Great News for Austin

No major state has weathered the recession more successfully than Texas. So it’s logical that the best place to launch a new business would be a prominent Texas metropolitan area.

The nation’s top score for small-business vitality, according to a new Portfolio.com/bizjournals study, belongs to Austin, the state’s capital and the center of a thriving metro with 1.7 million residents. A six-part formula was used to analyze the nation’s 100 largest metros, looking for the places that are most conducive to the creation and development of small businesses.

Austin emerges as the clear winner, based on its outstanding performances in three statistical categories of critical importance to entrepreneurs:

—Population: The Austin metro area added 270,000 people between 2003 and 2008, a gain of 19.5 percent. That was four times faster than the national population increase of 4.8 percent during the same five-year period.

—Employment: All 100 markets suffered job losses in the past year. But Austin softened the blow with impressive long-term growth, expanding its job base by 15.6 percent between 2004 and 2009. National employment actually dropped by 0.5 percent.

—Small-business growth: The number of small businesses in Austin shot up by 5.6 percent between 2006 and 2007, the latest period covered by official statistics. No other market came close to matching that pace. The typical metro experienced small-business growth of 1.4 percent.

The highest scores in the Portfolio.com/bizjournals study went to areas that have prosperous economies, are expanding rapidly, and are densely packed with small businesses. (A small business is defined for the survey as any private-sector employer with 99 or fewer employees.)

The six-part formula analyzed each metro’s number of small businesses per 1,000 residents, the one-year change in that concentration, one-year growth rates for small businesses and private-sector employment, and five-year rates for population and employment.

Baton Rouge, Louisiana, is second in this year’s rankings. It experienced a robust 2006-2007 increase of 3.9 percent in its number of small businesses, nearly tripling the national rate.

Last year’s top market for entrepreneurs, Raleigh, North Carolina, drops to third place this year. Its five-year population increase of 22.5 percent was the very best in the study group, but Raleigh couldn’t match Austin’s growth rates for jobs or small businesses.

John Paul Porter, Broker/Realtor & Austin Listing Specialist

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