How to Start a Driving School in Texas: A Step-by-Step Guide

Compared to many states, Texas makes it relatively easy to establish a driving school. The licensing process is clearly laid out in the regulations, and the regulations themselves do not lay a heavy burden on your operations.

Texas driving schools may offer classroom instruction, behind-the-wheel training, or both. It will be up to you to create the program which best meets your needs and those of the people in your potential market.

How to open your driving school in Texas

• Schools need to be licensed, but the owner does not need to be a driving instructor.
• Driving instructors require a separate license and training.
• Your location may be just about anywhere, but you may not operate your driving school exclusively out of your home—you must have an office in a separate location.
• You will need to retain student records for at least three years following the end of instruction.
• You must have written contracts with students; Texas provides a sample.
• Texas allows driving schools to teach the state-required curriculum; students under 18 must have 32 hours of classroom instruction, 7 hours of observation time in a vehicle, and 7 hours behind-the-wheel.
• You may offer the 6 hour adult education course for new drivers aged 18-24.

Driving School Licensing and Requirements

General requirements

To operate a driving school in Texas, you will need to be licensed by the state. Licenses are valid for 1 year from the date of filing with the Texas Department of Licensing and Regulation (TDLR) . Applications must use the Departments forms, which will be linked below.

Be guided by the Checklist the TDLR provides. It will ensure you fulfill your obligations.

Your application packet must include:

• A completed application form–which included many of the forms noted below..
• A bone or other form of security in the amount of $10,000 plus $5,000 per branch.
• A staff roster.
• A list of vehicles and copies of the insurance declarations pages noting coverage for those vehicles.
• The motor vehicle fleet form (in the packet).
• A school course list.
• Your curriculum if you have created your own.

The Texas Regulations for Driving Schools are fairly straightforward.

Texas requires the following minimum liability insurance coverage:

• $30,000 per injured person, up to $60,000 per accident.
• $25,000 property damage per accident.
• Uninsured motorist coverage.

If you have employees, you must carry workers’ compensation insurance covering them–and you–in the event of injury while on the job.

Driving School Owner’s License

Texas imposes few personal requirements to receive a driving school owner’s license. Your business itself may be a sole proprietorship, partnership, corporation, or limited liability company. You will have to provide information on all owners of the driving school.

Driving Instructor’s License

While no specific requirements are set for driving school owners, instructors must demonstrate qualification before they receive a license from Texas. The application form outlines the process for getting the instructor’s license. The requirements for a driving school instructor’s license in Texas include:

• Hold a high school diploma or the equivalent.
• Possess a valid driver’s license which has not be revoked or suspended in the past three years.
• Submit to a national criminal background check, and provide fingerprints to the Texas Department of Public Safety.

Driving instructors have a variety of titles in Texas. To serve as the teacher of record, you must possess a Texas teaching certificate and an official transcript showing

• 15 semester hours of driver and traffic safety education for a “supervising driver education teacher” title, or
• 9 semester hours of driver and traffic and safety education for a “driver education teacher” title.

These titles give you the most flexibility. The other titles include teaching assistant, teaching assistant-full, and supervising teaching assistant-full. The latter two allow you to assist in the classroom, but instruction must be endorsed by the teacher of record.

Location

You are generally free to establish your business anywhere you see fit–meeting the requirements outlined below. You can choose to have classroom space, or you may conduct classroom driver education at off-site locations, including local public or private schools. Your contract with the school should be included in your license application.

Your location and facilities must be approved by the TDLR before you open. You may not base your office out of your residence. Your space must be appropriate for your offerings, and comply with local and space zoning, housing, and safety ordinances.

Classrooms must provide adequate space for students, and no class may hold more than 36 students. Adequate lighting and comfort, as well as writing facilities, are required. Your school should not be located in a building which houses a business which either requires exclusion of persons because of age or is adult-oriented–or a bar.

You will have to provide notice of the name, mailing address, and phone number of the Department in case of complaint. It should be on the contract, and you probably should also post the Department’s sign in your office. While it doesn’t seem required, displaying your license, as well as those for your instructors, is probably wise, also. You will have to post your most recent state inspection results.

You will need a secured area in which to store certificates of completion. The TDLR recommends a safe, locked server room, key card-only store room).

Don’t ever give a student or parent the impression that your instruction guarantees receiving a driver’s license–you may mention your pass rate.

Records and Contracts

You will need to keep student records for at least three years. For  twelve months, they must remain at the site of instruction. Thereafter, all records may be kept in any location accessible to the school owner.

