The state of Texas has been reported to have the second-largest economy in the United States when looking at the gross domestic product (GDP). At the end of 2021, Texas managed to have a GDP of two trillion dollars, making it one of the best and most beneficial economic climates not just in America, but in the whole world. Below are Industries Driving Economic Growth in Texas.
Industries Driving Economic Growth in Texas
Such a bustling economy is fuelled by the gargantuan efforts made by top companies that are pioneering a variety of industries in the Lone Star State. Thanks to all of the great opportunities Texas provides to new and established business owners, so many unique and innovative businesses are operating in the state, which ensures that a plethora of different business industries are creating large amounts of economic growth.
From agriculture to information technology, Texas is home to it all, and there are some key industries that have driven Texas’ economy to become what it is today.
Construction Industry
An area of work that requires hard work, dedication, and a lot of physical effort, the construction industry is one of the most crucial areas of business, especially in Texas. As Texas is constantly growing and developing, the construction industry is there to facilitate said growth through the building of houses, office spaces, retail stores, and more. With so many people making the move to Texas, there is always a need for construction work.
This industry employs over 700,000 people and it is one that does not require a plethora of tertiary education and degrees. The open nature means that the industry is free to grow quickly and swiftly, as it is in Texas.
Agriculture Industry
When it comes to agricultural commodities, Texas is one of the leading producers in the entire state. The farms there are the top producers of hay, dairy products, sheep, and horses. Alongside that, the state is very well-known for its top-quality fruits, vegetables, and grains. The entire country relies heavily on Texas, thanks to their agricultural expertise and exportation.
Contributing trillions of dollars to the United States’ GDP, the agricultural industry in Texas is continuously growing and there seems to be no end in sight as this type of business is one of the cornerstones in the entire state and country as a whole.
Hospitality Industry
Texas is a tourism hotspot, and for this reason, the state managed to employ over a million people. Thanks to this industry, job creation is at an all-time high in Texas, when with lockdown tensions easing, more peace of mind is established, and people are finally free to travel again.
Over 7 million wildlife tourists visit Texas every single year. The hospitality industry gives business opportunities to hotels, restaurants, bars, wildlife parks, and more. This industry is able to cater to the needs of som nay different business owners, making it one of the best and most well-received in the state
Information Technology (IT) Industry
The future is here and now, and it comes with so many digital advancements that allow businesses to operate both in the physical space, as well as on the internet through online markets. Businesses are also using a variety of different tech devices and applications from tablets, laptops and WiFi, to social media, websites and different online programs and functions.
Thanks to this digital revolution, the IT industry is bursting with new and innovative businesses that can help with data analytics, tech repairs, providing the best and newest equipment and more. With over 17,000 tech companies in Texas, big and small businesses are making a mark in the state, creating jobs for over 200,000 talented individuals.
Takeaway
Business is clearly booming in Texas, the state is open to entrepreneurs who belong to all walks of different unique and exciting industries that are positively contributing to the economy. If entrepreneurs are wanting to start a limited liability company (LLC) and are wondering how to form an LLC in Texas, there are so many great online resources to aid potential new business owners on their exciting journey in one of the best business states.
Also, read 7 Tips for Promoting Your Small Business Locally.
Becoming a business owner in Texas can be a liberating experience, but not without its pitfalls. It requires careful planning and preparation, yet once the necessary steps have been followed, the results can be very rewarding. Here is how to choose the right business structure for ultimate success.
The structure of a business determines everything; from how a business operates daily, to taxes and how much risk is involved. The choice of business structure provides the business owner with the right balance of benefits and legal protections.
How to Choose the Right Business Structure
Once the best business structure is selected, the establishment of the business is rather straightforward, especially with online information available on the best LLC formation service in Texas.
Get Your Business Started on the Right Foot
When starting a new business it is important to first determine which is the right business structure to suit the venture. In Texas, the business structures are Sole proprietorship, partnership, and corporation. Each business structure has distinct benefits and drawbacks.
Sole Proprietorship
A sole proprietorship is the simplest form of business. It gives the operator complete control of the business and does not form a separate business entity. The business assets and liabilities are not separate from the personal assets and liabilities of the owner, resulting in them being personally liable for all the debts and obligations of the business.
Though it may be challenging to raise funding for this type of business, sole proprietorships can offer the option of a low-risk business. This is a good choice for entrepreneurs who are testing their business idea before establishing a more formal enterprise.
