Small Business Statistics in Texas: 2026 Data & Trends

Texas is home to more than 3.3 million small businesses according to the SBA Office of Advocacy, making up 99.8% of all businesses in the state. They employ 4.9 million workers and generated 74% of new jobs in the most recent year on record. Here's what the latest data reveals.

How Many Small Businesses Are in Texas?

Small businesses in Texas far outnumber large corporations, and the gap keeps widening. The Lone Star State ranks second only to California for total small business count, with steady year-over-year growth across nearly every industry.

• There are about 3.3 million small businesses in Texas, representing 99.8% of all businesses in the state. (SBA Office of Advocacy, Texas 2024 Small Business Profile)
• The total number of small businesses in Texas grew from roughly 3.16 million in 2020 to 3.35 million by 2021, an increase of about 5.9% in a single year. (SBA, Texas Small Business Profiles 2023 and 2024)
• By 2025, the Governor's Office reported that more than 3.5 million startups and small businesses operate in the state, citing SBA data. (Office of the Texas Governor, “Top Texas Touts: Economy”)
• Across the United States, there are about 34.8 million small businesses. Texas accounts for roughly 9-10% of that total, ranking #2 nationally behind California. (SBA, United States and Texas 2024 Small Business Profiles)

Top Business Sectors in Texas for Small Enterprises

Texas small businesses span virtually every industry, but a few sectors dominate. Construction recently overtook professional services for the top spot, while healthcare and transportation also employ hundreds of thousands of workers through small firms.

• Construction leads with 416,401 small businesses, followed by professional, scientific, and technical services at 407,259 firms. (SBA, Texas 2024 Profile)
• Transportation and warehousing has 383,947 small firms, and other services (except public administration) accounts for 371,391 businesses. (SBA, Texas 2024 Profile)
• The utilities sector remains the smallest, with about 2,858 small businesses operating statewide. (SBA, Texas 2024 Profile)

Small Business Employment by Industry in Texas

The industries with the most small business employees don't always mirror the ones with the most firms. Healthcare and food services top the employment list because their operations tend to be more labor-intensive.

• Health care and social assistance leads with 748,292 small business employees. (SBA, Texas 2024 Profile)
• Accommodation and food services employs 671,057 workers through small firms, accounting for 57.9% of all jobs in that industry. (SBA, Texas 2024 Profile)
• Construction small businesses employ 503,806 workers statewide. (SBA, Texas 2024 Profile)
• Professional and technical services accounts for 434,387 small business employees. (SBA, Texas 2024 Profile)
• Retail trade rounds out the top five with 386,631 small business employees. (SBA, Texas 2024 Profile)

Business Growth in Texas: New Applications and Job Creation

New businesses in Texas are launching at a pace that outstrips most other states. The Census Bureau tracks business applications as a leading indicator of entrepreneurial activity, and Texas consistently ranks among the top states.

• In 2023, Texas recorded 501,398 new business applications, ranking 14th nationally in applications per capita. About 7.0% of those are projected to become employer businesses within four quarters. (U.S. Census Bureau Business Formation Statistics, via U.S. Chamber of Commerce)
• That momentum held in 2024, when Texas entrepreneurs filed nearly 500,000 new applications again, keeping the state among the top states for business formation two years running. (Office of the Texas Governor, citing U.S. Census Bureau BFS)
• Small businesses in Texas created a net 386,267 jobs between March 2022 and March 2023, accounting for about 74.2% of total net job gains in the state over that period. (SBA, Texas 2024 Profile)
• Over the 12 months ending in December 2025, Texas added about 132,500 nonfarm jobs, while from January 2024 to January 2025 the state added 187,700 jobs. (Texas Workforce Commission)

Texas Small Business Employment and Workforce Data

Small businesses in Texas employ nearly half the state's private-sector workforce. That figure has held relatively stable even as the overall economy expanded, which speaks to how deeply embedded small firms are in every corner of the Texas labor market.

• Texas small businesses employ about 4.9 million workers, representing 44.9% of the state's total private-sector employment. (SBA, Texas 2024 Profile)
• There are 479,866 small employer firms in the state, meaning the average small employer business has around 10 employees. (SBA, Texas 2024 Profile)
• Texas startups have an early survival rate of about 79.6% over the first year, according to the latest Kauffman early-stage entrepreneurship indicators. (Kauffman Foundation, State Report on Early-Stage Entrepreneurship)

Small Business Owner Demographics in Texas

Business owners in Texas represent one of the most diverse entrepreneurial populations in the country. The SBA's latest profile breaks down ownership by race, ethnicity, gender, and veteran status, and the numbers reflect the state's broader demographic shifts.