Records include

• Timecards of instructors
• Schedules reflecting duties and instruction times for your instructors which correlate to the timecards.
• Daily attendance records, indicating presence/absence, makeup status, date, and time

You need to create a student record which contains the following information:

• Name and classroom address
• Full name and contact information of the student, including date of birth.
• Date of instruction termination
• Type and license/permit number
• Dates and times of instruction–both classroom and behind the wheel
• Each behind the wheel lesson description and grade
• Grades earned
• Instructional hours
• Initials of each instructor providing either classroom or behind-the-wheel instruction.
• Beginning/ending dates of the classroom phase.
• Signatures of student and instructor the the record is accurate.

You must have written contracts with your students. The contract must contain a range of information which adequately describes the contract between the school and student.

The Driving School Curriculum in Texas

Texas mandates the specific topics covered by the curriculum for every driving school, both for the in-class as well as the behind-the-wheel portions of driver’s education. You are, of course, free to add information.

Instruction is limited to five hours per day, and classroom instruction may not exceed 2 of those 5 hours. The 3 hours of in-car instruction may include no more than 1 hour of behind-the-wheel instruction. The other two hours may be in a simulator or in multicar range instruction.

Your Texas driving school must have a makeup lesson policy which meets the following requirements:

• In-class makeup sessions must cover the same lesson missed by the student.
• Make-up lessons, allowing the student to complete the work outside of classroom time, must be prepared and submitted to the Department along with your curriculum.

Texas Driving School Classroom Instruction

Your classroom course must last for at least 32 hours, and your course must be organized as follows:

• You are allowed 5 minutes’ break for each hour, and no more than ten minutes of break can be accumulated (thus you could offer a 4-6 pm session with a 10 minute break).
• You may have no more than 36 students in a given section of the class (although you could have two separate sections running consecutively or at the same time if you have a second classroom).
• Videos, recordings, guest speakers, and other media may take up no more than 640 minutes of class time. Powerpoint slides or other similar presentational media (Prezi) are instructional aids and thus do not count as restricted media.
• Self-study assessments may be used, but may take up no more than 25% of class time, and must be administered to all students together.
• You should refer to the regulations to make sure your course meets all state requirements

If you are writing your own driving school curriculum, Texas expects the classroom portion of the course will cover the following topics; you will have to provide an outline of your curriculum as part of your application.

One way of making sure your curriculum meets requirements is to follow the Texas Education Agency’s Program for Organized Instruction. The POI has a VERY detailed breakdown on required topics and times to be alloted to them.

Your course must have the following modules:

• Knowledge of the Texas motor vehicle and traffic laws
• Driver preparation before driving
• Vehicle movements
• Driver readiness including fatigue and aggressive driving
• Risk reduction
• Environmental factors
• Distractions
• Drugs and Alcohol
• Adverse conditions
• Vehicle requirements
• Consumer responsibility and organ donation
• Personal responsibility

Behind the Wheel Driving Instruction in Texas

Your in-car phase of instruction must include 7 hours of student driving behind-the-wheel and 7 hours of in-car observation. You may provide one-on-one in-car instruction, but parents may opt-out freely.

In addition, students will need to complete an additional 30 hours of driving, including 10 at night, with a licensed supervising adult who is at least 21 years old and has held a driver’s license for at least one year. Texas provides a guide to parents and others for these 30 hours, and parents of minors will have to certify the log, regardless of the supervising driver’s identity. No more than ONE hour of supervised driving in a day counts.

Four hours of simulator time may be substituted for 1 hour of behind-the-wheel and 1 hour of observation time. 2 hours of multicar range driving instruction may be substituted for 1 hour of behind-the-wheel and 1 hour of observation time. A minimum of four hours of behind-the-wheel instruction MUST be provided.

Adult Driver Education

Driving schools in Texas may also offer a six hour course for new drivers aged 18-24. You will need

• State approval for the course.
• Contracts between the driving school and student.
• Maintain student records.

The six-hour course must cover the following topics (with minimum times required by the state):

• Introduction and the License (30 minutes)
• Right-of-way (50 minutes)
• Traffic control devices (40 minutes).
• Controlling traffic flow (40 minutes)
• Alcohol and drugs (50 minutes)
• Cooperating with other roadway users (50 minutes)
• Managing risk (50 minutes)
• Progress assessment (25 minutes)

Commercial Driver’s License Instruction

Providing instruction for students pursuing a CDL in Texas generally follow those for the regular driver’s license. In this section, we’ll note the key differences.

