Texas Adjudged The Second-Best State To Start Small Business

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Texas Adjudged The Second-Best State To Start Small Business (1)

Texas, already known for its business-friendly policies for small businesses, has yet again earned the tag of second-best state to start a small business, according to Business credit card experts Capital on Tap, who used data from the U.S. Bureau of Labor Statistics to arrive at the best places to start a business. The position was arrived at by analysing factors such as corporate tax rates, new firm survival rates and number of entrepreneurs in a state. Florida topped the list of 10 best states, followed by Texas, Tennessee, South Dakota and Idaho. Florida’s top spot was a result of its strong support of local economies as well as the highest number of jobs created by start-ups per 1,000 residents in the state. However, the key difference between Texas and Florida is that unlike Texas, Florida small businesses have to pay a 5.5 percent corporate tax rate.

Earlier this year, Texas had earned the number one position in Chief Executive magazine’s annual report and the No. 5 spot in a February 2023 report that published the best states for female entrepreneurs.

What does Texas offer

Small businesses are drawn to Texas as it offers a very tax friendly structure. Significantly, it is one of those five states that do not impose any income tax from small businesses. Also, all businesses with a revenue of less than US$ 1.08 million are not supposed to give any franchise tax. Besides this, taking business loans is much easier in Texas, as the state allows a loan of US$ 4,811 per employee. This positions Texas as the state offering the fifth-highest average loan amount among all the 50 states.

 Damian Brychcy, Chief Operation Officer (COO) of Capital on Tap, said that starting a small business involves assessing multiple factors and risks, but was hopeful that his team, with its strong research, could provide strong guidance to small businesses and entrepreneurs, irrespective of their place of residence.

He further said, “Entrepreneurship is driven by the desire for independence. This includes the freedom to pursue your passion, choose your workplace and working hours, and foster personal growth.”

Starting Business In Texas

Texas has been regularly earning the laurels of being one of the best places to do business. The top positions that it has earned come from multiple research bodies. In October 2022, Harrington Group International (HGI) had placed Texas, with no personal or corporate income tax, at the number 2 spot. Earlier this month, for the 19th consecutive year, CEOs surveyed by Chief Executive magazine named Texas as the best state for business. According to the magazine, “The state’s combination of business-friendly policies, growing cities, a rising professional class, and a direct appeal to CEOs who aren’t happy with California continues to keep Texas at the head of the class.” Just two months back, in March 2023, Texas had claimed its 11th straight Governor’s Cup from Site Selection magazine. The cup is a recognition of being the country’s top-performing state with respect to job-creating business relocations and expansions.

The Advantages Of Texas

Texas, the Lone Star State, is undoubtedly America’s growth engine as it continues to be fueled by a highly skilled and diverse workforce of more than 14.5 million. With more than 3.1 million small businesses, and a strong statewide focus on entrepreneurial freedom, the state offers multiple opportunities to grow and thrive in a highly conducive business environment. The state not only enjoys the reputation of being one of the best states for small businesses but is also one of the best states to live, work and lead a comfortable family life. The state is in fact a talent magnet, which, with enviable living and working conditions, attracts the best minds from across the globe. The state’s strategic geographic location (center of North America) and strong infrastructure are instrumental in enhancing its economic prowess. It goes beyond doubt that Texas has been instrumental in the growth of the economy, and also as a top jobs creator, making it one of the best options for businesses to relocate and expand, and for top talent to continue to grow and thrive.



A professional with 23 years of experience in the areas of Business, Market & Financial Research covering both primary and secondary modes of research. Worked on and managed multiple projects across industries addressing businesses' problem areas, identifying growth opportunities, and presenting key consumer insights for FMCG, Pharma, Beauty, Health & Wellness, and Sustainability, across markets. Strong problem solving and training skills, competency in managing complex projects through large virtual teams across geographies. Current profile includes managing the entire project lifecycle with involving Client management, Team Management and Project Management


Kristina Knight-1
Kristina Knight, Journalist , BA
Content Writer & Editor
Kristina Knight is a freelance writer with more than 15 years of experience writing on varied topics. Kristina’s focus for the past 10 years has been the small business, online marketing, and banking sectors, however, she keeps things interesting by writing about her experiences as an adoptive mom, parenting, and education issues. Kristina’s work has appeared with BizReport.com, NBC News, Soaps.com, DisasterNewsNetwork, and many more publications.

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  2. Texas Wins Governor’s Cup For Record-Shattering 11th Consecutive Year. gov.texas.gov. Accessed May 30, 2023. https://gov.texas.gov/news/post/texas-wins-governors-cup-for-record-shattering-11th-consecutive-year
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