5 Reasons to Start Your Business in Texas
Earlier this year, WalletHub released their 2019 report for the ‘Best and Worst States to Start a Business’, comparing all 50 contenders to determine which state is the best to pursue your entrepreneurial goals. If you haven’t already guessed, Texas earned the number one spot as the overall best state to start a business in the United States.
The methodology used to determine the top candidates included factors such as capital access, business environment, available talent and affordability of office space. The Lone Star State is currently home to over a dozen of Fortune 100’s “Best Companies to Work For” and a total of 1.7 million small businesses, according to federal data.
Texas has also become a hotspot for startups in recent years. This includes the likes of now thriving tech companies that you’d expect to find in Silicon Valley, such as WP Engine, StackPath, Armor and BigCommerce, among others. What’s more is that CNBC Metro ranked Dallas as the number one place to start a business.
Not convinced? Let’s take a look at 5 reasons to start your business in Texas.
Suitable for Small Businesses
Each year, Thumbtack conducts their United States Small Business Friendliness Survey. It examines how states throughout the US receive small businesses, including key components such as ease of hiring, regulations, training programs, tax code and other aspects.
From 2012 through 2019, Texas has consistently scored an A or A+ for overall state friendliness. It was only in 2018 that the grade went down from an A+ to an A for the first time in four years. Upon further examination, you’ll find that there isn’t much to dispute.
Most responses that pushed the grade down had more to do with the day-to-day challenges of running a small business and less with the state and its offerings. There’s also an abundance of resources available online that are geared specifically towards helping aspiring business owners in Texas succeed.
For instance, you can find in-depth guides detailing everything you need to know about how to start an LLC in Texas. This includes valuable information surrounding naming your Texas LLC, choosing a registered agent, filing the certificate of formation, obtaining an EIN and much more.
For further reading, you can learn how to do this at howtostartanllc.com. The linked guide provides a number of useful resources that will come in handy when registering an LLC in Texas. That said, small business friendliness isn’t the only reason why the state is a great place to set up shop.
Abundance of Talent
You probably know that who you choose to work for your business is key to your success. Fortunately, Texas is a talent hotspot. According to a recent study by Guidant Financial, Texas’ large population and educated residents are a major reason why the state is ranked so highly for small business suitability.
Esteemed local universities, such as the University of Texas, make it easy for companies to gain direct access to talented and qualified team members. The combination of city hotspots like Austin, Houston, Dallas and San Antonio, coupled with the high number of educated graduates makes for the perfect place to find motivated job-seekers.
Openness to Innovation
When most people think about innovation in the United States, locations like Silicon Valley, Manhattan and San Francisco most likely come to mind. But consider the numerous events taking place in Texas that celebrate innovation, such as South by Southwest (SXSW), held annually in Austin.
There are also a whopping 730 airports in the Lone Star State, bringing in a steady stream of new faces to check out the sights and sounds. Then there are the numerous industries that are currently thriving in Texas, including advanced tech and manufacturing, aerospace, biotechnology, computer tech, petroleum refining, energy and many more.
And as the Texas Economic Development Corporation recently reported, the state is paving the road when it comes to job creation. In fact, Texas is currently leading the nation when it comes to job creation and plans to continue the trend in the next decade.
In the past, entrepreneurs traditionally flocked to Delaware and Nevada to do business. This is thanks in no small part to the states’ corporate-friendly tax laws. Nevada, for example, has no individual or corporate income tax. Beyond the two tax havens, there are more states that are passing tax laws which directly benefit small businesses.
The Lone Star State is one to watch. As indicated in the 2019 Tax Foundation State Business Tax Climate Index, business owners in Texas are free from paying individual or corporate income tax. That, along with an economy that is only getting better with time, continues to make Texas the place to be for aspiring entrepreneurs.
A Great Place to Live
Business aside, Texas is simply a great place to live. This is important, as it’s likely that you’ll be staying there if you plan to set up shop in the state. Your environment, which includes the people around you and overall quality of life in your city, plays a major role in determining your mental and physical health, which in turn affects your performance.
Your levels of focus, motivation and determination will influence your success in business. This is why choosing the right place to live really matters to an entrepreneur. Fortunately, Texas happens to be one of the best places to live in the United States for numerous reasons. This includes affordability, natural beauty, hospitality, weather and more.
It’s also worth noting that the unemployment rate is lower than the national average. This may not matter to a successful business owner, but if things go south at any point in your venture, rest-assured that you won’t find it difficult to find a job to fall back on while you recuperate.
Of course, it’s worth mentioning that there’s no such thing as guaranteed success when starting a business, be it in Texas or anywhere else in the world. Planning, preparation and dedication are what matters. That said, reaping the benefits that come with being in the right state go a long way, so be sure to consider making Texas your base of operations.