manufacturing? 
• What are you going to do to follow up with it once it’s sent to market?
• What’s your pricing plan look like? 
• What’s your profit look like?

Find funding ahead of time

Determining how to fund your business is another step in getting your business up and running. 

“Sometimes we think that we’re going to fund it ourselves or we’re going to borrow money from our relatives or we’ve got a short cash stream,” Lawrence said.

Lawrence warns against using personal credit cards to fund your business. He says it’s “the worst possible way” that you could fund a business.

“Some people try to do that, but they get into trouble really quickly that way,” he said.

McClerkin emptied out her savings to open Sports and Wellness Doc. If she had known there was a better way to fund her business without tapping into vital personal resources, she would’ve applied for capital. 

“Having gone through the Goldman Sachs program, I learned — and also going to many different business workshops — that you don’t use your own money,” she said. “You use other people’s money for what you need.”

If you are a business entrepreneur, you can try to find loan opportunities or grants to apply to help you fund your business. There are various programs and organizations in Houston that offer funding opportunities. 

Also, it’s important to look at your credit when planning to fund your business. Depending on if you need a loan or not, improving your credit score or lowering your outstanding debts could take anywhere from a year to 18 months, Lawrence said.

Determine location versus online

The next step is to determine the location of your business. 

Will you be opening a brick-and-mortar business? Brick-and-mortar businesses are physical building locations rather than virtual locations, food trucks or mobile units. Would you purchase a unit or rent a space? If you’re leasing a space, McClerkin says you will still have to pay taxes for it in the city of Houston. 

Food trucks and mobile units are other spaces you’ll have to manage before opening your doors. 

Or, you can decide if you would prefer to open an online store rather than a physical location. 

Each place has different benefits and requirements to open. 

Determine your business structure

Your legal structure is how you plan to operate your business. Will it be an LLC, corporation or do you plan to be a sole proprietor? 

You can reference the Small Business Administration to learn more about each and how to pick your own. 

Register your business

At this point in the process, you should register your business with the state, county, or sometimes local business registration, Lawrence said. You would also have to register for state and federal tax identification. 

As a sole proprietor, you’ll have to register and file your business name with the local county clerk’s office. 

Small businesses owners can receive trademark protection or tax-exempt status if they register with the federal government, according to SBA.  

Registering your business allows you to have liability protection, legal benefits, and tax benefits, according to SBA.

Find what business licenses and permits you may need

Texas does not require a general business license. Depending on location or items, you may be required to apply for certain business permits or licenses. There are different required state and city permits as well. 

The state of Texas offers a comprehensive guide on the different permits you may need depending on the business type. 

Food establishments require a food manager certificate and food handler training.  

If you plan to sell any taxable items, you must also register for a sales tax certificate. If you plan to sell alcohol, you will also have to apply for a state alcohol TABC license. 

Handling payments, taxes

Determining how you plan to accept payment is one of the final steps before opening your doors. You may also want to consider hiring a certified public accountant, bookkeeper or using an online service to help with managing your finances and filing taxes.

McClerkin says she didn’t realize the importance of hiring an accountant until later on. An accountant or bookkeeper can help keep track of bank statements for taxes. 

They can monitor and organize profit and loss statements, monthly financial monitoring and also apply for grants and loans on your behalf, she says. 

Additional things to remember

These steps are not completed all at once but usually taken in bits and pieces, Lawrence said. 

Additionally, the timeline of completion varies per person and can range from a few months to 24 months or longer. The steps you take should also be tailored to your own personal business, since not everyone starts the process with the same knowledge. 

As an entrepreneur, you also have to continuously consider how to differentiate your product or service from others.

“Just because your family likes that cake you make doesn’t make it special,” Lawrence said. “What’s different about that cake? Can you make it different and faster? And is it cheaper? Or is it so special that the consumer is willing to pay for that extra price?”

For McClerkin, she wishes she knew everything she currently knows as a business owner. 

“Don’t just open up a business just because you’re like, ‘Oh, I have this idea. Let me go and open up a business,’” she said. “Because it can probably come back and bite you in the butt.”

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