22 Fascinating Texas Small Business Statistics

Texas is one of the most economically resilient states in the U.S. It has the second largest economy in the country, a gross state product of $1.887 trillion, second only to California. In fact, if the state was 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. Micro-enterprises have managed to permeate through every sector in the Texas economy making them a crucial cog in the wheel that is the larger U.S. economy.

Below are some statistics on small businesses from the state of Texas:

  1. There are 2.8 million small enterprises, 99.8% of all businesses in the state. 
  1. The state ranks #1 in America for small minority businesses with 710,215 minority- owned, small enterprises.
  1. There are 4.8 million small business employees, that’s 45.1% of all Texas employees.
  1. The utility services industry is the smallest in the state with only 2,785 small enterprises engaged in it.
  1. Startups have a one-year survival rate of 79.8%.
  1. The rate of actualization for new employer businesses is capped at 12%.
  1. The Professional, Scientific, and Technical Services sector is the largest commercial industry in the state with 354,447 micro-enterprises currently engaged in it.
  1. As of August 2020, small enterprises in the hospitality/leisure industry employed 1,147 million people, approximately 9% of the non-farm labor.
  1. It takes 3 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 to 10 business days.
  1. 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.
  1. Small businesses in the transportation sector managed to surpass pre-pandemic revenue margins by 10% in mid-May 2020. 
  1. Texas does not impose taxes on personal income.
  1. 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.
  1. Business Tax is referred to as Franchise Tax in the state of Texas.
  1. According to a survey, 72% of black-owned micro-enterprises belong to a service industry with 28% being in the professional, scientific and technical services sector.
  1. 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 non-profits, the fee is capped at $25.  
  1. Small business incubators and product development companies can get asset-backed loans from the Product Development and Small Business Incubator Fund (PDSBI).
  1. 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
  1. The state ranks #2 in America for veteran owned small enterprises with a total of 213,590.
  1. Small firms in the wholesale and retail sector pay 0.375% of their revenue as taxes.
  1. Micro-enterprises in sectors other than retail and wholesale pay 0.75% of the revenue as taxes.
  1. 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:

  1. Office of the Texas Governor
  2. U.S Small Business Administration 
  3. smallbusiness.com 
  4. US Census Bureau
  5. Federal Reserve Bank of Dallas
  6. Bureau of Business Research, University of Texas, Dallas
  7. Investopedia
  8. Product Development and Small Business Incubator Fund, Texas Governor’s Office

Small Business Statistics by State