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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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Partnership Members Making News - September 2022

9/21/22
The Greater Houston Partnership celebrates our members making important announcements and sharing news about their operations and impact in our community. Learn more about some of those announcements over the last month below.  Houston-based energy technology and oil field services giant Baker Hughes is set to acquire a business unit from Sugar Land-based Team Inc. for $280 million in cash. Team Inc.'s Quest Integrity business will be integrated into Baker Hughes' Process & Pipeline Services product line within their digital solutions segment. This deal is set to boost Baker Hughes’ asset-integrity solutions for “difficult to inspect” pipelines and add capability for the inspection of furnace tubes, loading terminals, jet fuel lines and more. A leading global strategy consultancy, BCG has announced its acquisition of Quantis, a pioneering environmental sustainability consultancy guiding many of the world’s largest organizations on their sustainability transformation. Through this deal, BCG and Quantis will lead the global transformation toward a new planetary economy in which business gives nature a seat at the table. Additionally, Quantis will operate as a standalone business unit within BCG and will retain its brand and leadership team. Bridewell, a cyber security services company, announced its expansion into the $58 billion U.S. cyber security market following a multi-million investment from Growth Capital Partners last year. Through this expansion, Bridewell aims to help North American organizations develop robust and resilient cyber security solutions during this time of need for critical national infrastructure security.  HCA Houston Healthcare has completed an 11-month-long $2.7 million expansion project for their North Cypress hospital emergency room. This expansion added 5 new beds, private rooms, and a new scanning system to the ER, allowing more space and organization for speedy and private patient care. Houston METRO will receive $21.6 million from the Federal Transit Administration to aid in the organization’s transition from diesel buses to electric ones. The grant will cover the cost of 20 electric buses as well as the electric charging equipment, ultimately working to reduce emissions for our region. Additionally, the federal funding will help the organization reach it’s goal of fully transitioning to zero-emission vehicles by 2030. Health care provider Kelsey-Seybold announces a five-year expansion plan that will place clinics no more than 10 minutes away from 95 percent of Houstonians. The expected costs on construction alone is over $1 billion. The goal of this expansion is to satisfy a growing demand for services as the region’s population, particularly the elderly population, increases. MD Anderson Cancer Center and a Massachusetts biotechnology company received clearance from the Food and Drug Administration to begin testing a new cell therapy treatment on humans for metastatic melanoma, the most serious type of skin cancer. Clinical trials will begin next month. The goal of this treatment aims to avoid life threatening complications associated with similar cell therapies. Shell and Equinor announced plans to collaborate on an application for up to $2 billion in U.S. Department of Energy funding for a hydrogen and carbon capture and storage hub in Appalachia. This means that Shell and Equinor will enter the competition for one of four hydrogen/carbon capture and storage hubs to be funded across the United States under last year's big infrastructure bill. Shell and Exxon Mobil confirmed the sale of their California oil joint-venture Aera Energy to German asset manager IKAV for $4 billion, ending a 25-year-long partnership that was one of the state's largest oil producers. The sale will close this year. Solidatus, a leading data management technology firm, has appointed Co-Founder Philip Dutton as CEO. The move positions the firm to better meet the escalating demand from major global businesses for smarter, more innovative ways to unlock the full potential of their enterprise data.  Spark Spaces, a local startup, is working to elevate the experience of charging electric vehicles by developing luxury waiting spaces at charging stations. Sparks Spaces is currently operating out of The Ion and installed a charging point outside of the building to help collect insights into what drivers are needing and are wanting to learn more about their customer base. The company's goal is to take forgotten buildings an transform them into EV charging hubs.  Houston-based Waste Management, announced that it will acquire a majority stake in Avangard Innovative, a company known for its work in advanced recycling. This partnership will work to create a venture known as Natura PCR and boost the company’s ability to handle hard-to-recycle flexible plastics such as grocery bags, takeout containers and shrink wrap. The deal is expected to close this year. If you are a member and want us to help communicate news about your organization, please send a press release or information about the announcement to member.engagement@houston.org and we will share it with our content team for possible inclusion in an upcoming roundup. Learn more about Partnership membership.   
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