Texas lands in top 10 most-expensive cities for running a new business

pay up

A new ranking puts Texas at No. 9 among the states with the highest expenses for starting and operating a business. Photo via Getty Images

Everything is bigger in Texas — or at least somewhat bigger — and that appears to include the cost of running a new business.

A new ranking from business consulting firm Venture Smarter puts Texas at No. 9 among the states with the highest expenses for starting and operating a business.

New York appears at No. 1 on the list, followed by Washington and Massachusetts.

The cheapest state? Mississippi. It was preceded in the ranking by Kentucky and North Dakota.

To come up with its list, Venture Smarter looked at eight metrics, including corporate tax rate, average LLC filing fees, average real estate costs, and minimum wage.

Texas scored 59.74 out of 100 for startup expenses, with a higher score being worse.

The Lone Star State tied with Tennessee for the highest initial LLC filing fees ($300). But unlike many other states, Texas doesn’t require business owners to pay LLC filing fees each year to keep a business incorporated.

Texas fared well on several counts, though, such as no corporate tax, a low state-mandated minimum wage ($7.25 an hour), and relatively low real estate costs.

“This research aims to provide valuable insights into the business climate across various states, offering new entrepreneurs the information they need to make well-informed decisions on their entrepreneurial journey,” Venture Smarter says in a statement. “By understanding the unique characteristics and challenges of each state, aspiring business owners can navigate the complexities of different markets and optimize their chances of success.”

When it comes to Texas being a top state for business, we guess the jury's out. Photo via Getty Images

Is Texas a top state for business? New reports find mixed results

by the numbers

Texas economic development boosters are crowing about a new top-in-the-nation ranking. But they’re probably frowning about a different business ranking that’s mediocre.

First, the good news.

Business Facilities magazine just named Texas the 2023 State of the Year in recognition of its business climate, economic development leadership, and “blockbuster” year for capital investment and job creation. It’s the fifth time that Business Facilities has crowned Texas as the top state.

“Texas moves at the speed of business,” Gov. Greg Abbott said in a news release. “As recognized by Business Facilities magazine, Texas leads the nation for corporate relocations, business expansions, and job creation.”

“With the best business climate in the nation, leading investments in education and workforce development, and our young, skilled, diverse, and growing workforce, Texas is poised to lead the nation in 2024,” the governor added.

Additionally, Texas again appears on WalletHub's annual list of "Best States to Start a Business" — but ranks lower than last year. The Lone Star State ranked No. 8 this year compared to last year's No. 3 spot. This ranking looked at business environment, access to resources, and business costs across 25 relevant metrics by analyzing data from U.S. Census Bureau, Bureau of Labor Statistics, and other resources.

Now, the not-so-good news.

Texas landed at No. 32 on Forbes Advisor’s new list of the best states to start a small business in 2024. The Lone Star State received especially low marks economy, workforce, and business climate, but fared better in two other categories: business costs and financial accessibility.

Topping the Forbes Advisor list was North Dakota, followed by Indiana, Arkansas, South Dakota, and North Carolina.

Texas recently was awarded three other No. 1 business climate rankings, though: Best Business Climate in the U.S. by Business Facilities in June, Best Business Climate in the U.S. by corporate executives in September, and Top Business Climate in the U.S. by Site Selection Magazine in November.

“In a state the size of Texas, business is not just finding a home in the metros. A laser focus by economic developers across the state to foster established businesses as well as innovative startups is paying off for communities of all sizes,” Anne Cosgrove, editorial director of Business Facilities, says in a news release.

The magazine covers corporate site selection and economic development.

Other contenders for 2023 State of the Year were:

  • Arizona
  • Florida
  • Georgia
  • Indiana
  • Missouri
  • Nevada
  • North Carolina
  • Tennessee
  • Utah
  • Virginia
Texas, once again, has been named a top city for starting a business. Photo via Getty Images

Texas ranks among best states to start a business

We're no. 3

For years, Texas has been lauded for its business climate being welcoming for new businesses and startups. This year's study shows that the Lone Star State has yet again made the list.

