They say everything is bigger in Texas. The number of small businesses in the state is no different. The question is, why is Seongju a hotbed for small and medium-sized enterprises? Quality talent, financial benefits, and tax breaks are all taken into account.
Here’s a closer look at why entrepreneurs are heading to Texas to launch small businesses.
Why Texas is a great state to start a business
According to the U.S. Small Business Administration, Texas is home to 3.2 million small businesses, accounting for more than 99% of all businesses in the state. Here are four reasons why Solitary Seishu is popular with new businesses.
1. Texas is rich in talent.
One of the keys to a successful startup is the company’s team. Overcoming the challenges of starting a business requires a pool of talented people, including human resources and engineers.
However, some startups make the mistake of hiring too quickly. Maybe the candidate isn’t a good fit or lacks key skills needed for the role. An emerging small business may decide to hire and onboard them anyway. After all, filling the position is a top priority, and companies may be struggling to find interested and available candidates.
Texas is ranked No. 1 for workforce on CNBC’s 2024 America’s Top States for Business. The state consistently receives top rankings for overall business and boasts a huge workforce of more than 15 million people as of 2024, according to research from the Texas Workforce Commission. Because of this, business owners are interested in opening stores there.
2. Starting a business in Texas offers significant tax benefits.
There was a time, not too long ago, when many entrepreneurs flocked primarily to Delaware and Nevada to pursue business. Delaware is known as the corporate formation capital of the world because of its business-friendly corporate tax laws. These laws have enabled the state to become the legal home of more than 1 million businesses. Nevada is also known as a tax haven because it does not collect corporate or personal income taxes.
But beyond Delaware and Nevada, more states have passed tax laws favorable to small businesses, including Texas. Texas continues to be an attractive location for startups due to its thriving economy and lack of income taxes.
Alisha Wright, founder of Flight PR, experienced this benefit firsthand when she moved from California to Texas in 2017. “This is a huge economic benefit and probably one of the main attractions for many companies,” Wright said. “For small business owners, Texas’ tax-friendly environment helps businesses reinvest more of their profits into growth and development.”
3. Texas is open to innovation.
When many people think of hotbeds of innovation, they may think of the East and West Coasts, especially California’s Silicon Valley and New York’s Manhattan (or Brooklyn).
But consider an event like South by Southwest (SXSW), held in Austin each year to celebrate the changing landscape of technology and media.
Texas is home to more than 380 airports, and new people arrive every day to check out the state’s sights and sounds, including its vibrant music scene. You might be surprised by some of the industries that are thriving in Texas.
Advanced Technology and ManufacturingAerospace, Aviation and DefenseBiotechnology and Life SciencesEnergyInformation and Computer TechnologyOil Refining
Innovation is happening across Texas right now. Texas has a large population and is known for its diversified economy, thanks to its dedication to serving minority entrepreneurs. As the Texas Economic Development Corporation points out, that same economy can pave the way for Texas to move forward in creating new jobs. Texas currently leads the nation in job creation. We plan to continue this trend over the next decade and beyond.
4. Texas has an entrepreneur-friendly climate.
In addition to its overall business-friendly policies, the Lone Star State has a reputation for welcoming and supporting small business owners. Texas is rich in communities and resources for current and aspiring entrepreneurs, including Capital Factory in Austin.
“As the ‘center of gravity’ for startups in the region, Capital Factory provides valuable networking opportunities, resources and support,” Wright told business.com. “This has proven to be a great platform for collaboration and innovation, and has helped connect me with potential customers.”
There is no guarantee of success for anyone starting a business, whether in Texas or elsewhere. The best way to succeed is to plan and prepare. This applies to any business that wants to get off the ground. (Click here to learn more about starting a home-based business.)
More states are great for starting a business
Here are some competitive states that reflect the way Texas promotes small business survival.
arizona
Arizona ranked 6th in WalletHub’s 2024 Best and Worst States to Start a Business and 12th in CNBC’s study. The Grand Canyon State is known for its strong infrastructure, low taxes, and business-friendly policies.
According to the Arizona Department of Commerce, industry giants such as Amazon, IBM, and Zillow operate in the state, which also has a reputation as a center for innovation.
florida
Florida is a leading personal income tax state, with no personal income tax and a corporate tax of only approximately 5.5%. (Learn why small business owners should think about taxes year-round)
Keep in mind that natural disasters, especially hurricanes, are one of the biggest downsides for businesses relocating to Florida.
Many states offer business-friendly environments, with many benefits for entrepreneurs. When deciding where to start or move your business, consider your industry and its regulations, as well as your personal needs and preferences.
georgia
The Peach State was ranked No. 1 in CNBC’s infrastructure lineup and No. 2 overall in WalletHub’s survey. Although tax rates are high, the state makes up for it with a low cost of living, making Georgia one of the most affordable states with lucrative startup incentives.
According to the Georgia Department of Economic Development, investment in business expansion and new businesses in Georgia accounts for more than $20 billion. In addition, we created approximately 27,000 jobs in the private sector last year.
north carolina
North Carolina ranked second overall in the CNBC poll. It has been in the top three on the list for the past five years in a row.
The Old North State took the No. 3 spot for business friendliness. It also received high marks for its workforce, economy, education, and access to capital. We have surprisingly low corporate tax rates of 2.5 percent and personal tax rates of 4.5 percent, as well as business-friendly laws and regulations.
Danielle Fallon-O’Leary and Deborah Sweeney contributed to this article.
