SMALL BUSINESS START-UP GUIDE Your roadmap to starting and growing a business in Brownwood, Texas
How This Guide Can Help You The purpose of this guide is to help you turn the idea for a business in Brownwood into a reality. This guide can help you in three important ways: 1) It can help in the research process that should take place before actual plans are made. 2) It can help put that information regarding your business into a well thought-out, well-written business plan. 3) It can act as a resource for most of the steps you must follow to get your business successfully started in Brownwood. The importance of getting your business plans down on paper cannot be emphasized enough. Before assuming any binding obligation, have all your plans and information about your business organized into a written business plan. This is a valuable aid when presenting your plans to the appropriate professionals (attorney, banker, accountant). If you already own a business, you may wish to use this booklet solely as a guide to establishing a location or a branch in Brownwood. Below are a few suggested steps to using this booklet to its fullest advantage: 1) Read it through once in its entirety. 2) Do some outside research and gather as much information as possible from the resources available by visiting their website. 3) As you proceed, get EVERYTHING down on paper and begin writing a well-defined business plan. 4) Consult with your banker, attorney, accountant, insurance and real estate agents about your plans.
Table of Contents Introduction ............................................................................................................................................. 5 Organize Your Business ............................................................................................................................ 6 Research Your Market ............................................................................................................................... 8 Business Plan .......................................................................................................................................... 9 Financing ............................................................................................................................................... 12 Location ................................................................................................................................................ 13 Zoning Procedures ................................................................................................................................. 14 Building Construction or Remodeling ...................................................................................................... 14 Permits and Licenses ............................................................................................................................. 15 Utilities .................................................................................................................................................. 16 Assumed Name ..................................................................................................................................... 17 Labor Considerations ............................................................................................................................. 18 State Unemployment Insurance .............................................................................................................. 18 Workforce Development ......................................................................................................................... 19 Work in Texas ......................................................................................................................................... 19 Americans with Disabilities Act ............................................................................................................... 20 Local Tax Requirements .......................................................................................................................... 21 Marketing Your Business ......................................................................................................................... 22 Conclusion ............................................................................................................................................ 23 Additional Resources ............................................................................................................................. 24
CONGRATULATIONS Starting a business is an exciting step toward turning your ideas into reality. This guide is designed to serve as your roadmap, walking you through each step of planning, launching, and growing your business. While this guide provides essential tools and guidance, we encourage you to conduct your own research, ask questions, and gather as much information as possible to build a strong foundation for success.
BEFORE YOU START YOUR BUSINESS Before launching a business, take time to plan carefully and honestly evaluate your readiness. Successful entrepreneurs maintain a positive mindset, stay organized, and handle both the highs and lows that come with ownership. Starting a business requires long hours, dedication, and a genuine passion for what you’re doing. A strong understanding of your product or service is essential. Assess your skills, interests, and experience—your knowledge will guide key decisions, help you hire the right people as you grow, and support edective management of your business. While many small businesses thrive, a significant number fail due to lack of experience, poor management, neglect, or unexpected challenges. To succeed, you must be a self-starter who can make decisions, lead others, stay organized, work hard, and take responsibility. If you’re prepared for the risks and ready to commit to the work ahead, it’s time to begin planning your business with confidence.
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ORGANIZE YOUR BUSINESS The first task you will need to decide in establishing a business is choosing the type of organization. There are three basic types of organizations: Sole Proprietorship, Partnership and Corporation.
Sole Proprietorship Sole Proprietorship is the most common type of small business. The individual is the sole owner of all assets and is the employer. They bear all profits and losses and are personally liable for all debts and obligations of the business. Outside assets such as home, car and personal bank account are subject to claims of business creditors.
Advantages § § § § §
Simple and low costs to organize. The owner is solely responsible for business decisions. Minimum legal restrictions. Profits are taxed only once. Business easy to discontinue.
Disadvantages § § §
Does not have separate legal status. The owner has unlimited liability. The owner is limited in raising operating funds, which may inhibit expansion of business.
Partnership A partnership type of organization consists of two or more owners, with profit and loss shared equally or allocated by partnership agreement. Each partner is liable for business debts and obligations, and each partner’s outside assets may be subject to claims of creditors unless limited by partnership agreement.
