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How to Start a Business in Dallas

It's one of the biggest U.S. cities for business, and nearly 80 percent of Dallas companies are small businesses. Here's how to break in.
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Dallas isn't all giants. Nearly 80 percent of companies in Dallas are classified as small businesses, according to the Dallas Office of Economic Development. That's not small change: Dallas-Fort Worth metro areas grew faster than any region in the country last year, according to an estimate from the U.S. Census Bureau. And it's home to the 2010 Inc. 500's fastest growing company, Ambit Energy.

Dallas is connected to the world through several interstate highways and runways, including the Dallas-Fort Worth International Airport, the world's third-busiest airport. "The many airports, combined with a solid highway system, and an International Port of Entry in Houston (a four-hour drive away) helps with our supply chain logistics.  This means we can serve most of the country with products within two-to-four business days," says Inga Bowyer, president of GermanDeli.com, an online specialty-food retailer.

Entrepreneurs also love that there is no local or state income tax, meaning profitability can come easier for some businesses. Dallas is also a conference hub, with plenty of convention space – and reason for visitors to stick around. It's full of cultural attractions including the Morton H. Meyerson Symphony Center designed by Pritzker Prize- winning architect Ieoh Ming Pei.

Starting a Business in Dallas: Find an Ideal Location

Although Dallas's downtown is the metropolitan area's primary business district, industry and storefronts are scattered throughout the city, including Preston Center, Uptown Village, and Koreatown according to Lee McKinney, assistant director of the Dallas Office of Economic Development.

The downtown area has seen a lot of redevelopment, which has helped several distinct neighborhoods – such as West End and the Arts District – become destinations in their own right. Other neighborhoods being developed to improve economic opportunity and neighborhood conditions through collaboration and local public-private partnerships include Lancaster Corridor, Cedars, and South Dallas-Fair Park.

Fort Worth has seen a good deal of entrepreneurial activity in areas like Colleyville, Southlake, and Grapevine, according to Tom Smith, vice chairman of the Fort Worth chapter of SCORE, a national counseling group for entrepreneurs. This activity is expected to continue particularly with the 2011 Super Bowl XLV slated to be held at Cowboys Stadium.

Dallas is continuing to redevelop by targeting shares of city bond funds for capital improvements that will support additional private investment. The Dallas Office of Economic Development has identified several opportunity areas to invest capital improvements including: Southwestern Medical District, Skillman Corridor-LBJ Station, and the Galleria. Also targeted will be the Asian Trade District, which is Dallas' most well-known international business district focusing especially on Asian imports.

The Southwestern Medical District is the area's center of health care and education. The city's "forwardDallas! Comprehensive Plan" envisions this area as a campus district with an urban core, mixed-use transit center running through the middle. More than $2.7 million of capital improvements have been invested in the Skillman Corridor-LBJ Station. The Galleria area is home to a mall bearing its name as well as Valley View mall, FedEx Kinko's, Susan G. Komen for the Cure, and Broadlane, which each have headquarters here.

One up-and-coming area is the Design District. Three new urban residential buildings have gone up since 2009, which makes it a potentially great customer base for a small business. According to a recent article in The Dallas News, the design district is going to be a new downtown.  "I'm not moving anywhere soon," says Lars Hundley, president of Clean Air Gardening who recently purchased a building for his company in the area.

Dig Deeper: How to Choose a Site for Your Business

Starting a Business in Dallas: Know Your Zoning

Before choosing a location, it's necessary to consider area zoning restrictions, area entrepreneurs say. And in this sprawling metropolis, it's important to remember every individual town and municipality has its own zoning regulations. They can be a deterrent for some types of businesses.

"Strict zoning regulations in downtown Dallas may be an incentive to move to other areas where zoning regulations may not be as strict," Smith says.

Zoning rules can impact what type of business can be operated there, whether or not food can be served, how many rooms you can have for rent, where can you hang a sign, and how many parking spaces you must have. 

For Andrea Hundley, founder of Bailey's Uptown Inn, a bed and breakfast, zoning mandates dictated a lot about design and construction of her building. "Zoning impacted how wide the sidewalk has to be, how far the building can be from the street, how tall the building can be, and how much of the lot can the building cover," she says. "They even regulate the landscaping and how many trees you must have."

