Skip to main content

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

Published May 04, 2021 by A.J. Mistretta

open for business sign

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
 

Related News

Membership

Partnership Members Making News - May

5/20/25
The Greater Houston Partnership celebrates our members making important announcements and sharing news about their operations and impact in our region. Learn more about some of those announcements over the last month below. Business Moves Aramco, officially the Saudi Arabian Oil Co., announces 34 memorandums of understanding with U.S. companies, many of which are based in the Houston area, totaling $90 billion of potential value. CenterPoint Energy begins on a new 160 megawatt/320 megawatt-hour Battery Energy Storage System, or BESS. The project aims to address grid-scale energy storage bringing reliability and resiliency to the Texas power grid. Exxon Mobil Corp. (NYSE: XOM) has started renovating its headquarters in Spring, Texas to make room for its new integrated research center, registering nearly $30 million worth of renovations and new construction under the title "North America Laboratory Integration Project." Exxon Mobil Corp. (NYSE: XOM) has signed a key offtake deal to supply Japan-based Marubeni with 250,000 metric tons of low-carbon ammonia a year from its planned Baytown project. Harris County has unveiled Bayland Park’s master plan to improve facilities, programming and connectivity and concentration on active parks, pedestrian safety, gardens, and farms. The city of Montgomery is set to break ground on its first H-E-B in 2026 at the southeast corner of Texas 105 and FM 2854. The Woodlands-based Howard Hughes Holdings Inc. (NYSE: HHH) has completed a $900 deal with Perishing Square to become a diversified holding company. Howard Hughes Holdings Inc. (NYSE: HHH) acquires the former McKesson Building in The Woodlands for $16.3 million. The Class A building with 200,000 square feet of available office space will be renamed "7 Waterway." NRG Energy Inc. (NYSE: NRG) is set to double its power-generation capacity in a $12 billion deal, acquiring a portfolio of natural gas generation facilities along with a commercial and industrial virtual power plant platform from LS Power Equity Advisors LLC. Rice University breaks ground on the Moody Center Complex for Student Life, a 75,000 square foot building offering a cafe, coffee house, meeting rooms, study areas and student services office. The project is expected to be completed by fall 2027. Shell Energy Stadium in Houston's East Downtown, or EaDo, will host the FIFA 2026 Fan Festival, featuring an indoor food court, mini soccer fields, interactive activities and more on a 39-day basis to watch the 104 matches of the World Cup. Sugar Land City Council approves the Lake Pointe Green redevelopment project, which seeks to repurpose more than 1 million square feet of office space, parking lots and trails of the former Fluor engineering and construction firm headquarters. University of Houston-Downtown expands into Amegy Bank's downtown building, which will be used for workshops, classes, events and more. The new 17,000-square-foot space on the 10th floor of the Amegy Bank building is called UHD@1801 Main, or “The Launchpad.” Education Alvin Community College has approved an online bachelor’s degree in nursing after the increased demand for nurses with bachelor’s degrees from local healthcare providers. Houston ISD commits $40 million to both HVAC and roofing updates, in which $21.2 million would go toward HVAC system repairs. 28 schools are projected to receive upgrades. Houston Livestock Show and Rodeo commits to $500,000 in vocational scholarships in 2025 and increased to benefit 10 Houston-area colleges and trade schools. Memorial Hermann Health System and Aldine ISD partner with HEAL High School to offer health care career training and clinical experience in a school-within-a-school model. Texas A&M University will run the Federal Aviation Administration’s new Center for Advanced Aviation Technologies, which will consist of an airspace laboratory, flight demonstration zones, and testing corridors. Health Care Harris Health plans to open its $1.6 billion hospital at Lyndon B. Johnson site in early 2029 with approximately 400 employees. Houston Methodist ranks first in the 2025 Premier’s 15 Top Health Systems list under the  "Large Health Systems" category. The annual list ranks health systems based on clinical outcomes, extended outcomes, operational efficiency and patient experience. Kinder Foundation donates $150 million for a new healthcare facility focused on combating childhood cancer in partnership with The University of Texas MD Anderson Cancer Center and Texas Children’s Hospital. Innovation  Aurora has opened an over 90,000-square-foot terminal at a Fallbrook Drive logistics hub in northwest Houston to support the launch of its first “lane” for driverless trucks—a Houston-to-Dallas route on the Interstate 45 corridor. Ara Partners raises $800 million for its first-ever infrastructure-focused fund, targeting mid-market industrial decarbonization assets that are economic without federal incentives. Bank of America funds the restoration of Houston's iconic Rothko Chapel, including a documentary about the restoration. CenterPoint Energy Inc. (NYSE: CNP) builds out new tools and 100 weather stations around Greater Houston to prepare for hurricane season. Daikin Industries completes a nearly one-megawatt solar power plant at its Daikin Comfort Technologies North America campus southeast of Waller, projecting to eliminate an estimated 845 metric tons of carbon emissions each year. Downtown Houston+ has implemented a $400,000 pedestrian lighting project, deemed the "Underpassage," that will brighten a stretch of downtown Houston at Texas Avenue and Rusk Street in light of the FIFA 2026 World Cup Fan Festival. Harris County has approved a five-point Climate Justice Plan to address issues relating to ecology, infrastructure, economy, community and culture. Intuitive Machines plans an orbital reentry vehicle, backed by $10 million from the Texas Space Commission, to fly fly autonomously and be capable of landing at airfields. Mercury Fund continues to leverage artificial intelligence to improve efficiency and decision-making processes within industries, drawing interest from traditional VC hubs. Rice University has opened the headquarters for the new RBL LLC incubator at Texas Medical Center, aiming to incubate three to four biotech companies annually.  Transportation  Downtown Houston+ leads the Main Street Promenade project, turning a stretch of Main Street into a pedestrian-friendly corridor in Downtown Houston. The $12 million project will work on seven blocks of Main Street that stretches from Rusk Street to Commerce Street. Houston ISD explores a partnership with METRO as it retools its transportation services for the 2025-2026 school year. Southwest Airlines Co. (NYSE: LUV) has filed an application seeking approval from the Department of Transportation to broaden its international flights in accordance to the Open Skies agreement, which would permit future flights to over 130 countries that are subject to the agreement. 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.
Read More
Membership