Advantages § § § § § §
Easy to organize. Able to obtain more operating funds than a sole proprietorship. Combines the managerial skills and judgements of several partners. A partnership has separate legal status. Income is only taxable once. Income is taxed at the partner’s tax rate.
Disadvantages § § § §
General partners have unlimited liability. A change in partners could terminate partnership. Authority for decision making is divided. A partnership is didicult to sell or transfer.
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Corporation A corporate structure is a separate legal entity, allowing flexible business operations. Your attorney can probably evaluate the possibility of incorporating your business. A corporation has limited liability. A corporation is formed when a transfer of money or property, or both, takes place by the prospective shareholders in exchange for capital stock in the corporation.
Advantages § § § §
The owners (stockholders) have limited liability. The business continues to exist after the death of an owner. The transfer of ownership is easily done by the sale of stock. A corporation can raise larger amounts of capital more easily than sole proprietorships or partnerships.
Disadvantages § § §
The corporation is subject to double taxation. The costs of organizing a corporation are higher than other forms of business. Corporations are heavily regulated through state and local laws.
Before choosing a business structure, take time to understand the strengths of each option. Every form of organization oders its own advantages, and your accountant can be an invaluable resource in helping you make the best decision. Another option to consider is the Subchapter S Corporation. For businesses that qualify—generally those with 100 or fewer shareholders, this structure allows profits and losses to pass directly to individual owners’ tax returns rather than being taxed at the corporate level. For more information: Entity
Service
Website
Governor’s O3ice
How to start a business
gov.texas.gov/business/page/start-a-business
Governor’s O3ice
Small business resources
gov.texas.gov/apps/business/portal
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RESEARCH YOUR MARKET Understanding your market and target consumers through edective market research is essential. It helps you uncover preferences, opinions, emerging trends in consumer behavior, geographic advantages, and key demographic insights. Resources include:
Resource
Assistance Provided
Website/Contact
Brownwood Municipal Development District
Provides online business resources that o8er demographics and community information, area maps, property listings, business start-up guide, and much more.
www.brownwoodbusiness.com
Brownwood Area Chamber of Commerce
Provides information on the business community and is an excellent opportunity for networking.
www.brownwoodchamber.org
Small Business Development Center
Provides information and assistance with business plans, financing, and more
www.tsusbdc.org
Brownwood Public Library
Good Source for reference material. Look in the Directory of Associations to find what trade associations there are for your type of business
www.brownwoodlibrary.com
Federal and State Governments
The US Department of Commerce
www.commerce.gov
Formal and informal surveys
Gathers perspective of potential consumers as well as wholesalers, manufacturers and retailers
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THE BUSINESS PLAN A well-organized business plan is your roadmap for turning ideas into action. It helps you set realistic goals, make informed decisions, and track your progress as you grow. A strong business plan oders several key benefits: 1. It gives you a clear path to follow by defining goals and the steps needed to reach them. 2. It allows your banker, attorney, accountant, and other advisors to understand your objectives and evaluate your needs. 3. It communicates your vision and operations to employees, suppliers, and partners. 4. It strengthens your skills as a manager by helping you think through competition, marketing opportunities, and long-term strategy. In short, your business plan is an essential tool for organizing your operations, attracting investors, and securing financing.
Developing a Business Plan A good business plan contains the following elements:
Executive Summary – In the summary clearly and precisely define: 1. 2. 3. 4.
Your business. The product you manufacture or the services you will provide. The industry and its overall condition. Information about yourself, your qualifications and your experience. (This is extremely important for investors and financing resources).
Goals Outline your short- and long-term goals for production, sales, and finances. Include the public image you want your business to project and how you want customers to perceive your company.
Product or Service Describe your product or service clearly and concisely. If you oder a product, include visuals such as photos or diagrams. If you provide a service, explain exactly what you deliver. Include any research or testing results to show that your product or service is reliable and ready for the market.
Marketing Strategy Identify your target market; the group of consumers who will be buying your product or service. 1. 2. 3. 4. 5. 6. 7.
