For the second year in a row, Texas is the best state to start a business, due in part to a thriving economy, positive startup culture and low taxes, according to a WalletHub study.
The steady growth of Hays County and the Austin metropolitan area has led to an increase in the technology sector as out of state companies are relocating to Texas. To experts, Texas is the place to be.
“This year, Texas was ranked as the best state to start a business, and it was the best state in 2018, as well,” said Wallethub Analyst Jill Gonzalez. “We made some changes to our methodology since last year, but Texas managed to stay on top.”
Between 2010 and 2016, the number of small businesses in Texas grew by 11%, according to the most recent data available Wallethub analyzed. Additionally, the state ranks in the top 20 for the number of startups per capita and has the third-highest entrepreneurs in the country.
Buda Area Chamber of Commerce (BACC) Executive Director J.R. Gonzales points to low taxes, a well-educated workforce and culturally diverse populations for Texas’ business success.
“For starters, we do not have a state income tax and our economy is doing well, which attracts entrepreneurs from across the country,” Gonzales said. “We also have to look at the housing market. Home prices are going up, but Texas is still relatively affordable compared to other states.”
Gonzales said low taxes and a low cost of living lends to more cash in hand and more opportunity to invest.
Texas ranks 13th in industry variety, 20th in cost of living and 4th in average growth in a number of small businesses, according to the report. Texans are some of the hardest working people in the country, at least statistically.
“Texas’ average workweek is 40 hours, the fourth-longest in the United States,” Gonzalez said. “The median in the country is around 38.5 hours. Though it’s just 1.5 hours longer, the workweek is an important factor in making Texas’ business environment more appealing to entrepreneurs.”
Growing Hispanic and minority populations across the state could foster more entrepreneurial opportunities.
By 2022, 40% of the population will be Hispanic with a median age of 27 compared to every other group which will consist of an average age of 45.
“Hispanics will be younger, hard working, entrepreneurial and a well-educated population ready to tackle business growth,” Gonzales said. “This is the perfect environment for not only new startups but a way to establish a thriving workforce.”
However, starting a business, no matter the location, is still a tough task. Experts urge young entrepreneurs to research the job market, location, operating costs and cost of living.
Gonzales said young business owners will work longer hours and harder than they ever had before, but dedication can lead to longterm success.
“Texas is God’s country,” Gonzales said. “If you can’t make it in Texas, you’re not going to make it.”