Wendy Collins is opening Bubble, a new lifestyle retail store set to launch in December 2010 on Lovers Lane in Bluffview. She was originally planning on opening a restaurant but as soon as she got the construction permit she realized that it wasn't zoned for that. "Lovers Lane is like patchwork – you can dine in some places and some places you can only take out."  But as an entrepreneur she knows that it's important to both be knowledgeable and to go with the flow. "We could have let it break us but we said, 'no, we are just going to go in another direction.'" She reworked the business model and plans on selling home cooked meals, aprons, spices, organic baby food, and granola.

Restaurant owners need to mind the area's strict liquor sales-and-service regulations. Restaurant owners "should just stick to communities that don't have restrictive liquor laws," advises small-business consultant Randy Moon.

"Start early. There may be a delay. It took us six months to get the permit," says to Jamie White, owner of Rouge Moderne Bistro, located in nearby Flower Mound.    

Dig Deeper: How to Purchase Commercial Real Estate

Starting a Business in Dallas: Get Certified

In Texas, there are myriad certifications that can help your business get recognized – if you qualify. They don't cost any money at all, and are relatively easy to obtain. Just be prepared to fill out the paperwork.

It's worth checking if any qualities of your business open up the possibility of certification. For example, women minority owned businesses are able to take advantage of several certifications, such as one through the North Central Texas Regional Certification Agency. That certification as a "Disadvantaged, Minority and Woman-Owned Business Enterprise" can help a company land business with local government agencies and plenty of large companies.

Another beneficial certification is the State HUB, which stands for Historically Underutilized Business and is issued by the State of Texas Comptroller's Office.  The state supported agencies and state supported universities also have a goal of spending money with women or minority owned business.  The HUB certification helps these agencies to identify approved vendors to meet their goals.

It's important to remember that just getting the certificates is not the only key to success. "In average, over the years my business has increased by just over one third, but as a business you also need to have the best overall value.  It's not just a slam dunk because of the certifications," says Colinda Torrez, president of Torrez Paper Company a distributor of paper products that's based in Dallas.

"Getting government contracts is about getting your face seen – just go to all the conferences by the state, which are almost all free," Torrez says.

Dig Deeper: How to Become Certified as a Minority-owned Business
Dig Deeper: How to Become Certified as a Woman-owned Business


Starting a Business in Dallas: Secure Funding

As the small-business lending outlook improves, in the Dallas-Fort Worth area a small-business owner is likely to have plenty of banks, large and small, to choose from. But it's also smart to consider a spectrum of financing options – some of which are unique to the area.

The Texas Enterprise Fund was established at Governor Rick Perry's request, in 2003, and has been renewed by the legislature several times since. Its goal is to help attract new jobs and investment to the state. Keep in mind that the fund is used only as a final-incentive tool in situations when a single Texas site is competing with another viable out-of-state option. 

Projects that are considered for the TEF must fit a number of requirements, including being financially sound, providing a significant number of new high-paying jobs and include community involvement. In addition, the applicant's business sector must be an advanced industry that could potentially locate in another state or country.

The Southern Dallas Development Corporation, a nonprofit started in 1989 to leverage private debt and equity, promote access to capital, facilitate job creation, and foster economic development, awards several loans.  The SDDC Community Development Loan Fund gives loans as much as $300,000 to businesses in federally designated census tracks and that have operating results for 18 months.

The South Dallas-Fair Park Trust Fund helps businesses in South Dallas Business area if they fulfill the following objectives: housing and community development, community service programs to provide job related and human service assistance.

Dig Deeper: How to Make it Big in Texas

Starting a Business in Dallas: Additional Resources

  • Seven Business Assistance Centers help entrepreneurs with business plan development, strategic plan development, marketing research, and marketing plans.
  • The Tech Forth Worth business incubator provides help to entrepreneurs who are working on technologies that will impact the environment, empower the community and improve healthcare.  Entrepreneurs can enroll in a number of programs including the incubation workshop, where they can get hands on help, shared space to work in and access to wireless Internet access, white boards, training tables, and a business library.



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