Establish that the target market has enough money to buy your product or service. Describe how you will reach and influence your target market. Describe your plans for marketing and advertising. Show distribution plans for the product or service. Establish a pricing strategy and compare prices to competitors. List long and short-term sales targets. Identify potential major accounts.
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Operating Strategy To develop your operating strategy: 1. 2. 3. 4.
Create an organizational chart that lists all job titles. Describe the location of your facility and the activities that will take place there. List the equipment to be purchased. Create a list of suppliers and their ability to deliver goods on time.
Financial Strategy To develop your financial strategy: 1. Include both current and projected financial statements. 2. List all startup costs. 3. Identify your funding sources—how much you will invest, how much others will invest, and how much you plan to borrow. Lenders pay close attention to owner investment, often expecting you to contribute 25– 50% of the needed capital. 4. Explain how funds will be used during the startup phase. 5. Show when your business will break even—both in dollars and time. 6. List and explain any significant debts, as well as money owed to you. 7. Compare your costs with those of your competitors.
Conclusion Summarize your business plan by highlighting the key points you want readers to remember. A well-prepared plan helps you organize and manage your business edectively, attract investors, and secure financing.
Tips on Writing Your Business Plan 1. Do your research first. 2. Prepare projected cash flow, income statements, and a balance sheet. 3. Write the Executive Summary last. 4. Draft each major section separately to simplify revisions. 5. Place resumes and detailed supporting documents in an Exhibits section. 6. Reference and clearly label all exhibits. 7. Have your plan reviewed by your attorney, accountant, banker, or other advisors. 8. Proofread carefully. 9. Present your plan in a clean, professional binder or folder. 10. Keep a log of who receives each copy and record any feedback.
Other Resources Entity
Website
Small Business Administration
http://www.sba.gov/business-guide/plan-yourbusiness
10 Steps to Start Your Business
https://www.sba.gov/counseling/ - business-guide
SBDC
www.tsusbdc.org
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IMPORTANT BUSINESS GUIDANCE
Legal and Professional Advice Do not fall into the trap of trying to save money by setting up your business without professional advice. The fees you pay in the beginning may be less than what you would have to pay to get out of legal tangles that only your lawyer or accountant could have foreseen. You should present your business plan to your lawyer and your accountant in the early stages of forming your business. Invest in the right guidance from the beginning.
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FINANCING Underfinanced, is one of the primary reasons small businesses fail. Before approaching banks or investors, develop a realistic estimate of your startup costs along with the amount you’ll need to cover personal living expenses for at least three months to a year. §
§
Building a strong relationship with your banker can be an invaluable asset. A banker can be a resource not only for financing but also for strategic insights about your market and practical guidance on starting a business. They can also oder ongoing support with retirement planning, accounts receivable, expansion financing, loans, and trusts. When seeking financing, keep in mind that most banks expect you to personally invest between onequarter and one-half of the total funds required before they will approve the remainder as a loan. If you are unable to make this contribution, you may be eligible for programs odered through the Small Business Administration (SBA) Loan Program.
Potential Funding Sources Funding Sources
Type of Assistance
Website
Brownwood Municipal Development District
Cash or In-Kind Incentives
www.BrownwoodBusiness.com
USDA Rural Development
Grants
www.rd.usda.gov
US Small Business Administration
Loans
www.sba.gov
Texas Department of Agriculture
Grants
www.TexasAgriculture.gov
US Grants
Grants
www.usgrants.org
Texas Small Business Credit
Loans
www.gov.texas.gov
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LOCATION Brownwood oders a wide variety of location options for your business. As you look at potential sites, consider factors such as proximity to your target market and home, accessibility, tradic volume, parking, rent and appearance. In addition to square footage needed, budget parameters, utilities and storage needs. If you plan to work with a real estate agency in finding a location, you should consider the following in order to save you and your agent time. § § § § § § §
What square footage will your business need? What is your monthly budget going to allow for rent and utilities? Your need for visibility: Does your business rely on foot tradic to succeed? What kind of storage does your business need? Lease renewal option: Understand whether and how you can extend your lease. Lease incentives: Look for opportunities such as free or reduced rent during the initial period. Included services. Clarify whether common area maintenance or other services are part of your monthly rent.
