Starting and operating a business in Texas is a common pathway for students seeking to establish residency for in-state tuition. To meet state requirements, students must demonstrate that their business is actively owned and operated for 12 months without any intent of liquidation. This is the most crucial part of the residency process, and robust operation is required to meet the standards for in-state tuition. This means showing clear evidence of ongoing, legitimate business activity throughout the residency process.
You cannot have any gaps in your operation over the 12 months, as even a small lapse significantly increases the risk of not qualifying for in-state tuition.
Here’s how you can showcase the operation of your business effectively:
Manage Finances: Financial Transactions
Evidence of financial activity is one of the most critical ways to demonstrate your business operations. This includes:
Invoices and Receipts: Regularly generate and save invoices or receipts for transactions with customers.
Number of Transactions:Â Aim for 3 to 10 transactions per month.
Revenue Amount:Â Charge an appropriate fee for the goods or services you provide, ideally averaging between $250 and $1,000 per month but really depends.
Transfers: After each transaction, promptly transfer the funds to your LLC’s bank account. Ensure that each invoice has a corresponding deposit on your bank statement, so we can accurately link them for record-keeping purposes.
Redact: Black out the names of individuals if names are listed.
Expense Records: Track business-related expenses, such as supplies, advertising, or transportation costs.
Payment Processing: Use a business bank account or payment platforms like Venmo or PayPal linked to your LLC's bank to clearly separate personal and business transactions.
These records serve as tangible proof of your business's financial activity and legitimacy.
More info on collecting invoices/sales tracker
Customer Management: Communication Records
Another key aspect of demonstrating a functioning business is maintaining open communication with your customers. You can provide evidence of:
Customer Emails or Messages: Save email chains, direct messages, or chat logs with customers related to inquiries, orders, or feedback.
Contracts or Agreements: If applicable, keep signed agreements with clients for services or sales.
Marketing and Advertising: Show outreach efforts like social media posts, promotional emails, or advertisements to demonstrate how you attract and engage customers.
This documentation shows that you are actively managing your customer relationships and running a legitimate business.
More info on collecting communication records
Provide Value: Evidence of Your Product or Service
Clearly showcasing the goods or services your business provides is essential. Consider including:
Product Listings: Keep records of items listed for sale on platforms like Etsy, Facebook Marketplace, or your own website.
Service Documentation: For service-based businesses, maintain records of work completed, such as project summaries, deliverables, or photos of your work.
Customer Reviews or Testimonials: Collect and share positive feedback from customers to demonstrate the value your business is providing.
This evidence ensures that your business is seen as adding tangible value to your customers.
More info on collecting evidence of work
4. Bank Statements: Monthly Financial Summaries
Using a dedicated business bank account is a crucial step in proving ongoing operations. Ensure you:
Deposit All Business Income: Funnel all payments for your products or services into your business account after each transaction.
Generate Monthly Statements: Keep monthly bank statements that reflect consistent activity, including deposits, withdrawals, and expenses.
Please rename the file (mm, yyyy) like 5/2024
Redact the names of individuals if names are listed
Highlight Business-Only Transactions: Avoid using this account for personal expenses to maintain clear financial separation.
Regular bank statements provide a clear picture of the financial health and activity of your business over time.
More info on collecting bank statements
Final Thoughts: Show Ongoing, Intentional Operation
To meet Texas residency requirements, it’s not just about starting a business—it’s about operating it with consistent intent and effort. By managing your finances, engaging with customers, demonstrating the value of your product or service, and maintaining detailed monthly records, you’ll create a comprehensive case that clearly demonstrates your business is active and thriving.
With this approach, you’ll be well-prepared to prove your business operations and take one step closer to securing in-state tuition.