Texas leads the rest of the country in headquartered Fortune 500 companies. Have you been thinking of joining them, or of expanding your existing business in Texas? In this article, we’ll look at the benefits of doing business in Texas, signs that it’s the right time to expand, and how to execute a successful expansion or relocation.
Benefits of Expanding Your Business in Texas or Into Texas
Learn why some of America’s largest companies have been relocating to and expanding in Texas–there are a variety of reasons to make the Lone Star State your corporate home.
Diverse Economy
Texas is known for its oil and gas companies, but our state is also home to a variety of industries such as aerospace, automotive, IT technology, manufacturing, and the sciences. So, whatever industry your business is in, you can build on the success of others when you expand in the Lone Star state. Our large and talented labor pool is ready to go to work for your business.
More Affordable than Other Metros
In recent years, tech companies and their workers have been drawn to Texas’ lower cost of living compared to other business hubs. For example, Amazon opened one of its tech hubs in Houston in 2019, followed by Hewlett Packard Enterprise with its new Houston headquarters in 2022. Tesla Headquarters moved to Austin in 2021.
Costs are not only lower for businesses in Texas, but also for their employees. For example, the cost of living in Houston is lower than the national average, Dallas is about tied, and while Austin’s cost of living is higher than the U.S. average, it’s still lower than other business hubs like San Francisco, New York, and Boston. Lower taxes, including no personal income tax, also contribute to Texas’s affordability.
Positive Business Environment
Texas offers one of the most favorable business environments with its low taxes, many incentives, favorable regulatory policies, investment in infrastructure, and low cost of living for employees. For example, there is no general business license requirement in Texas. And in such a thriving economy, there are plenty of other entrepreneurs to network with. Find your local Small Business Development Center (SBDC) or SCORE mentor in Texas.
Tax Friendly-Environment
Texas has one of the most favorable tax codes in the country for both businesses and individuals:
- No corporate income tax
- No personal income tax
- No estate, gift, or inheritance tax
Businesses can save a significant amount of money from taxes alone by moving to Texas. When less money is eaten up by taxes, consumers and businesses have more freedom to spend. Locating your business in a tax-friendly environment can also help you attract top talent. And savings from not paying state income taxes can be reinvested into your business instead, whether that means hiring, expanding operations, or improving products and services.
Wide Range of Locations
Texas is one of the largest states in the country, so there are a variety of locations to choose from when relocating your business here. Corporations may be drawn to our bustling metro areas such as Dallas, Fort Worth, Houston, Austin, and San Antonio; whereas agriculture or manufacturing businesses can find plenty of wide open space to expand in. Named a top state for infrastructure by Site Selection Magazine, Texas’ highways, airports, and ports can connect your business with the rest of the world.
When to Consider Expanding Your Business
The decision to expand your business is one that requires careful consideration. Here are a few signs that it might be time to expand your business in Texas.
Strong Financial Health
If your business has had consistently strong cash flow for years, this is a good indicator for expanding your business. Maintain a reserve of financial liquidity before you expand to cover any unforeseen costs.
Market Demand and Saturation
Review market demand for your products and services, especially in Texas. Are you missing out on expansion opportunities based on your limited locations or presence? This is also a good sign as to whether expansion could benefit your business.
Capacity to Scale
Determine whether your business model could be easily scaled. Take into consideration the operational capacity of your business, as well as local supply chains, labor costs, and more.
Strategies for Successful Expansion in Texas
Expanding your business into Texas requires careful planning and execution. Here are some strategies to help ensure a successful expansion.
Local Partnerships
If you’re expanding into Texas for the first time, familiarize yourself with local vendors and businesses that can help support your business operations. Networking through local business networks and organizations like the Chamber of Commerce can help you understand the local business landscape and make valuable connections.
Talent Recruitment
To make the most of your business expansion into Texas, consider working with a local staffing area who already has a pool of qualified candidates for your open positions.
Market Research
It’s always a good idea to conduct market research before you take the first step in expanding your business. Whether that means expanding your existing Texas business, or moving to Texas from another state, market research can help you choose a location where your business can be the most successful. Identify markets where there is a clear need for your product or service, and also a demand for employment in your industry.
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