The United States has always been regarded as the land of opportunity. Small businesses have been the backbone of the U.S. economy for many years. Most businesses that are started begin with a dream, someone’s lifelong ambition, which then turns into a small business.
Texas is no stranger to small businesses; in fact, it ranks 2nd in the U.S. for the most number of small businesses in the state.
The Lone Star State is considered America’s economic engine. Over the past several years, it has been consistently voted as one of the top states for business due to the government’s pro-business approach, the second-largest civilian workforce, low and competitive tax incentives, and high quality of life.
Number of Small Businesses in Texas
So, how many small businesses are there in Texas? There are 2,825,813 (2.8 million) small businesses in Texas, according to the latest figures (2020) from the SBA.
It is not just Americans and Texans starting small businesses in Texas; the state is a hotbed for international entrepreneurs. There are 429,414 immigrant entrepreneurs in Texas that account for 29% of all self-employed Texas residents.
The following bar graph shows the number of small businesses in Texas in 2016, 2017, 2018, 2019, and 2020.
Of the 2,835,813 small businesses in Texas in 2020, there is a wide array of different enterprises from small, one-person sole proprietorships or LLCs to much larger businesses with several hundred employees. If you want to join the 2.8 million-plus small businesses in Texas, it is fairly easy to register a business in Texas.
To be a small business in Texas, you have to qualify as one. So, to operate as a small business in Texas, you must have a company with less than 500 employees.
Let’s take a deeper dive into the number of small businesses in Texas by looking at the top industries, business owners, employees, and more!
Small Businesses in Texas 2020 overview
- Small businesses equate to over 99.8% of all businesses in Texas.
- There are 4,768,938 small business employees in Texas, which is 45.1% of the states’ employees.
- In 2019, Small Businesses in Texas added 227,487 new jobs!
- Small businesses employing fewer than 20 employees created the most job gains – 118,889 new ones!
- There are 710,215 self-employed minorities in Texas demonstrating the diversity in the state.
- Trade is huge for many businesses, and there are 37,888 small business exporters in Texas.
- There are more professional, scientific & technical services small businesses in Texas than any other type – 354,447.
- Construction firms make up the 2nd largest number of small businesses in Texas – 345,549.
How Many Small Businesses in Texas?
Over 2.8 million is a lot of small businesses to be registered in any one state, but they do say that “everything is bigger in Texas!” Compared to the rest of the U.S., the total number of small businesses in Texas is 8.83% of all U.S. businesses. There are 31.7 million small businesses in the U.S.
The number of small businesses in Texas has been growing over the past several years. In 2017 there were 2,564,479 small businesses, which increased to 2,627,724 in 2018, representing a 2.46% increase. In 2019 there were 2,679,964 small businesses in Texas, 52,240 more than the state had in 2018, representing a 1.98% increase.
From 2019 to 2020, the number of small businesses in Texas rose again, to 2,835,813. This is the largest increase in percentage terms over the past five years (5.81%) and demonstrates why Texas is the world’s 9th largest economy.
We hope this information is useful for those interested in starting a company in Texas, marketing your company to other small businesses in the Lone Star State, or expanding your business in the state.
Texas has an awful lot to offer employers and employees and companies and entrepreneurs from all over the world continue to flock to the state due to its enormous civilian workforce of 14 million, international access by land, sea, and air, world-class infrastructure, a healthy import/export market, and strong population and job growth.
If you would like to download the latest 2020 Small Business Profile on Texas from the U.S. Small Business Administration, Office of Advocacy, the Profile can be downloaded here.