Information

Truck driver training instructors must complete a 40 hour instructor development course, which covers certain set topics:

• Techniques of instruction
• Personal factors affecting truck drivers
• Texas motor vehicle laws
• Driving procedures
• Physics and vehicles
• Highway effects
• Automotive systems
• 8 hours of behind-the-wheel safety training
• Specialized training

During your behind-the-wheel portion of CDL training, you may not allow more than four persons, plus the instructor, to be in the vehicle.

The process for applying is outlined in the Texas Workforce Commission’s Original Application checklist. The forms needed are all available online.

Starting a Small Business in Texas

Your driving school is not just subject to the requirements for driver’s education in Texas. You also need to establish your Driving School as a small business, and have to consider a number of factors. The form of business you take up, as well as the procedures, are appropriate topics of conversation with your lawyer and accountant. The considerations we offer here are not legal advice, but should provide you with things to think about as you set up your business.

Business Registration

All businesses need to register in Texas, especially the business name—the “doing business as” certificate. Banks may not be willing to set up your account until you have that DBA form. We’ll include where to register in the business structures below.

You will also need to obtain a Federal Employer Identification Number. Banks may need it for your business accounts, and you may be wanting to employ people. To obtain an EIN, go to the IRS website and complete the application form you find linked there.

You will also need to research whether you have any tax responsibilities to Texas or any county or local government.

Business name

Before you get going, you’ll want to check to see if the business name you want is in fact available in Texas. You can search the Texas database, as well as visit the office of the county recorder.

Once you know your business name is available, you can reserve it online with the Secretary of State–if you’re forming a corporation or LLC.

Texas provides a short guide to forming a new business in the state; it should not replace conversations with your accountant or attorney.

Sole Proprietorship

Owning your own business is the easiest one to set up, but also may open you to liability concerns. As a sole proprietor, your business is simply part of your life. You keep a separate set of books, and complete a Schedule C for your 1040 form every April.

Sole proprietorships can expose the proprietor for full liability, even with insurance. That may mean that if you are sued, you may lose your home and property, as well as your personal bank accounts and other assets. This risk may not be worth the ease and independence.

In Texas, the big step you have to take is to register your Assumed Business Name with the clerk of the county for each county in which you have a business premise. Each county uses its own form–stop by the clerk’s office to get it. While you’re there, you should also search for the name in case someone else has already used it.

Corporations and LLCs

You may set up a full corporation (“Inc.”) as your business structure. Corporations limit your liability for loss to your investment in it, as a general rule (although banks may require you to be obligated personally if you take out a loan to get your business going). This form of business keeps your personal assets safe.

As an owner of a corporation, you’ll have to set up your driving school consistently with the rules for corporations in Texas–those rules can be found at <this state run website>. You’ll also have to decide whether to be an S Corporation or a C Corporation. Generally, the S Corporation form is set up for small businesses. It allows income and taxes to pass through to the owners. You will want to discuss these forms with your attorney and accountant.

You may be able to set your driving school up as an LLC in Texas. The LLC form provides the same limited liability as a Corporation, but do not have to comply with the corporate formalities most states require, including items like bylaws, required stockholder meetings, and minutes (although minutes of meetings are probably a good idea).

You’ll have to discuss the advantages and disadvantages for the LLC with your attorney and accountant.

Both Corporations and LLCs file with the Secretary of State. In addition to name reservation, you’ll need to submit the following.

• Corporations submit Certificates of Formation for a For-Profit Corporation
• LLCs submit Certificates of Formation for an LLC.

Now What Do I Do?

Once you’ve complied with all the legal requirements to be both a driving school and a small business in Texas, you need to get students.

Getting students requires marketing—largely on the internet. You will need the following systems set up to obtain students:

• A website—focused on the types of students you want to attract, and aimed at your locality.
• The website should also include a blog, which allows you write about a variety topics and engage in Search Engine Optimization—which will drive traffic to your site.
• A Facebook page, linked to your website, to become noticed and drive traffic.
• Getting testimonials from successful students.

Marketing is something you will have to devote time to. DrivingSchool.Marketing can help you get the best bang for your marketing buck.

Conclusion

Disclaimer: This page is part of DrivingSchool.Marketing’s series of state and provincial pages designed to help entrepreneurs like you start driving schools. States change their regulations, or the web pages they host their forms. While we believe these rules are accurate as of the date of publication, we cannot guarantee full accuracy. Please let us know if you spot any problems.

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Josh Meah

Josh is the CEO of DrivingSchool.Marketing. His goal is to be the marketing and business development partner of driving schools around the world, helping them become thriving businesses while also expanding general awareness for the importance of traffic safety standards and education.

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