Small Business Profile: TEXAS 

Small businesses are the heart of Texas’s economy. Research by the Office of Advocacy shows that small businesses create most of the nation’s net new jobs, and they bring dynamic ideas, innovative services, and new products to the marketplace. They account for almost all of the nation’s employer firms and generate half of non-farm private output. New business creation is key to a state’s ability to increase its gross state product, state personal income, and total state employment. This small business profile uses the most recent data available to demonstrate the valuable contributions that small businesses make to Texas’s economic health.

Number of Businesses.  Texas had an estimated total of 2,093,400 small businesses. Employer firms totaled 424,300 in 2006, up 2.9 percent from the previous year. Of this total, an estimated 98.7 percent, or 418,800 were small. Self-employment (incorporated and unincorporated) totaled 1,148,600 in 2006, an increase from 1,142,200 in 2005. Non-employer firms totaled 1,686,300 in 2005, an increase of 6.6 percent since 2004. (Sources: U.S. Dept. of Labor, Employment and Training Administration; U.S. Dept. of Commerce, Census Bureau; U.S. Dept. of Labor, Bureau of Labor Statistics.)

Women-owned Firms. In 2002, businesses owned by women numbered 468,700, represented 27.0 percent of the state’s 1.7 million businesses, and generated $65.8 billion in revenues. Employer firms owned by women totaled 63,300, a slight decrease of 0.3 percent since 1997. Women numbered 379,300 or 33.0 percent of the state’s self-employed persons in 2006, an increase of 5.7 percent from the previous year. (Sources: U.S. Dept. of Labor, Bureau of Labor Statistics; U.S. Dept. of Commerce, Census Bureau.)

Minority-owned Firms. In 2002, Asian-owned firms totaled 78,000, and 21,800 of them were employer firms; Black-owned firms numbered 88,800, and 6,500 were employer firms; Hispanic-owned firms totaled 319,300, and 34,400 were employer firms. American Indian and Alaska Native-owned firms numbered 16,200, and 2,200 of them were employer firms; while Native Hawaiian and other Pacific Islander-owned businesses numbered 1,390, and data on employer firms are unavailable. (Source: U.S. Dept. of Commerce, Census Bureau.)

Business Turnover. An estimated 58,943 new employer firms were created in 2006, which is 5.5 percent more than the number created in 2005. Business bankruptcies totaled 2,081 in 2006, down from 3,590 the previous year, while business terminations decreased from 55,000 in 2005 to 54,500 in 2006. (Sources: U.S. Dept. of Labor, Employment and Training Administration; Administrative Office of the U.S. Courts; U.S. Dept. of Commerce, Census Bureau.)

Employment. Small firms employed 48.0 percent of the state’s non-farm private labor force in 2004, which was below the national average of 50.9 percent. These 376,800 firms accounted for 98.7 percent of the state’s employer businesses, and they employed 3.9 million people (Table 1). Small businesses added a total of 132,500 net new jobs between 2003 and 2004 (Table 2). (Source: U.S. Dept. of Commerce, Census Bureau, Statistics of U.S. Businesses.)

Small Business Income. Non-farm proprietors’ income, which is a share of small business income, increased by 7.2 percent, from $114.4 billion in 2005 to $122.6 billion in 2006. (Source: U.S. Dept. of Commerce.)

Finance. Commercial banks and savings institutions continued to be important sources of small business financing. The number of lending institution branches in the state increased in 2006 (Table 3). For a list of financial institutions in the state that make the most loans to small businesses, visit www.sba.gov/advo/research/lending.html.

To learn more about the Office of Advocacy’s data and analyses of small business, visit www.sba.gov/advo/research, call (202) 205-6533, or email advocacy@sba.gov.

Sign up at http://web.sba.gov/list for email delivery of:
• Advocacy Newsletter
• Advocacy Press
• Advocacy Regulatory News
• Advocacy Research
For RSS feeds, visit www.sba.gov/advo/rsslibrary.html.