How to Start a Construction Company in Texas

by Alexander Cequea; Updated September 26, 2017
Liability insurance is a must for construction companies.

Texas construction companies need to address numerous concerns before launch. Some steps may be similar to starting any business in the United States but the licenses and permits needed for construction work is based on your locality in Texas as well as the job types you wish to launch. Because of clients' higher expectations for skilled laborers, you need to plan and organize carefully to satisfy your clients’ needs.

Write a business plan. Your business plan must include the overall idea for your company; identify your target market, market trends, preferences and available growth opportunities; differentiate your products by quality, brand or price; and determine the necessary funds and their sources. Check if you qualify for any financial grants from Texas government or your local county.

Choose your business structure. You can select sole proprietorship, general partnership, corporations, limited liability company, limited partnership, limited liability partnership or association, based on your requirements and the advantages of each structure.

Determine a name for your construction company; search to ensure it is not used by any other company and register it with the Texas secretary of state, if it is different from your personal name.

Obtain an Employer Identification Number, or EIN, from the Internal Revenue Service website at IRS.gov in order to identify your company as an entity for tax purposes.

Register your business with the Texas Department of Revenue and obtain a business tax number. Also obtain a sales tax permit. This applies to individuals, corporations, firms, partnerships and all legal entities. You might need to pay franchise tax in case you’ve registered your business as a corporation or LLC.

Obtain a license from Texas Department of Licensing and Regulation if you want to deal with HVAC, fire sprinkler systems, well drilling or pump installation or perform plumbing or electrician jobs. You will need to pass certain exams, finish certain educational courses or training or gain experience for each type of license. Contact the Texas Board of Architectural Examiners to get a license for architect, landscape architect or interior design jobs. Similarly, you need to contact the specific departments for different permits.

Obtain your city and county licenses in addition to state and federal licenses. HVAC contractor's license fees cost about $250 (as of September 2010), and include the application fee, exam cost and license cost for one year. Other licenses such as plumber's licenses and fire sprinkler's system licenses cost around $600 or more (as of September 2010), depending on the type of service you'll be offering.

Hire employees after checking on their qualifications, background and licenses. Obtain worker’s compensation insurance and follow laws related to employee practices. File for unemployment insurance tax and Texas state unemployment tax with the Texas Workforce Commission.

Obtain all necessary insurance policies with the required coverage. The Texas Department of Insurance provides health and safety resources for employers and employees that support the Texas workforce to reduce the event of occupational injuries and hazardous exposures. They can help you decide the right type of insurance for your company.

Market your business by launching your own website, joining construction-related associations and the local chamber of commerce.

Resources

About the Author

Alexander Cequea has been writing since 2008. He is an activist, speaker and film producer whose work has been featured in "Enlightennext Magazine" and the Environmental News Network. Cequea is currently producing a documentary about sustainability and consciousness. He has a Master of Business Administration in sustainable business from Maharashi University.

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