Startup friendly

Texas named the No. 1 state to start a business

The Lone Star State stands out for being the best to start a business. Photo by gguy44/Getty Images

The entrepreneurial spirit is best cultivated by Texans, apparently. The Lone Star State comes in first place for being business-friendly to startups and their founders in a recent study.

Out of all 50 states, Texas reigns supreme in WalletHub's report of the best and worst states to start a business. Texas earns a score of 61.05, which factored in business environment, access to resources, and business costs. Of those factors, the state ranked No. 1 for business environment, No. 11 for access to resources, and No. 30 for business costs.

Zeroing in on some key factors, Texas was recognized for having the fourth highest average growth in small businesses and the fifth highest total spending on incentives as its percent of gross domestic product. Texas also has the fourth longest work week by hours.

Texas edged out No. 2 Utah by a mere 0.1 points. The rest of the top five includes Georgia, North Dakota, and Oklahoma, respectively. At the bottom of the rankings are Connecticut, Hawaii, New Hampshire, New Jersey, and Rhode Island.

"In looking at the main criteria WalletHub used to determine their best startup state ranking — namely business environment, access to resources and business costs — it's clear why Texas would come in at No. 1," Susan Davenport, senior vice president of economic development for the Greater Houston Partnership, tells InnovationMap. "These are all areas where the Lone Star State consistently excels and why Texas continues to attract both entrepreneurs and existing companies across industry sectors."

Houston recently received a similar distinction from the personal finance site. In May, WalletHub used 19 key metrics — such as five-year business-survival rate and office-space affordability — to name Houston the No. 13 best city for starting a business out of 100 of the largest U.S. metros. In that study, a total of seven Texas cities made the top 20.

"Here in Houston, we're seeing growth in tech-related startups in particular and an increasing momentum of activity to support growth stage companies including the development of The Ion and the TMC3 commercialization campus, and the opening of The Cannon start-up hub, among several others," Davenport adds.

Texas also has a favorable business climate for female entrepreneurs in particular, one study found. Texas moved up to No. 1 from No. 8 in 2018 in this report by Fit Small Business that published in January.

Meanwhile, while known for being best for business, Texas is far from the top ranking in a study that analyzed the states' overall capacity. Texas came in at No. 38 in U.S. News & World Report's best states rankings for 2019, but even this report recognized Texas' business climate.

"Texas' diverse industrial base has drawn many businesses and workers in recent decades because of light regulation, low taxes and a low cost of labor," U.S. News says. "Entrepreneurs are particularly attracted to Austin, which emerged as a major player in the technology industry in the 1990s. Its 'South by Southwest' is one of the preeminent national tech conferences."

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This article was updated to include the comment from GHP.

Houston lands right in the middle of a new ranking of the country's best-run cities. Photo by Shobeir Ansari, Getty Images

While the spotlight might be on national politics, most people see the work of the government best at the local level. It's in that spirit that a new study ranks the best- and worst-run cities in the country, placing Houston in the middle of the pack.

Personal finance website WalletHub compared 150 of the largest cities in the U.S. to determine which are the best and worst managed for 2019, ranking Houston 73rd nationally.

The site measured each city's operating efficiency by looking at its total budget per capita and the quality of its city services (broken down into six categories). Houston comes in at No. 71 for budget and No. 86 for services.

Among the individual quality of service categories, H-Town ranks 44th in education, 59th in health, 61st in infrastructure and pollution, and 67th in economy. But it's near the bottom for safety (106th) and financial stability (117th).

The best-run city in Texas is Arlington at No. 27, followed by Fort Worth at No. 51. Texas' other major cities land lower. Austin ranks 72nd nationwide, just ahead of Houston, while San Antonio comes in at No. 89 and Dallas places at No. 93. When looking only at the quality of city services, however, Austin ranks first in Texas and 10th in the nation.

The best-run city in the country is Nampa, Idaho. Last on the list, ironically, is Washington, D.C.

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This story originally appeared on CultureMap.