New Partnership Members in April

5/5/25
The Greater Houston Partnership welcomed 18 new member companies in the month of April. 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 April include: 512 Financial: Headquartered in Austin, 512 Financial is a business and consulting service with experts in accounting, finance, HR, and marketing, offering sophisticated fractional services to propel businesses forward. Website. 7th Echelon: 7th Echelon is a cybersecurity company based in Houston, specializing in providing tailored security solutions and services to help organizations protect their digital assets and infrastructure from evolving cyber threats. Website. Allstar Pizza & More: Allstar Pizza & More is a pizza company with locations in Clute and Lake Jackson, Texas, known for serving up a variety of pizzas, along with other menu items. They aim to provide delicious food and a welcoming atmosphere for the community in the Brazosport area. Website. Avatar Innovations: Avatar Innovations is a Canadian-based venture studio focused on driving energy transition by partnering with the oil and gas sector to develop and implement innovative CarbonTech solutions. Website. Bot Auto: Bot Auto is an L4 autonomous trucking company based in Houston, Texas that operates an autonomous truck fleet and offers Transportation as a Service (TaaS) to freight customers. Website. BrightMind Consulting Group: Based in Houston, BrightMind Consulting Group is a business management consulting firm that partners with organizations to drive strategic growth and operational excellence through tailored solutions in areas like business transformation, technology adoption, and organizational development. Website. Charles River Laboratories: Charles River Laboratories provides essential products and services to help accelerate the discovery, early-stage development, and safe manufacturing of novel drugs and therapeutics. They offer a comprehensive portfolio that supports pharmaceutical and biotechnology companies worldwide in their efforts to improve human health. Website. Dayforce: Dayforce is a global human capital management (HCM) software company that offers a unified platform for payroll, benefits, workforce management, talent management, and HR service delivery, empowering organizations to manage their entire employee lifecycle from recruitment to retirement. Website. Galaxy Technology Hires: Galaxy Technology Hires is an engineering and technology recruitment firm, headquartered in Houston, Texas providing custom solutions to name generation and sourcing, to research and organizational mapping, to full cycle recruiting. Galaxy Technology Hires also offers retained search, contingent search, executive search, and recruitment process outsourcing (RPO) services. Website. K & K Data Service Inc.: K & K Data Service Inc. is a company based in the United States specializing in comprehensive data center construction, operational maintenance, and related integrated solutions. Website. League of Women Voters of Houston: League of Women Voters of Houston is a nonpartisan political organization that encourages informed and active participation of citizens in government and influences public policy through education and advocacy. Website. Libyan National Oil Corporation: The Libyan National Oil Corporation (NOC) Houston Branch serves as a crucial hub for managing and executing turnkey procurement on behalf of all Libyan oil subsidiaries. This branch is tasked with selecting professional suppliers, establishing key framework agreements, and supporting vital training programs to enhance the industry's capabilities. Website. Logica Corp: Logica Corp delivers innovative technology solutions and consulting services, specializing in areas like data analytics, cloud computing, and custom software development to help businesses optimize their operations and achieve their strategic goals. Website. Maintenance Warriors: Maintenance Warriors provides comprehensive commercial and residential property maintenance services, offering solutions for everything from handyman repairs and cleaning to landscaping and preventative maintenance. Website. Markovich Grover PLLC: Markovich Grover is a Houston-based law firm specializing in complex commercial litigation, bankruptcy and restructuring, and energy litigation, representing clients across various industries with a focus on achieving favorable outcomes through strategic and effective legal advocacy. Website. MetroNational: MetroNational is a prominent Houston-based real estate development and investment firm known for its diverse portfolio of commercial, residential, and mixed-use properties that have significantly shaped the city's landscape. Website. Shell Federal Credit Union: Shell Federal Credit Union is a member-owned financial institution serving the Houston, Texas area, offering a range of financial products and services such as checking and savings accounts, loans, and investment options, with a focus on providing personalized service and supporting the financial well-being of its members. Website. Weltrio: WelTrio is a Houston-based company specializing in providing comprehensive language solutions, including translation, interpretation, and localization services, to help businesses and individuals communicate effectively across diverse linguistic and cultural landscapes. 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.
Read More

Related Events

Membership

Women in Government Reception

The women of the Greater Houston Partnership’s Public Policy Division are pleased to invite you to our Women in Government Reception, an event designed to celebrate and connect women who are making an impact in…

Learn More
Learn More
Executive Partners