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.
Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

Property Showcase

Innovative Houston-area hardtech startup closes $5M seed round

fresh funding

Conroe-based hardtech startup FluxWorks has closed a $5 million seed round.

The funding was led by Austin-based Scout Ventures, which invests in early-stage startups working to solve national security challenges.

Michigan Capital Network also contributed to the round from its MCN Venture Fund V. The fund is one of 18 selected by the Department of Defense and Small Business Administration to participate in the Small Business Investment Company Critical Technologies Initiative, which will invest $4 billion into over 1,700 portfolio companies.

FluxWorks reports that it will use the funding to drive the commercialization of its flagship Celestial Gear technology.

"At Scout, we invest in 'frontier tech' that is essential to national interest. FluxWorks is doing exactly that by solving critical hardware bottlenecks with its flagship Celestial Gear technology ... This is about more than just gears; it’s about strengthening our industrial infrastructure," Scout Ventures shared in a LinkedIn post.

Fluxworks specializes in making contactless magnetic gears for use in extreme conditions, which can enhance in-space manufacturing. Its contactless design leads to less wear, debris and maintenance. Its technology is particularly suited for space applications because it does not require lubricants, which can be difficult to control at harsh temperatures and in microgravity.

The company received a grant from the Texas Space Commission last year and was one of two startups to receive the Technology in Space Prize, funded by Boeing and the Center for the Advancement of Science in Space (CASIS), in 2024. It also landed $1.2 million through the National Science Foundation's SBIR Phase II grant this fall.

Fluxworks was founded in College Station by CEO Bryton Praslicka in 2021. Praslicka moved the company to Conroe 2024.

5 Houston scientists named winners of prestigious Hill Prizes 2026

prized research

Five Houston scientists were recognized for their "high-risk, high-reward ideas and innovations" by Lyda Hill Philanthropies and the Texas Academy of Medicine, Engineering, Science and Technology (TAMEST).

The 2026 Hill Prizes provide seed funding to top Texas researchers. This year's prizes were given out in seven categories, including biological sciences, engineering, medicine, physical sciences, public health and technology, and the new artificial intelligence award.

Each recipient’s institution or organization will receive $500,000 in direct funding from Dallas-based Lyda Hill Philanthropies. The organization has also committed to giving at least $1 million in discretionary research funding on an ad hoc basis for highly-ranked applicants who were not selected as recipients.

“It is with great pride that I congratulate this year’s Hill Prizes recipients. Their pioneering spirit and unwavering dedication to innovation are addressing some of the most pressing challenges of our time – from climate resilience and energy sustainability to medical breakthroughs and the future of artificial intelligence,” Lyda Hill, founder of Lyda Hill Philanthropies, said in a news release.

The 2026 Houston-area recipients include:

Biological Sciences: Susan M. Rosenberg, Baylor College of Medicine

Rosenberg and her team are developing ways to fight antibiotic resistance. The team will use the funding to screen a 14,000-compound drug library to identify additional candidates, study their mechanisms and test their ability to boost antibiotic effectiveness in animal models. The goal is to move toward clinical trials, beginning with veterans suffering from recurrent infections.

Medicine: Dr. Raghu Kalluri, The University of Texas MD Anderson Cancer Center

Kalluri is developing eye drops to treat age-related macular degeneration (AMD), the leading cause of vision loss globally. Kalluri will use the funding to accelerate studies and support testing for additional ocular conditions. He was also named to the National Academy of Inventors’ newest class of fellows last month.

Engineering: Naomi J. Halas, Rice University

Co-recipeints: Peter J. A. Nordlander and Hossein Robatjazi, Rice University

Halas and her team are working to advance light-driven technologies for sustainable ammonia synthesis. The team says it will use the funding to improve light-driven catalysts for converting nitrogen into ammonia, refine prototype reactors for practical deployment and partner with industry collaborators to advance larger-scale applications. Halas and Nordlander are co-founders of Syzygy Plasmonics, and Robatjazi serves as vice president of research for the company.

The other Texas-based recipients include:

  • Artificial Intelligence: Kristen Grauman, The University of Texas at Austin
  • Physical Sciences: Karen L. Wooley, Texas A&M University; Co-Recipient: Matthew Stone, Teysha Technologies
  • Public Health: Dr. Elizabeth C. Matsui, The University of Texas at Austin and Baylor College of Medicine
  • Technology: Kurt W. Swogger, Molecular Rebar Design LLC; Co-recipients: Clive Bosnyak, Molecular Rebar Design, and August Krupp, MR Rubber Business and Molecular Rebar Design LLC

Recipients will be recognized Feb. 2 during the TAMEST 2026 Annual Conference in San Antonio. They were determined by a committee of TAMEST members and endorsed by a committee of Texas Nobel and Breakthrough Prize Laureates and approved by the TAMEST Board of Directors.

“On behalf of TAMEST, we are honored to celebrate the 2026 Hill Prizes recipients. These outstanding innovators exemplify the excellence and ambition of Texas science and research,” Ganesh Thakur, TAMEST president and a distinguished professor at the University of Houston, added in the release. “Thanks to the visionary support of Lyda Hill Philanthropies, the Hill Prizes not only recognize transformative work but provide the resources to move bold ideas from the lab to life-changing solutions. We are proud to support their journeys and spotlight Texas as a global hub for scientific leadership.”

Investment bank opens new Houston office focused on energy sector

Investment bank Cohen & Co. Capital Markets has opened a Houston office to serve as the hub of its energy advisory business and has tapped investment banking veteran Rahul Jasuja as the office’s leader.

Jasuja joined Cohen & Co. Capital Markets, a subsidiary of financial services company Cohen & Co., as managing director, and head of energy and energy transition investment banking. Cohen’s capital markets arm closed $44 billion worth of deals last year.

Jasuja previously worked at energy-focused Houston investment bank Mast Capital Advisors, where he was managing director of investment banking. Before Mast Capital, Jasuja was director of energy investment banking in the Houston office of Wells Fargo Securities.

“Meeting rising [energy] demand will require disciplined capital allocation across traditional energy, sustainable fuels, and firm, dispatchable solutions such as nuclear and geothermal,” Jasuja said in a news release. “Houston remains the center of gravity where capital, operating expertise, and execution come together to make that transition investable.”

The Houston office will focus on four energy verticals:

  • Energy systems such as nuclear and geothermal
  • Energy supply chains
  • Energy-transition fuel and technology
  • Traditional energy
“We are making a committed investment in Houston because we believe the infrastructure powering AI, defense, and energy transition — from nuclear to rare-earth technology — represents the next secular cycle of value creation,” Jerry Serowik, head of Cohen & Co. Capital Markets, added in the release.

---

This article originally appeared on EnergyCaptialHTX.com.

View All Listings