When you find the location, you are interested in: § § §
Will the utility supply be adequate for your business? Are the taxes and utilities included in the rent? Are maintenance and common area maintenance included in the monthly rent?
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ZONING PROCEDURES Zoning information for all property within the City is available through the Planning & Development Department. Every property is assigned a specific zoning classification, and each classification allows certain types of land use. Generally, business activities are not permitted in residential zones, and some commercial or industrial zones restrict certain business types as well. You must meet all zoning requirements before your business can operate. If the site you’ve chosen is not zoned for your type of business, you may consider applying for a zoning change.
Entity
Department
Address
Phone #
City of Brownwood
Planning & Development
501 Center Avenue Brownwood, TX 76804
(325)656-5331
BUILDING CONSTRUCTION or REMODELING Whether you’re constructing a new building or remodeling an existing one, your plans need approval from the City of Brownwood’s Planning & Development Department. Once your plans meet all building and fire code requirements, you’ll receive a building permit so construction can begin. Throughout the process, your contractor will schedule multiple inspections—sometimes as many as twenty— through the Planning & Development Department. After construction is complete and all final inspections are approved, the City will issue a Certificate of Occupancy, allowing you to odicially open your doors.
Entity
Department
Address
Phone #
City of Brownwood
Planning & Development
501 Center Avenue Brownwood, TX 76804
(325)656-5331
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PERMITS and LICENSES Certificate of Occupancy If you’re starting a business in an existing building, you’ll need a Certificate of Occupancy. If your business meets the zoning requirements, this certificate confirms that the building meets all of the City’s code standards. You can apply for it through the City’s Planning and Development Department. After you apply, inspectors from the City’s Inspection Odice and the Fire Marshal’s Odice will visit the building to make sure it complies with all applicable codes. Depending on your business type, you may need to make certain upgrades or modifications. For example, if you’re opening a food-related business, the City Health Department will also need to approve the space. It’s important to remember that it’s illegal to occupy or operate in a building without a Certificate of Occupancy. To review requirements or schedule inspections, visit City Hall or contact the Code Enforcement Odice.
Entity
Department
Address
Phone #
City of Brownwood
Planning & Development
501 Center Avenue Brownwood, TX 76804
(325)656-5331
Health Permit If you plan to operate a food-handling business, you’ll also need a food handler’s permit. You can apply for this permit at: Entity
Department
Address
Phone #
Brownwood/Brown County Health Department
Health Department
305 Booker Street Brownwood TX 76804
(325)646-0554
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UTILITIES It is important to plan ahead for all the details involved in opening the doors of your business. Utilities should not be overlooked. The information below gives some guidelines to follow when working with the various utility companies.
Electric Service Provider
Service
Website or Telephone
Oncor Electric Delivery
New construction service
(888)313-6862
Power to Choose
Electric service
www.powertochoose.org
Gas Service If you are in a building that had prior gas service, contact Atmos Energy prior to the day you need gas. If you are in a building that has never had gas service or in the planning stages of construction, contact Atmos Energy after determining the necessary need and location for gas. Provider
Location
Website or Telephone
Atmos Energy
Brownwood
(888)286-6700
Water, Sewer and Sanitation Service For water service, contact the Water Department at the City of Brownwood. A deposit is required on every water meter before service can be turned on. Provider
Location
Website or Telephone
City of Brownwood
501 Center Avenue
(325)646-5775
Internet Service Provider
Service
Website or Telephone
Astound Broadband
Telephone/Internet
www.astound.com (800)427-8686
Frontier Communications
Telephone/Internet
www.fronteir.com (325)466-7389
Echo Wireless Broadband
Internet
www.resourcenetworks.com
West Central Wireless
Internet
(800)695-9016
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ASSUMED NAME If you plan to operate your business under any name other than your legal name, you’ll need to visit the Brown County Clerk’s Odice. There, you can check existing records to make sure no one else in the county is already using the name you want. Once you’ve confirmed the name is available, you’ll fill out an application to register your business’s assumed name and pay the required filing fee. Note: Most sole proprietorships use an assumed name. Unless your business name includes your full legal name and clearly describes the nature of your business, you’ll need to register it with the County Clerk. For example: • “John P. Jones Lawn Mowing Service” is not an assumed name. • Names like “Jones Enterprises,” “John Jones Company,” “Lawnco,” or “Mowers’R Us” are considered assumed names and must be registered. Entity
