Many people dream of going into business for themselves. However, there are some states that are considered a better for making this leap than others. Nevertheless, the criteria that determine which states are more business friendly centers around many factors that range from taxes to cost of living. However, even with these criteria, Texas is a shining Lone star when it comes to starting a business. This is why the reasons for the Texas boom in small businesses is no surprise.
Texas Business Facts
Texas ranks high as one of the best states to start a business. In fact, Business Insider rated it the 4th best place to start a business. The number of strong startups was among the reasons listed, as well as the fact that it has the 4th highest rate of entrepreneurs. In addition, the cost of living is reasonable, which adds to the long list of reasons why Texas is favored.
What Makes a State Great?
There are many factors that make a state great for small business. These factors cover all the bases. Every state has a business ecosystem. The term ecosystem is another savvy way of referring to different areas of business. There are certain specific areas that comprise a state’s business ecosystem. They include;
- Startup Activity
- Business Survival Rates
- Available Employees
- Education Level of Potential Employees
- Climate of Business Tax
- Cost of Living
These areas determine how well a small business will fare in a particular place. Every factor plays a role in the survival of a business.
One of the most obvious benefits of starting a business in Texas is that texas has no personal income tax. Furthermore, Texas has no corporate income tax and no state property tax either. This makes Texas very popular for small business owners that want to keep more money in their pockets. Instead, the bulk of tax revenue from the state comes from sales and franchise taxes. Texas is also very business friendly. Its regulatory environment is not invasive for businesses. Business owners don’t have to worry about a lot of red tape.
The Benefits of Population Growth
Another big plus is the abundance of rapidly growing metropolitan areas that fuel economic activity. Dallas, Houston, Austin, and San Antonio can attest to this fact. New residents increase the demand for services and products that small businesses offer. Houston grew its population by 101,711 bringing its total to 2.2 million between 2010 and 2014. As a result, there have been more start-ups as well as more business opportunities. Austin welcomed 86,719 new residents to its city between 2010 and 2014, whereas San Antonio welcomed 92,355 new residents during that same period. Growing cities fuel small businesses as well as the economy.
Many small business owners in Texas said the demand was strong for their businesses and services. However, finding qualified employees with the experience and training needed to perform the job was difficult. Statistics support this concern. The U.S. Bureau of Labor Statistics reports that Texas lost 175,000 people from the Texas workforce from January to September of 2015. However, despite this challenge, Texas continues to be a state ripe for anyone who wants to go into business for themselves because the pros far outweigh the cons.
Texas has a strong economy and a very business friendly ecosystem. As a result, it continues to rank high as a great place to start a business for a variety of different reasons.