Texas ranked as the third best state to start a business in personal finance website WalletHub's recent list, 2023's Best & Worst States to Start a Business, with a score of 56.85 points. Texas ranked behind Utah, No. 1, and Florida, No. 2, and just ahead of Colorado. Idaho, Georgia, Arizona, Nevada, Oklahoma, and California make up the rest of the top 10, respectively.

The study looked at 27 key indicators of startup success across all 50 states. Texas was recognized for these factors in particular:

  • No. 10 – average growth in number of small businesses
  • No. 30 – labor costs
  • No. 10 – availability of human capital
  • No. 4 – average length of work week (in hours)
  • No. 14 – cost of living
  • No. 13 – industry variety
  • No. 31 – percentage of residents who are fully vaccinated against COVID-19
Source: WalletHub


Richard Ryffel, professor of finance practice at Washington University in St. Louis, noted the importance of policy in making a state a good place to start a business..

"Established businesses looking to expand might expand or relocate entirely based on the relative favorability of the local business climate," Ryffel says. "Recently, Texas, for example, has been the beneficiary of some significant business relocations based on its business-friendly policies."

The methodology of the study focused on three key dimensions — business environment, access to resources, and business costs — and 27 relevant metrics. Each metric was graded on a 100-point scale, and then each state’s average across all metrics was used to calculate its overall score.

In 2021, Texas ranked in the top position of WalletHub's study. Last year, the personal finance website looked at which cities were ideal spots for business launching. The report found that Georgetown as the best small city in Texas for starting a business.

Houston suburbs didn't manage to crack the top 200, but four were recognized amongst the rest of the best small business towns, according to the study:

  • Texas City , No. 202
  • Baytown, No. 267
  • Deer Park, No. 362
  • Conroe, No. 369
When it came to big cities, Houston ranked as No. 35.
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With boost from Houston, Texas is the No. 1 state for economic development

governor's cup

Texas is on a 14-year winning streak as the top state for attracting job-creating business location and expansion projects.

Once again, Texas has claimed Site Selection magazine’s Governor’s Cup. This year’s honor recognizes the state with the highest number of economic development projects in 2025. Texas landed more than 1,400 projects last year.

Ron Starner, executive vice president of Site Selection, calls Texas “a dynasty in economic development.”

Among metro areas, Houston lands at No. 2 for the most economic development projects secured last year (590), behind No. 1 Chicago and ahead of No. 3 Dallas-Fort Worth.

In praising Houston as a project magnet, Gov. Greg Abbott cites the November announcement by pharmaceutical giant Lilly that it’s building a $6.5 billion manufacturing plant at Houston’s Generation Park.

“Growth in the Greater Houston region is a great benefit to our state’s economy, a major location for foreign direct investment and key industry sectors like energy, aerospace, advanced manufacturing, and life sciences,” Abbott tells Site Selection. “Houston is also home to one of the largest concentrations of U.S. headquarters for companies from around the world.”

In 2025, Fortune ranked Houston as the U.S. city with the third-highest number of Fortune 500 headquarters (26).

Texas retained the Governor’s Cup by gaining over 1,400 business location and expansion projects last year, representing more than $75 billion in capital investments and producing more than 42,000 new jobs.

Site Selection says Texas’ project count for 2025 handily beat second-place Illinois (680 projects) and third-place Ohio (467 projects). Texas’ number for 2025 represented 18% of all qualifying U.S. projects tracked by Site Selection.

“You can see that we are on a trajectory to ensure our economic diversification is going to inoculate us in good times, as well as bad times, to ensure our economy is still going to grow, still create new jobs, prosperity, and opportunities for Texans going forward,” Abbott says.

Houston e-commerce giant Cart.com raises $180M, surpasses $1B in funding

fresh funding

Editor's note: This article has been updated to clarify information about Cart.com's investors.

Houston-based commerce and logistics platform Cart.com has raised $180 million in growth capital from private equity firm Springcoast Partners, pushing the startup past the $1 billion funding mark since its founding in 2020.

