Best Texas Cities for Small Businesses

B2B Reviews’ most recent study ranks Texas as the third best state to start a business. Texas scored high because of its high economic score (17.80), lack of state income tax, and growing workforce.

We examined the Texas environment and business opportunities more closely. By comparing the most populous cities across five key metrics, B2B Reviews discovered which cities are best for small businesses in 2025.

Read our methodology below to learn more about how we determined our rankings.

Top 10 Cities in Texas for Small Businesses

Take a closer look at the top 2025 Texas cities on our list.

1. Fort Worth

Fort Worth, Texas takes the top spot on our list. As the fifth largest city, it has 3.21% of the population and 2.97% of employer firms. The county has no sales tax on top of the state’s rate, meaning the rate is only 6.25%. The city also was in the top ten for population growth, with a 5.94% increase from 2020 to 2023.

• City population: 978,468
• Population as a percentage of state population: 3.21%
• Population percent increase (2020-2023): 5.94%
• Percent of employer firms: 2.97%
• Sales tax rate: 6.25%
• Average cost of commercial real estate (per SF): $17.38

2. San Antonio

The second most populous city takes second place. It has 4.90% of Texas’s population and 4.85% of all employer firms. Despite seeing a higher average commercial real estate cost ($20.76), San Antonio has no sales rate in addition to the state’s rate, and it saw a 3.89% population increase in recent years.

• City population: 1,495,295
• Population as a percentage of state population: 4.90%
• Population percent increase (2020-2023): 3.89%
• Percent of employer firms: 4.85%
• Sales tax rate: 6.25%
• Average cost of commercial real estate (per SF): $20.76

3. Houston

Houston comes in third, having the largest percent of population on our list, at 7.59%. However, it only saw a 0.65% increase in population. Despite this, 12.52% of all Texas employer firms are in Houston, making it a hub for businesses of all sizes.

• City population: 2,314,157
• Population as a percentage of state population: 7.59%
• Population percent increase (2020-2023): 0.65%
• Percent of employer firms: 12.52%
• Sales tax rate: 6.25%
• Average cost of commercial real estate (per SF): $19.42

4. Arlington

Coming in forth is Arlington. It’s the seventh largest city, with 1.31% of the population. It’s affordable commercial real estate cost ($18.58), percentage of employer firms (1.35%), and steady growth in population (1.06%), earn Arlington its spot.

• City population: 398,431
• Population as a percentage of state population: 1.31%
• Population percent increase (2020-2023): 1.06%
• Percent of employer firms: 1.35%
• Sales tax rate: 6.25%
• Average cost of commercial real estate (per SF): $18.58

5. Dallas

Dallas takes fifth place. Despite a decrease in population, Dallas is the third largest city in texas, with 4.27% of the population. It also has the second-most number of employer firms, at 6.28%. The county has no additional sales tax, and its average commercial real estate cost is affordable for the area, at $19.79 per square foot.

• City population: 1,302,868
• Population as a percentage of state population: 4.27%
• Population percent increase (2020-2023): -0.03%
• Percent of employer firms: 6.28%
• Sales tax rate: 6.25%
• Average cost of commercial real estate (per SF): $19.79

6. Grand Prairie

Grand Prairie comes in sixth place. The smaller city (with only 0.66% of the population) saw a large population increase, at 3.00%. With that increase, the low tax rate, 0.60% of employer businesses, and affordable commercial real estate costs ($14.16), Grand Prairie is a great city for small businesses looking for a growing and affordable business environment.

• City population: 202,134
• Population as a percentage of state population: 0.66%
• Population percent increase (2020-2023): 3.00%
• Percent of employer firms: 0.60%
• Sales tax rate: 6.25%
• Average cost of commercial real estate (per SF): $14.16

7. Austin

Austin, the Texas capital, takes seventh place, having 3.21% of the population and 5.88% of employer firms. It saw a decent increase in population, at 1.46%. However, it’s higher commercial real estate cost ($26.28) brings it lower on our list.