Department
Address
Website or Telephone
Brown County
County Clerk
200 South Broadway Brownwood, TX 76801
(325)643-2594
For more information on registration, licensing and permitting in Texas, see: Entity
Service
Website or Telephone
Governor’s O8ice
Permits
gov.texas.gov/business/page/business-permitsoCice
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LABOR CONSIDERATIONS The Fair Labor Standards Act requires employers to maintain records on wages, hours and other items. The Department of Labor and Standards, Labor Law Division, is responsible for the administration and enforcement of labor laws and the prosecution of odenders. Information regarding labor laws may be obtained from: Entity
Address
Website or Telephone
US Department of Labor
525 Gri8in Square, Ste. 707 Dallas, TX 75202-5007
www.dol.gov (817)861-2150 (800)321-6742
STATE UNEMPLOYMENT INSURANCE Businesses that employ one or more people for part of the day in at least 20 diderent weeks during a calendar year, or that pay $1,500 or more in wages in a single calendar quarter, are required to pay State Unemployment Tax. The Texas Workforce Commission (TWC) collects unemployment insurance taxes and issues unemployment benefits to eligible individuals. To get a TWC identification number, employers must submit Form C-1, the Texas Workforce Commission Status Report. Once registered, employers file and submit unemployment taxes quarterly using Form C-3/C-4. The TWC tax number you receive will be used on all quarterly reports and must also be listed on your Federal Form 940 to show that you’ve paid the required state unemployment tax. For more information, contact: Entity
Address
Website or Telephone
Texas Workforce Commission
2202 Highway 377 South Brownwood, Texas 76801
www.twc.state.tx.us (325)646-1591
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WORKFORCE DEVELOPMENT Resources for worker recruitment and training
Workforce Solutions of West Central Texas Workforce Solutions is a one-stop employee solution, connecting job seekers and employers with a convenient online portal. Entity
Address
Website or Telephone
Workforce Solution of West Central Texas - Brownwood
301 Main Street Brownwood, Texas 76801
www.wfswct.org
Skills for Small Business Program Available for companies with fewer than 100 employees, this program oders training for full-time employees; up to $2,000 for tuition and fees per new hire; and up to $1,000 for tuition and fees per incumbent employee. Training is selected from courses odered by a Texas public community or technical college or the Texas Engineering Extension Service. Visit: https://www.twc.texas.gov/programs/skills-small-business
Workers’ Compensation Workers’ compensation is not mandatory in Texas, but you should seriously consider carrying such a policy, coverage is available through private insurance companies. The State Board of Insurance keeps a list of insurance companies qualified to write such policies. If you decide to carry workers’ compensation insurance, you must notify the Industrial Accident Board. Additional information may be obtained from the following agency.
Entity
Department
Address
Website or Telephone
Texas Department of Insurance
Workers’ Compensation Section
333 Guadalupe PO Box 149104 Austin, TX 78714-9104
www.tdi.texas.gov (800)578-4677
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AMERICANS with DISABILITIES ACT The Americans with Disabilities Act of 1990 (the ADA) has five sections or Titles that may adect your business. The first four titles set specific standards for nondiscrimination and equal opportunity in four key areas. Title V includes several administrative and miscellaneous provisions. Titles I through IV are briefly summarized below: Title I. Discrimination against qualified individuals with disabilities is prohibited in all aspects of employment including hiring, advancement, discharge, employee compensation and job training. Title II. Discrimination against persons with disabilities is prohibited in all services, programs, or activities provided by public entities. A substantial part of Title II addresses transportation provided by public entities. Title III. Adects three sets of activities that are pertinent to the built environment “Readily achievable” removal of barriers; alteration to all existing buildings must be readily accessible and useable to the maximum extent feasible; any new building or facility occupied after January 26, 1993, must adhere to the new construction of ADA. Title IV. The nation’s telephone companies are required to begin odering telecommunications relay services for individuals with hearing impairments or speech impairments. Learn more about the Americans with Disabilities Act here.
