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Small Business Month: The Impact of Small Business on Houston's Economy

Published May 04, 2021 by A.J. Mistretta

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Small business is big business in Houston. As the nation commemorates Small Business Month in May, the Partnership examined the latest figures on small business in Houston and the important role these organizations play in our region’s broader economy. 

Eighty-two percent of the firms operating in the Houston metro area have fewer than 20 employees. Together, these businesses employ just under 400,000 workers, or about 14% of the regional workforce, according to the U.S. Census Bureau’s Business Dynamics Statistics, 2018. Nearly 97% of businesses in the region have fewer than 500 employees—the standard to be considered a small business—and these collectively employ 44% of the region’s workforce, or 1.2 million employees. 

Census Bureau data shows that there are 663,800 “non-employee businesses” in the Houston region, which are generally sole proprietorships such as consultants, freelancers and the self-employed. What’s more, nearly 35% of Houston-area small businesses with 50 or fewer employees are minority-owned, and the diverse region ranks fifth in the nation for minority entrepreneurship, according to personal finance service Self Financial

So which Houston industries are most likely to see a high percentage of small businesses? Real estate is number one with roughly 88% of firms having fewer than 10 employees, followed by professional services at 84% and finance and insurance at 81%. Nationwide, construction, information and real estate have been the fastest growing small business sectors over the last decade. The same pattern generally holds true for Houston. 

The creation of new small businesses in this region is likely to keep growing. A new report released this spring ranked Houston among the nation’s top 10 metros for startup formation. The report from real estate investment group Roofstock was based on Census data that looked at startups as a percentage of overall businesses in the region. Houston logs more than 9,200 new startups annually, according to the report. Last year, the region's startups attracted a record $753 million in venture capital funding, up from $702 million in 2019. 

Today, there are more than 5 million U.S. businesses with fewer than 500 employees and 3.8 million with fewer than 10 employees, according to the Census Bureau. Companies with fewer than 500 employees account for about 59 million jobs, or nearly half of the national workforce (46%), and generate $13.7 trillion in combined annual revenue, about a third of all U.S. business revenue. 

Learn more about the Partnership’s Small Biz Matters business resource group and get information about how your organization can become a member today
 

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New Partnership Members in March

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The Greater Houston Partnership welcomed 23 new member companies in the month of March. The Partnership works to connect companies with resources, information and networking opportunities to help increase business while also providing a platform to influence the direction of the region.    New members who joined in the month of March include: Alzheimer's Association, Houston Global Southeast Chapter: The Alzheimer's Association is a voluntary health organization with a mission to lead the way to end Alzheimer's and all other dementia by accelerating global research, driving risk reduction and early detection, and maximizing quality care and support. Website. AZA: Ahmad, Zavitsanos & Mensing, or AZA, is a trial law firm based in Houston, Texas with over 60 lawyers excelling at high-stakes litigation for multinational companies and representing individuals and mid-sized businesses. Website. Brooksource: Brooksource is a business management consultant based in Houston, Texas that specializes in delivering Engineering and IT solutions and initiatives for Fortune 500 organizations. Website. Capital IDEA Houston, LLC: Capital IDEA Houston is a non-profit that fully funds education and training for adults who are unemployed or have lower-paying jobs, providing educational pathways to attain thriving careers and financial self-sufficiency. Website. Cell Therapy Manufacturing Center (CTMC): CTMC is a joint venture between National Resilience and MD Anderson Cancer Center located in the Texas Medical Center. CTMC unites robust biopharmaceutical manufacturing with access to MD Anderson Cancer Center’s leading research capabilities into groundbreaking medicines to cure cancer. Website. Complete Shipping Solutions Corp.: Complete Shipping Solutions is a global 3PL solutions provider, offering industry-leading technology through a SMARTT Shipping platform. Website. Corporate Catering Concierge: Corporate Catering Concierge is a catering company offering a wide selection of food options and personalized menu planning. Website. Definity First: Definity First is an IT consulting firm of advanced enterprise-grade solutions with expertise in Custom Development, Staffing, Microsoft Azure, Microsoft 365, Office 365, Microsoft Dynamics 365 CRM, and Microsoft Copilot, as well as tailored additional services for on-premises Microsoft products. Website. Greenback Cost Recovery: Greenback Cost Recovery, LLC is a Houston-based company that specializes in delivering bottom line improvements to businesses by recovering overpayments and reducing ongoing costs associated with property tax, telecommunications, and real estate leases. Website. H-Town Dream Center: H-Town Dream Center is a community center in Splendora, Texas with a mission to give the hope, healing and freedom of Christ to the most vulnerable by feeding the hungry, rescuing women and children in crisis, and educating at-risk youth. Website. Magnum Staffing Services, Inc.: Magnum Staffing Services is a recruiting and staffing solutions firm based in Houston, Texas, specializing in workforce strategy, talent management, and providing staffing solutions for various industries, including warehouse distribution, logistics, manufacturing, and professional services. Website. Metro Houston Charter Bus: Metro Houston Charter Bus is a charter bus rental company providing flexible scheduling, trained drivers, and transparent pricing to make budgeting simple. Website. Minaret Foundation: Minaret Foundation is a multi-faith organization based in Houston, Texas focused on bringing faith communities together by tackling on issues related to child welfare and food insecurity. Website. Moelis & Co.: Moelis & Company is a global independent investment bank that provides financial advisory services to corporations, governments, and financial sponsors. Website. Mo'Kai'Ana Luxury Transport: Mo'Kai'Ana is a luxury chauffeur service for special events in Cypress, TX and the surrounding Houston Area, offering a variety of van services fully licensed by the city of Houston with background checked chauffeurs. Website. One Digital: OneDigital Impact Studio is an insurance brokerage, financial services, and HR consulting firm that provides a centralized platform that equips companies with real-time visibility and heightened control over their organization's total spending. Website. Palletized Trucking, Inc.: Palletized Trucking provides freight transportation services for domestic and international markets shipping through the Port of Houston to sectors including the petrochemical, construction, fabrication, energy, oilfield, and manufacturing industries. Website. Plug and Play Tech Center: Plug and Play Tech Center is an American venture capital firm headquartered in Sunnyvale, California focusing on deploying capital to early-stage technology companies. Website. Rigid Global Buildings: Rigid Global Buildings is metal buildings manufacturer based in Houston, Texas, offering custom and pre-engineered metal building solutions. Website. Tricon Energy: Tricon Energy is a logistics service in Houston, Texas that offers chemical and plastics trading and distribution services in general and liquid chemical, aromatic, methanol, solvent, chlor alkali, and more. Website. Trinity River Authority: The Trinity River Authority of Texas is a conservation and reclamation district that provides water and wastewater treatment, along with recreation and reservoir facilities, within the nearly 18,000-square-mile Trinity River basin. Website. Venice: The Bridge Church is a nondenominational Christian church serving the Venice, FL, community with a mission to help people find and follow Jesus Christ here and around the world. Website.  Zoho: Zoho is an Indian multinational technology company that makes computer software and web-based business tools designed to help break down silos between departments and increase organizational efficiency. Website.   Click here to see the Partnership's Membership Directory.   To learn more about membership with the Greater Houston Partnership click here, or contact membership@houston.org.
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