The U.S. economy still faces a very long road ahead. Unemployment is high, countless businesses have suffered or closed completely, and the coronavirus pandemic is not behind us. In fact, many among the experts believe that the coming winter could bring about a spike in coronavirus cases, which could further set back the recovery.
With all of that said though, there are signs for the time being that businesses are returning to action. Alignable’s recent survey showed encouraging data in a number of different categories that all related to a cautious sense of optimism among business owners. The prevailing feeling appears to be that reopening is an option or will be soon, and that customers are slowly trickling back.
Whether or not this sense of optimism will remain prevalent will likely depend on how well the virus is controlled in the coming months. While we’re in a period of relative positive feeling though, another interesting point to consider regarding the economic recovery is the potential for new businesses. Many have suggested that with people seeking opportunity following the recession, and a societal reopening paving the way for consumer activity, we could see a spike in new, small businesses in the next year or so.
Should such a spike occur, Texas appears likely to be part of it. For a few reasons, the state is ideally positioned to welcome new startups.
No State Income Tax
This point is largely self-explanatory. But just to elaborate on the idea, the thinking is that prospective entrepreneurs looking for opportunities when the time comes will be keen to take advantage of any financial perks they can find. According to Business Insider’s list of tax-free states, Texas is one of just nine places in the U.S. without a state income tax. And while that doesn’t directly have anything to do with business operations or startup conditions, it’s still likely to appeal to people considering starting their own companies. A lack of income tax simply means more cash on hand, which is a bonus for anyone going through the process of launching a new company.
LLCs Are Easy to Start
Another perk that prospective startup founders will discover in Texas is that the actual things one needs to do to set up an official LLC are simple and easy to address. Per the LLC formation process in Texas outlined by ZenBusiness, there are just a few steps involved (and none of them require advanced law degrees!). This doesn’t mean you won’t have to fill out some forms and do some careful planning. But at least in Texas, you can essentially form and launch your LLC by naming it, registering an official agent in charge of it, and filing forms related to state recognition of the company and tax status. The simplicity of this effort ought to be inviting to potential business founders.
The State Already Has a Reputation
It also helps that Texas has developed something of a reputation for fostering startups — which could lead to potential entrepreneurs giving the state a look in the first place. A few years ago, the city of Austin was referred to by CNBC as a “startup mecca” greater even than Silicon Valley. And in the time since, that status has taken hold, and even spread to other parts of the state. Austin and to some extent Texas at large has become a growing hub of startup activity and innovation, and is now even being looked at by some as a potential next-generation tech hub. All of this should only make the state more attractive to people who may be hoping to start businesses as the economy gradually recovers.
In the short term, the main focus will still be on the reopening of existing businesses, and the slow return to normal. But if we are able to control the pandemic, and the economy does begin to pick up, new startups will follow. For the simple but advantageous reasons above, we expect many of them to be in Texas.