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LOCAL TAX REQUIREMENTS Real property is taxed by the City of Brownwood, Brown County and Brownwood Independent School District. Tax values are determined annually by the Brown County Appraisal District. Each taxing unit then sets its own tax rate. Tax statements are usually sent out in October, and taxes are due by January 31st. For current tax information visit: Entity
Website
Brown County Appraisal District
www.brown-cad.org/
Industrial District Agreement Industries located outside of the city limits may be required to have an Industrial District Agreement with the City of Brownwood for services such as water, sewer, fire and police protection. Contact the Brownwood Municipal Development District for more information.
Entity
Address
Website or Telephone
BMDD
501 Center Avenue Brownwood, TX 76801
(325)646-9600
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MARKETING YOUR BUSINESS Promoting your business is essential to its success. Especially when you are first open. The amount of exposure you need will depend on how your business attracts customers. Marketing can be anything from a newspaper ad or a flyer to a social media presence. Like every other step in starting your business, your marketing edorts should be carefully planned, it’s surprisingly easy to overspend. We suggest that you read SBA or trade publications on marketing or attend a short course at a local college or university. Spend the right amount on advertising: too much is an extravagance, and too little is dangerous. Be strict with your budget and tie costs to results. To do this, track your advertising’s edectiveness.
Below are five basic steps for creating a marketing budget: 1. 2. 3. 4. 5.
Decide what products or services you want to promote. Identify your target audience. Understand why this audience buys what you’re selling. Choose the most edective ways to reach them. Create a media plan and assign budget amounts to the marketing channels you’ve selected.
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CONCLUSION: WHAT ARE THE CHANCES FOR SUCCESS? To strengthen your business position in the community, you should consider joining the Brownwood Area Chamber of Commerce and other civic groups that interest you. A Chamber of Commerce membership will oder your business many benefits such as: § § § § § § §
Free exposure to potential customers in the Membership Directory/Buyers Guide. Business After Hours and Membership mixers which enable members to make valuable business contacts in an informal setting. The opportunity for business referrals. A weekly newsletter with information on events and business prospects. Your membership investment may be deductible as a business expense. A voice in local, state and national public adairs. The Chamber can assist with the opening of your business, i.e., groundbreaking and ribbon cuttings.
Starting your own business takes hard work, determination, and a little bit of luck. The more research, planning, management skills, and knowledge you bring to the table, the better your chances of success. After going through this booklet, you should have a clearer understanding of what it really takes to start a business. Beyond meeting state and federal regulations, you’ll need to invest significant time in planning and research before you ever open your doors. Of course, you’ll need the personal qualities and know-how required to run a business day to day. Hopefully, you have that winning combination that will set you on the path to success.
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ADDITIONAL RESOURCES Three of your most important outside resources will be your banker, attorney and accountant. There are also several other people and agencies who may be of assistance to you and your business. The Brownwood Area Chamber of Commerce can answer many questions about business trends and demographics of the Brownwood Area. The Brownwood Municipal Development District can be a valuable resource for starting businesses and business expansion.
LOCAL Resource
Assistance Provided
Website/Contact
Brownwood Municipal Development District
Incentives, Business Counseling
www.BrownwoodBusiness.com
Brownwood Area Chamber of Commerce
Business Trends
www.brownwoodchamber.org
Small Business Development Center (SBDC)
Business Counseling, Loans
www.tsusbdc.org/ Susan Banks
The Texas Comptroller of Public Accounts is responsible for the administration and collection of all State Sales and Use taxes.
STATE Resource
Assistance Provided
Website/Contact
Texas Comptroller of Public Accounts
Sales Tax
https://comptroller.texas.gov/ (800)252-5555
FEDERAL Resource
Assistance Provided
Website/Contact
Internal Revenue Service
Taxes
www.irs.gov (325)676-5709 | (844)545-5640
Center for Government Contracting
Assistance to register for selling goods and services to government entities
(325)670-0300
Northwest Texas Apex Accelerator Center
Assistance to register for selling goods and services to government entities
(806)742-7822
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NOTES
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BROWNWOOD MUNICIPAL DEVELOPMENT DISTRICT 500 CENTER AVENUE BROWNWOOD, TEXAS 76801 325-646-9600
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