Partnership
A partnership is a simple option for two or more people to own a business together. Within partnerships, there are: limited partnerships (LP) and limited liability partnerships (LLP). In a limited partnership, only one general partner has unlimited liability, while all other partners have limited liability and limited control over the company. Limited liability partnerships do indeed resemble limited partnerships, but limited liability is assigned to every owner in the business and therefore, partners won’t be responsible for the actions of other members. This option serves multiple owners well, and also those who wish to test their business concept first.
Limited Liability Company
An LLC (Limited Liability Company) has a business structure which protects the owner from personal liability. If the company faces bankruptcy or lawsuits, the owner’s assets cannot be attached. This means, in many ways, that an LLC enjoys the benefits of both the corporation and partnership business structures.
In this model, members of the company are classified as self-employed. This means that the owners must pay self-employment tax contributions toward Medicare and Social Security. Two key things to look out for with LLCs are that they can have a limited life and when anyone joins or leaves an LLC, it may mean that the company will have to be dissolved and re-formed with new membership.
LLCs are a good choice, however, for medium- or higher-risk businesses, and protect the personal assets of the members while also enjoying a lower tax rate than a corporation.
Once an entrepreneur has selected the best structure, forming a Texas LLC can be done by following five key steps:
Five Key Steps to Forming a Texas LLC
- Choose a name for your LLC
- Assign a registered agent
- File Your LLC Certificate of Formation ($300 filing fee)
- Create Your Texas LLC Operating Agreement
- Get an EIN
Final Considerations
Once an LLC is formed, some of the risks of starting a business can be the scarcity of capital or funding for the business venture, inadequate skills of the management team and staff, and unsuccessful marketing strategies.
If the business owner has not put sufficient consideration into the right infrastructure or business model, then the business may be compromised from the start. This means, therefore, that business people should take the time to carefully consider their options while on the road to realizing their dreams.
Are Small Businesses Surviving in a Post-Covid World, according to a study, the covid-19 pandemic had caused massive dislocation among small businesses. The effects were felt just several weeks after its onset– more so prior to the government providing aid through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The study concluded that 43% of businesses had temporarily closed– primarily due to covid-19 and lockdown restrictions.
Are Small Businesses Surviving in a Post-Covid World
The United States has also seen a boom in new businesses since the start of the covid-19 pandemic. While many companies were forced to retrench and downsize in order to keep their doors open, the country had also experienced a spike in new entrepreneurs who were now deciding to take matters into their own hands and become their own bosses.
Recovering from Post-Pandemic Job loss
Texas, Arizona, Idaho, and Utah have managed to recover from the pandemic depths, attributing this accomplishment to population growth as well as a shift by businesses and workers who are moving away from coastal urban areas. These states have benefited from the demographic shifts prior to and during the pandemic—having experienced an outsize in payroll growth in industries such as retail, technology, warehousing, and transportation. Many large companies have moved their operations to these states, and some of their workers have moved in as well– leaving the more densely populated and expensive urban areas.
A Startup Boom in Texas
A contributing factor to Texas regaining the jobs that were lost during the covid-19 pandemic is that is the number of new businesses that have started up in the state. Last year, Texas had the fourth-highest number of business startups in the U.S. The Lone Star State was able to reach an impressive high of more than 490000 new business startups that had been created in 2021. This is a big jump for the state that had seen around 385,559 in 2020. The latest 2021 figures represent the highest total that Texas has ever experienced; since it began tracking back in 2004. Impressively, Texas held 61% more business startups last year than it did prior to the pandemic.
For small businesses, it is vital that a solid foundation is laid out at the onset so that growth is supported by a concrete start. A Texas LLC allows small businesses to benefit from the flexibility that they would have if they took up a sole partnership or partnership business structure, but it also provides the legal protection that comes with filing to start a corporation. An LLC will also provide entrepreneurs with the unique benefit that comes with pass through taxation so that the profits that members receive do not get subject to double taxation.
To start an LLC in Texas, entrepreneurs will be required to file the Certificate of Formation via the Texas Secretary of State– with a filing fee of $300. Applications can be processed either online or by mail. The Certificate of Formation is the legal document that makes the LLC an official business entity in Texas. The entire formation process can be broken down into five necessary steps:
- Name the Texas LLC
- Choose a Registered Agent in Texas
- File the Texas Certificate of Formation
- Create an Operating Agreement
- Get an EIN
Final Thoughts
The covid-19 pandemic had forced a global paradigm shift; while larger businesses were scaling down, entrepreneurs took the chance to start up their own ventures. Starting a new business takes a great deal of determination, countless hours of hard work, and a decent amount of resilience, the feeling of accomplishment often is the motivation that allows entrepreneurs to keep the ball rolling.