Cart.com says it will use the capital to scale its logistics network, expand AI capabilities and develop workflow automation tools.

“This investment will strengthen our balance sheet and provide us with the flexibility to accelerate our strategic priorities,” Omair Tariq, CEO of Cart.com, said in a news release. “We’ve built a platform that combines commerce software with a scaled logistics network, and we’re just getting started.”

In conjunction with the funding, Springcoast executive-in-residence Russell Klein has been appointed to Cart.com’s board of directors. Before joining Springcoast, he was chief commercial officer at Austin-based Commerce.com (Nasdaq: CMRC). Klein co-led Commerce.com’s IPO, led the company’s mergers-and-acquisitions strategy and played a key role in several funding rounds.

“The team at Cart.com has demonstrated excellence in their ability to scale efficiently while continuing to innovate,” Klein said. “I’m excited to join the board and support the company as it expands its AI-driven capabilities, deepens enterprise relationships, and further strengthens its position as a category-defining commerce and fulfillment platform.”

Before this funding round, Cart.com had raised $872 million in venture capital and reached a valuation of about $1.6 billion, according to CB Insights. With the new funding, the startup has collected over $1 billion in just six years.

This is the income required to be a middle class earner in Houston in 2026

Cashing In

A new study tracking the upper and lower thresholds for middle class households across the nation's largest cities has revealed Houstonians need to make at least a grand more than last year to maintain their middle class status this year.

According to SmartAsset's just-released annual report, "What It Takes to Be Middle Class in America – 2026 Study," Houston households need to make anywhere from $42,907 to $128,722 to qualify as middle class earners this year.

Compared to 2025, Houstonians need to make $1,153 more per year to meet the minimum threshold for a middle class status, whereas the upper bound has stretched $3,448 higher. The median income for a Houston household in 2024 was $64,361, the study added.

SmartAsset's experts used 2024 Census Bureau median household income data for the 100 biggest U.S. cities and all 50 states and determined middle class income ranges by using a variation of Pew Research's definition of a middle class household, stating the salary range is "two-thirds to double the median U.S. salary."

In the report's ranking of the U.S. cities with the highest household incomes needed to maintain a middle class status, Houston ranked No. 80.

In the report's state-by-state comparison, Texas has the 24th highest middle class income range. Overall, Texas households need to make between $53,147 and $159,442 to be labeled "middle class" in 2026. For additional context, the median income for a Texas household in 2024 came out to $79,721.

"Often, the expectations that come with the term 'middle class' include reaching home ownership, raising kids, the comfort of modest emergency funds and retirement savings, and the occasional splurge or vacation," the report said. "And as the median household income varies widely across the U.S. depending on the local job market, housing market, infrastructure and other factors, so does swing the bounds on what constitutes a middle class income in America."

What it takes to be middle class elsewhere around Texas

Two Dallas-Fort Worth suburbs – Frisco and Plano – have some of the highest middle class income ranges in the country for 2026, SmartAsset found.

Frisco households need to make between $96,963 and $290,888 to qualify as middle class this year, which is the third-highest middle class income range nationwide.

Plano's middle class income range is the eighth highest nationally, with households needing to make between $77,267 and $231,802 for the designation.

Salary range needed to be a middle class earner in other Texas cities:

  • No. 28 – Austin: between $60,287 and $180,860
  • No. 40 – Irving: between $56,566 and $169,698
  • No. 44 – Fort Worth: between $55,002 and $165,006
  • No. 57 – Garland: between $50,531 and $151,594
  • No. 60 – Arlington: between $49,592 and $148,77
  • No. 61 – Dallas: between $49,549 and $148,646
  • No. 73 – Corpus Christi: between $44,645 and $133,934
  • No. 77 – San Antonio: between $44,117 and $132,352
  • No. 83 – Lubbock: between $41,573 and $124,720
  • No. 84 – Laredo: between $41,013 and $123,038
  • No. 89 – El Paso: between $39,955 and $119,864
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This article originally appeared on CultureMap.com.

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