Look out California, Texas is now the top state to do business in, and for Minority, Women and Veteran-Owned Businesses, that means it is time to expand!
Why are companies leaving California?
A recent study by Joseph Vranich from Spectrum Location Solutions showed that from 2008 to 2016 more than 13,000 businesses left California and moved their headquarters elsewhere. In 2016 alone, an estimated 1,800 relocations or “disinvestment events” occurred.
But, this downfall in California’s business climate is not a new development. For about 40 years, California has continuously been viewed as a state difficult to do business in, and it seems things are only getting worse. Harsh laws and regulations, increased taxes and no support from the state government are contributing to the increasing difficulty for businesses, large or small, in California to succeed.
Why are those companies relocating to Texas?
Vranich’s study showed the state to gain the most from the departing California businesses was Texas. Texas has also consistently ranked No. 1 in a survey for “Most Business-Friendly State.” Texas’ business friendly environment can be accredited to several aspects including lower taxes and a more pro-business state government.
The Spectrum Location Solutions study showed Texas voters elected more business people to the legislature regardless of party.
In the study, Chuck DeVore, a former California legislator, stated “An inordinate number of California legislators have worked for government or were attorneys. But Democrats in the Texas legislature are more than twice as likely to claim private-sector experience outside the field of law while 75 percent of Texas Republicans earn a living in business, farming or medicine. It’s virtually certain that an updated comparison would produce similar findings.”
This just goes to prove that when the state government and businesses in the state work together, it creates a more growth-happy environment.
Of the top ten cities to gain the most business from companies leaving California, three were cities in Texas:
- Austin
- Dallas
- San Antonio
Houston and Fort Worth were not far behind, coming in in the top 20 cities to gain new business.
So with Texas’ business friendly environment, as well as its superior infrastructure, government regulations, schools, safety and power and fuel costs, finally being recognized by those other than Texas residents, how does it affect business in Texas?
What does this mean for Texas businesses?
This means now is the time to act! Those looking to start a business, gain more business or join new, successful businesses in Texas are in the best climate to do so. In addition to Texas being ranked as the top business friendly state, it is also ranked No. 2 on the Small Business and Entrepreneurship Council’s 2018 Small Business Policy Index, which ranks the states on policy measures and costs that impact entrepreneurship and small business growth. Whether people are looking to join an already established business or start their own, Texas is one of the top places to pursue business and career growth.
For those aiming to start their own business, Texas has an economic foundation laid out for small businesses to be successful. Texas was ranked as the No. 2 most economically free state on the Fraser Institute’s “Economic Freedom of North America 2017,” a report that measured the variables of government spending, taxes and labour market freedom in each state.
Vranich’s study stated in a quote from Dean Stansel, an economics professor at Southern Methodist University and co-author of the report, that “The link between economic freedom and prosperity is clear – people who live in states that support comparatively low taxation, limited government and flexible labour markets have higher living standards and greater economic opportunity.”
With Texas being notorious for its oil and gas industry, as well as having a strong construction, engineering and technology industry, the opportunities for subcontractors and future minority, women and veteran business owners, seem to be plentiful. Texas is one of the select states showing rising numbers for small business and entrepreneurship growth, so now is the time to start or begin furthering business growth efforts in these areas.
On the other hand, people looking to join successful big-businesses that have moved to Texas just so happen to be in luck as well. With Texas being the largest recipient of businesses departing from California, several large companies are moving in with plenty of jobs to offer. Of the top types of companies leaving California, development, technology and all types of engineering rank in the top five. This means that jobs in these industries are waiting to be filled by residents of Texas who have the required skills.
A few of the prominent companies in these industries moving from California to Texas include:
1. Kubota Tractor Corporation – Grapevine, TX
2. Toyota US Headquarters – Plano, TX
3. Jacobs Engineering – Dallas, TX
4. Occidental Petroleum – Houston, TX
All these companies have established diversity and inclusion and supplier diversity programs. This creates great opportunities for minorities, women and veterans looking for jobs in these fields. Research in the Spectrum Location Solutions study shows that Texas is currently a place of business growth and success, which will only attract more businesses like the ones moving here, creating more and more opportunity.
In conclusion
Regardless of the type of career moves people are looking to make – whether its owning a business, growing a small business or joining a large business – now is the time for women, minority and veteran businesspeople in Texas to start taking action. Texas is the place to be right now when it comes to business and based on the consistent top rankings and proof of continuous business growth and success, there is only more to come.
