Texas is one of the most economically resilient states in the US. It has the second largest economy in the country, with a gross state product of $1.887 trillion, second only to California. In fact, if the state were a sovereign nation, it would be the 10th largest economy in the world.
A major driver of the economy is business, small businesses in particular. They make up a huge chunk of all businesses operating in the state. Microenterprises have managed to permeate every sector in the Texas economy, making them a crucial cog in the wheel that represents the larger US economy.
Below are some statistics on small businesses from the state of Texas:
- There are 2.8 million small businesses, or 99.8% of all businesses in the state.
- The state ranks #1 in America for small minority businesses, with 710,215 minority-owned, small enterprises.
- There are 4.8 million small business employees—that’s 45.1% of all Texas employees.
- The utility services industry is the smallest in the state, with only 2,785 small enterprises engaged in it.
- Start-ups have a one-year survival rate of 79.8%.
- The rate of actualization for new employer businesses is capped at 12%.
- The professional, scientific, and technical services sector is the largest commercial industry in the state, with 354,447 micro-enterprises currently engaged in it.
- As of August 2020, small enterprises in the hospitality/leisure industry employed 1,147 million people, approximately 9% of non-farm labor.
- It takes three business days to register an LLC in Texas. However, one can go through the Secretary of State’s office for same-day electronic filing. In most states, it usually takes between a week and 10 business days.
- Small businesses registered in a different state must obtain a Certificate of Authority from the Secretary of State’s office if they want to open shop in the state.
- Small businesses in the transportation sector managed to surpass pre-pandemic revenue margins by 10% in mid-May 2020.
- Texas does not impose taxes on personal income.
- From the year 2020 to 2021, there is a zero-tax threshold for small businesses that have an annual turnover of less than $1,180,000.
- Business tax is referred to as franchise tax in the state of Texas.
- According to a survey, 72% of black-owned microenterprises belong to the service industry, with 28% being in the professional, scientific, and technical services sector.
- There is a $300 filing fee for a Certificate of Formation on any for-profit organization that wants to incorporate within the state’s borders. For nonprofits, the fee is capped at $25.
- Small business incubators and product development companies can get asset-backed loans from the Product Development and Small Business Incubator Fund (PDSBI).
- Texas state law requires that every new Texas LLC designate a Texas registered agent that will be available during regular business hours at a physical address within Texas.
- The state ranks #2 in America for veteran-owned small enterprises, with a total of 213,590.
- Small firms in the wholesale and retail sector pay 0.375% of their revenue as taxes.
- Microenterprises in sectors other than retail and wholesale pay 0.75% of the revenue as taxes.
- Mom-and-pop businesses with a revenue of $20,000,000 or less (also called the EZ Computation Total Revenue Threshold), pay 0.331% of their revenue as taxes.
Sources:
- Office of the Texas Governor
- US Small Business Administration
- Smallbusiness.com
- US Census Bureau
- Federal Reserve Bank of Dallas
- Bureau of Business Research, University of Texas, Dallas
- Investopedia
- Product Development and Small Business Incubator Fund, Texas Governor’s Office