Small Businesses in Houston Thrive Amidst Economic Downturn

Small Businesses in Houston Thrive Amidst Economic Downturn

As the economy continues to sputter, small businesses in Houston are managing to not only stay afloat but thrive.

According to the latest data from the U.S. Census Bureau, there are more than 2.2 million small businesses in the Houston area, accounting for more than 80% percent of all businesses in the region.

And while large businesses have been shedding jobs, small businesses in Houston have actually been creating them. Between 2018 and 2021, small businesses in Houston added more than 45,000 jobs, while large businesses cut nearly 9,000.

So how are small businesses in Houston managing to succeed while the rest of the economy is struggling?

For one, the city’s strong energy sector has been a major boon for small businesses. Houston is home to more than 5,000 energy-related companies, ranging from exploration and production to refining and marketing.

And while the recent slump in oil prices has led to layoffs in the energy sector, it hasn’t been as severe as in other parts of the country. And that’s because Houston’s energy companies are generally more efficient and have lower costs than their counterparts elsewhere.

Another factor working in Houston’s favor is the city’s diversified economy. While the energy sector is a major driver of the local economy, it’s far from the only one. Houston is also home to a large healthcare sector, as well as a thriving port and manufacturing base.

All of this has helped to insulate Houston from the worst of the economic downturn. And it’s also helped to create an environment that’s conducive to small business growth.

Indeed, Houston has been ranked as one of the best cities for small businesses in recent years. In 2015, Houston was ranked as the fifth-best city for small businesses by Forbes. And in 2016, Houston was ranked as the seventh-best city for small businesses by WalletHub.

3  more reasons to start your business in Houston 

1. Tax Benefits

There was a time, not too long ago, when the majority of people who wanted to start their own businesses went to the states of Delaware and Nevada.

Due to the fact that Delaware has corporate tax rules that are favorable to businesses, the state is sometimes referred to as “the incorporation capital of the world.”

Because of these regulations, the state is now the legal home to more than one million different business entities. Due to the fact that Nevada does not impose any taxes on either personal or corporate income, the state is commonly known as a tax haven.

In addition to Delaware and Nevada, a growing number of states are implementing tax policies that are favorable to local firms of all sizes.

One state that deserves close attention is Texas. According to the findings of the 2019 State Business Tax Climate Index published by the Tax Foundation, the state of Texas does not impose an income tax on either individuals or corporations.

Texas is a desirable destination for new businesses to launch because the state does not impose an income tax and the economy is booming here.

2. Affordable cost of living

Houston is ranked second in terms of the most inexpensive housing among the top 20 metropolitan regions in the United States.

The cost of living is almost 5% lower compared to the average throughout all of the United States. Companies that have the goal of recruiting the most qualified individuals from all around the country will find this to be very encouraging news.

What’s not to like about a metropolitan area that’s both prosperous and reasonably priced?

When you consider that Texas does not impose a tax on residents’ personal income, the location of your new business headquarters immediately becomes more appealing to the skilled workers you are trying to hire.

3. Home to People from different backgrounds 

When looking at cities from a commercial perspective, variety is one of the most important indicators of productivity, creativity, and prosperity.

People who are interested in starting a competitive and profitable business will find that Houston, with its reputation as a highly diversified city, is an appropriate location.


If you’re thinking about starting a small business, Houston is definitely worth considering. The city’s strong economy and favorable business environment make it an ideal place to launch a new venture.

And even if you’re not planning on starting a business, Houston is still a great place to live and work. The city’s strong economy and diverse job market offer opportunities for all types of workers.

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