Minority-Owned Small Businesses in Texas

• Texas has about 1.74 million small businesses owned by Hispanics or members of racial minority groups, one of the largest pools of minority-owned firms in the nation. (SBA, Texas 2024 Profile)
• The breakdown includes roughly 1,028,560 Hispanic-owned businesses, 484,527 Black-owned businesses, and 307,350 Asian-owned businesses. (SBA, Texas 2024 Profile)
• The majority of Black-owned businesses in Texas operate in service industries such as professional services, health care, and food services. (SBA, Texas 2024 Profile; Census ABS)

Women-Owned and Veteran-Owned Businesses

• Women own about 1,321,604 businesses in Texas, while men own 1,807,780 firms, with another 110,924 businesses owned equally by both genders. (SBA, Texas 2024 Profile)
• Veterans own about 169,483 businesses in Texas, representing roughly 5.8% of all businesses in the state. Non-veterans own about 3,053,051 firms. (SBA, Texas 2024 Profile)

Small Business Exports and Lending in Texas

Texas small businesses play a disproportionately large role in the state's export economy. Nearly all exporting firms are small businesses, and they ship close to half of all identified export value. Access to capital also remains a key factor in small business growth.

• In 2022, a total of 40,451 identified firms exported goods worth $442.7 billion from Texas. Of those exporters, 37,305 (92.2%) were small businesses, shipping $194.4 billion in exports, or 43.9% of all identified-firm exports. (SBA, Texas 2024 Profile)
• Banks reporting under the Community Reinvestment Act issued $9.3 billion in loans to Texas businesses with revenues of $1 million or less in 2022. Total new lending through business loans of $1 million or less reached $26.1 billion statewide. (SBA, Texas 2024 Profile; FFIEC CRA Data)
• Small business incubators and product development companies can get asset-backed loans from the Product Development and Small Business Incubator Fund (PDSBI), administered by the Texas Governor's Office. (Office of the Texas Governor)

Texas Economy Facts and Small Business Impact

The Texas economy provides a uniquely favorable environment for small businesses. No personal income tax, a massive consumer base, and a GDP that rivals entire countries all contribute to making the state a magnet for entrepreneurs.

• Texas GDP reached about $2.7 trillion in 2024, up from $2.6 trillion in 2023, keeping it firmly in second place among U.S. state economies. (U.S. Bureau of Economic Analysis, cited by the Office of the Texas Governor)
• If Texas were an independent country, its economy would rank as roughly the eighth-largest in the world, ahead of nations like Canada and Russia. (Office of the Texas Governor; BEA and IMF comparisons)
• Texas does not impose taxes on personal income, which is a major draw for entrepreneurs relocating from higher-tax states.
• The state's consumer market includes about 31.3 million residents as of July 2024, giving small businesses access to one of the largest domestic customer bases in the country. (U.S. Census Bureau, Texas QuickFacts)
• As of December 2025, the seasonally adjusted unemployment rate in Texas stood at 4.3%, slightly below the national rate, after hovering around 4.0-4.2% throughout 2024. (Bureau of Labor Statistics; Texas Workforce Commission)

Starting a Small Business in Texas: Costs and Taxes

Texas offers some of the most business-friendly tax and filing structures in the country. There's no corporate income tax in the traditional sense; instead, the state uses a franchise tax with thresholds that exempt most small firms entirely.

• The filing fee for a Certificate of Formation is $300 for any for-profit entity (LLC or corporation) and $25 for nonprofits. (Texas Secretary of State)
• As of 2025-2026, Texas LLC filings submitted online through SOSDirect are typically approved in about 10-12 business days, while mail filings can take 4-8 weeks. (Texas Secretary of State)
• Texas state law requires every new LLC to designate a Texas registered agent available during regular business hours at a physical address within the state.

Texas Franchise Tax for Small Businesses (2026)

The franchise tax is the primary business tax in Texas, but the no-tax-due threshold means most small businesses owe nothing. For those that do, the rates depend on industry and revenue level.

• For reports due in 2024 and 2025, businesses with annualized total revenue of $2.47 million or less owe no franchise tax. This threshold increases to $2.65 million for 2026 reports. (Texas Comptroller of Public Accounts)
• The standard margin tax rate is 0.375% for retail and wholesale trade businesses and 0.75% for most other industries. (Texas Comptroller)
• Businesses with annualized total revenue of $20 million or less can elect the EZ Computation and pay 0.331% of apportioned revenue instead of the standard rates. (Texas Comptroller)
• Small businesses registered in a different state must obtain a Certificate of Authority from the Secretary of State's office to operate in Texas. For a detailed breakdown of filing costs, see LLC costs in Texas and other states.
• Before forming an LLC, you'll want to confirm your business name is available in the state database. Here's how to check if your Texas LLC name is available.

Sources

• SBA Office of Advocacy, Texas 2024 Small Business Profile – Official state profile with small business counts, employment, exports, and demographics.
• Office of the Texas Governor, “Top Texas Touts: Economy” – State-level economic highlights including GDP rankings and business formation data.
• U.S. Census Bureau, Business Formation Statistics – New business applications and projected employer formations by state.
• Texas Comptroller of Public Accounts, Franchise Tax – Current no-tax-due thresholds, margin rates, and EZ Computation rules.
• Texas Workforce Commission, Labor Market Data – Nonfarm job growth and unemployment figures for Texas.
• U.S. Census Bureau, Texas QuickFacts – Population estimates and socioeconomic indicators.