Showing Business Operations

Texas requires that your business shows 12 continuous months of real, ongoing activity. That means no gaps—even a short lapse in operation can put your residency at risk. Think of this like keeping your business "alive" every single month with clear, trackable proof.

Here’s what the residency office will expect to see:

1. Manage Finances: Financial Transactions

This proves you’re earning and spending money like a real business.

• Invoices and Receipts: Regularly generate and save invoices or receipts for transactions with customers.

  • Number of Transactions: Aim for 3 to 10 transactions per month.

  • Revenue Amount: 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.

  • Sales Tax: You can read more here!

• 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.

Collecting invoices/sales tracker (this is a dropdown)

Please note: If you sell directly on a website like Etsy, Shopify, etc, there is no need to send direct invoices. Just upload each indivudal transaction you get!

It is important to separate your personal and business transactions. While you may use your personal Venmo (or other payment collection apps like PayPal or Cash App), you should deposit funds earned for your business into your Novo Business Bank account. To avoid confusion, ensure to transfer funds from these apps to your business bank account and not your personal account.

Once you have set up your Venmo and Novo Business Bank accounts, send invoices to your clients to act as documentation for your business. Your clients cannot pay through the invoices, which is why we needed to set up Venmo. To demonstrate the management of your business, you will need to sell things and get paid (try to shoot for 5+ transactions per month). You should upload these transactions within your Sales Tracker too.

Please Note: You should have activity in each of the 12 months that you will operate your business. From a financial point of view, this will typically be screenshots of invoices uploaded into your portal.

Step-by-Step Guide

First Time Novo Set-Up

1. After your Novo application is approved, navigate to your Venmo app

2. Click "Me" on the bottom right side

3. Click the Gear on the top right side

4. Hit "Payment Methods"

5. Select "Add a bank or card"

6. Click "Bank"

7. Click "Next"

8. Click "Continue"

9. Search for "Novo" in the search box and select it

10. Proceed to enter your account details

11. Your username will most likely be the email associated with your Novo account

12. Don't be surprised if it links to a "Middlesex" account; this is the same as Novo

13. Transfer transactions from Venmo to Novo

14. After each transaction, transfer funds like you normally would, but make sure to enter the correct $ amount and bank location (Novo) on the transfer page.

How to Send Invoices

1. Navigate to Novo and log in

2. Hit "Invoices" on the left-hand side panel

3. Click the "New Invoice" button on the top-right side

4. Input invoice details

   1. Customer Details: Add a new customer and enter the details

   2. Invoice Number: Must be 4 unique digits and may not include letters

   3. Send: Immediately

   4. Due: Upon receipt

5. Input billable Item details: Add item name, item price, and quantity

   1. Tax: Add sales tax

      1. Generally, if you are selling a tangible good to someone in Texas, include it

      2. Generally, if you are selling a tangible good to someone not in Texas, don't include it

      3. Generally, if you are selling a service to someone in Texas, don't include it

      4. Under "Other Details" please include a note that specifies if you did or did not include sales tax

6. Under “Payment Methods" select "Bank Transfer (ACH)"

   1. While the invoice will have your ACH information, your customer won't be able to pay you online, so ensure that you are paid through alternative means (Venmo, etc.)

   2. While you may connect a business PayPal/Venmo profile (this is different than personal), these accounts charge additional fees and have no tangible benefit other than direct Novo integration. We recommend you avoid being paid through Novo but always deposit into Novo afterward.

7. Under "More Options" please click check the “Email me a copy of this invoice” box

8. Send invoice by clicking “send”

9. Upload the copy of the invoice into the “Manage Finances” section of the portal

10. You can mark as paid if you are paid through Venmo

Reoccurring Financial Tasks

1. For each business transaction, send an invoice (Check How to Send an Invoice)

2. Every time you send an invoice, log your payments and deposit the funds into your business bank account (See steps 13 & 14 of First Time Set-up)

3. You can still collect payment if your bank is still pending, but deposit the funds immediately after your bank is approved

4. If you receive $5 from a friend for personal expenses and $7 from a client for services rendered, transfer $7 to your Novo Business Bank account, and you can transfer the remaining $5 to your personal bank account if desired. Make this transfer after each transaction

5. Continue accumulating funds

6. We do not recommend taking your funds out of the business bank account. If you are in a unique situation and need to, please write a paragraph describing the reason why you need it, the date you are taking it, and what account it is being transferred from and to.

7. Upload a PDF of your invoice and transaction confirmation into your InstateMe portal

2. 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

You may have heard it before, but it's worth emphasizing: customers are at the core of every business. Over the next 12 months, you'll engage with various types of customers.

Please Note: You should have activity in each of the 12 months that you will operate your business. From a customer point of view, this will typically be screenshots of emails, texts, and video conference meetings uploaded into your portal.

Please Note: Feel free to employ any template of your choice for the agreement, in addition to the recommendation provided below. The specific template you opt for is entirely up to you and will not impact the outcome.

Step-by-Step Guide

1. Document any important correspondence with customers

   1. Who are your clients? Friends, family, peers, strangers, etc

   2. What are you talking about? Sales, marketing, providing services, strategy, etc

2. Upload PDF screenshots to your InstateMe portal

3. Confirm if you want to have standing contracts with clients

   1. This is not a requirement, but if you have standing communication or invoices with clients, it may be a good idea to have a standing “Independent Contractor Relationship Contract”

   2. If you are going to have this relationship with a particular client at a particular interval, please download the (attached contract). This may span multiple months

4. Upload a PDF of your contract to your InstateMe portal

Independent Contractor Agreement.docx

Download DOCX • 23KB

3. 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

For your business to be seriously considered, you’ll need to provide tangible value for your customers while providing proof for the residency office. Here are some examples to create value and document yourself doing so.

Please Note: You should have activity in each of the 12 months that you will operate your business. From an operational point of view, this will typically be screenshots of you working on the business uploaded into your portal.

Step-by-Step Guide

1. If you are providing a product, take a picture of yourself during production

2. If you provide a service, take selfies during your work to show yourself in action

3. If providing some form of delivery, consider taking a photo of yourself traveling to a client

4. Upload all documents and pictures to your InstateMe portal

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

Continuing to deposit funds into your bank account remains of utmost importance. Remember to log in monthly and download your statements to ensure readiness for year-end preparations.

Please Note: After you invoice a client and are paid, please remember to deposit the funds into your bank account.

Step-by-Step Guide

1. Navigate to your Novo account and Log in

2. Select “Statements” on the left sidebar

3. Select the current year

4. Select the current month and hit “Download”

5. Rename the file "{month}, {year}" like "01/2025"

6. Upload the PDF of your current statement into your InstateMe portal

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.