• City population: 979,882
• Population as a percentage of state population: 3.21%
• Population percent increase (2020-2023): 1.46%
• Percent of employer firms: 5.88%
• Sales tax rate: 6.25%
• Average cost of commercial real estate (per SF): $26.28

8. Frisco

Frisco comes in eigth for its larger population increase of 10.98%, the sixth biggest increase of the cities on our list. With no additional sales tax, leaving it at 6.25%, and 1.12% of all employer firms, Frisco is a promising location for businesses. However, it’s higher average commercial real estate costs ($31.30) do make it one of the more expensive locations on our list.

• City population: 225,007
• Population as a percentage of state population: 0.74%
• Population percent increase (2020-2023): 10.98%
• Percent of employer firms: 1.12%
• Sales tax rate: 6.25%
• Average cost of commercial real estate (per SF): $31.30

9. McKinney

McKinney, Texas comes in ninth. It has 0.70% of the population and saw an 8.11% increase between 2020 and 2023. It has a decent percentage of employer firms, at 0.83%, and no additional county sales tax.

• City population: 213,509
• Population as a percentage of state population: 0.70%
• Population percent increase (2020-2023): 8.11%
• Percent of employer firms: 0.83%
• Sales tax rate: 6.25%
• Average cost of commercial real estate (per SF): $23.43

10. Garland

Garland completes our top list in tenth place. Despite seeing a population decrease (-1.15%), Garland has 0.80% of the population and 0.83% of all employer firms. Additionally, it has one of the lowest average commercial real estate costs ($13.96), making it a great place for small business owners.

• City population: 243,470
• Population as a percentage of state population: 0.80%
• Population percent increase (2020-2023): -1.15%
• Percent of employer firms: 0.83%
• Sales tax rate: 6.25%
• Average cost of commercial real estate (per SF): $13.96

Methodology

B2B gathered a list of Texas’s 50 most populous cities using data from the United States Census Bureau.

We ranked the cities within five key metrics that influence small business success. These included the city population percentage, population increase from 2020 to 2023, employer firm percentage, combined state and county sales tax rates, and the average commercial real estate cost per square foot.

Each metric was worth a total number of points, which combined equaled 100. Cities were then scored on this 100-point scale

Population as a Percentage of State Population—Total 20 Points

We compared each city’s population to the population of Texas and found the percentage. Cities with a higher percentage scored better, as a higher percentage equates to a larger consumer base.

Population Percent Increase (2020-2023)—Total 20 Points

To determine general population growth, we compared each city’s population in 2020 and 2023. Cities with a larger percent increase in population scored higher.

Percent of Employer Firms—Total 20 Points

To get an idea of each city's business environment, B2B Reviews used Census Bureau data to determine the number of employer firms in each city. We then compared that number to the total number of employer firms in Texas to determine the percentage. Cities with a higher percentage earned more points.

Sales Tax Rate—Total 20 Points

We looked at the sales tax rates for both state and county. Areas with a lower combined sales tax rate scored better.

Average Cost of Commercial Real Estate (per SF)—Total 20 Points

Real estate costs change city by city. Using realtor services, we determined the average cost of commercial real estate per square foot in each city on our list. Cities with a lower average cost earned more points.

The Bottom Line

Texas is a great place for businesses to start out and thrive. With a growing population, low sales tax, and a booming business environment, entrepreneurs are sure to find a great place to set up shop.

If one of the cities on our list stands out to you, be sure to do further research to ensure that it's a good fit for you. Consider the following:

• Consistent Consumer Base: Ensuring a city has a large potential consumer base is vital. Research the locals and decide whether your business would appeal to them and keep them returning.
• Local Resources: Look for financial support options, such as grants or tax incentives. Also, consider networking opportunities and other support groups for business owners.
• Business Presence: Always look at the existing businesses in an area. Are they thriving? Is the local economy good? Does the area seem oversaturated or under?
• Possible Expenses: Some cities might have more associated costs than others. Be aware of all possible expenses and decide whether they are worth it.

Texas is a great state for growing businesses, and each city has plenty of opportunities. Discover which U.S. cities are best for small businesses.

Fair Use Statement

Feel free to share our findings for non-commercial purposes; however, please provide a link back to this page so readers can see our full methodology.