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Study Shows Texas, U.S. Cities With Most Profitable Businesses

Patch logo Patch 7/16/2019 Tony Cantu
© Provided by Planck, LLC, d/b/a Patch Media

AUSTIN, TX — Among the nation's city's with the highest percentage of businesses making a profit, Austin ranked 13th in a new study — the highest corporate success rate for a Texas city.

LendingTree researchers set out to find the Metro Areas with the Most Profitable Businesses as they titled their report, finding that 67.63 percent of the capital city's 22,814 businesses — 15,430 of them — turned a profit during the studied period.

In order to rank the metro areas with the highest share of profitable firms, researchers compared the total number of firms with employees in a metro area to the number of firms in a metro area reporting profits — thus yielding the share of profit-making firms by metro area. The metro areas were ranked highest to lowest based on this figure. Data for all figures come from the U.S. Census Bureau’s 2016 Survey of Entrepreneurs.

Other Texas cities didn't fare as well as 13th-ranked Austin.

  • At the other end of the spectrum, Houston has the largest share of businesses reporting losses at 23.37 percent, or 13,271 out of 56,793 total businesses. Energy companies like Exxon Mobil and Chevron have a big presence in Houston, though an industry-wide profit slowdown this year has impacted the oil and gas producers, refiners and chemical makers that are majorly influential in Houston’s economy, as media outlets have reported. Houston lost 300 jobs in energy, exploration and production in the 12 months ending in February 2019, along with drops in retail, employment services and restaurants and bars, according to the Texas Workforce Commission. Among the positives are an uptick in durable goods manufacturing, professional, scientific and technical services, health care, wholesale trade and oil field services.
  • Dallas followed closely behind in the fourth rank of most number of unprofitable businesses. Of the city's 70,034 businesses, 14,194 of them reported losses. That's 20.27 percent of the total number of businesses that were unprofitable.
  • San Antonio had the next highest number of unprofitable businesses among the big metros. Of its 18,847 firms, 3,705 — or 19.66 percent — reported losses, according to the Lendingtree findings.
  • Austin fared better with 4,227 (18.53 percent of total businesses) of the 22,814 total not pulling a profit.

Seattle takes the bragging rights across the nation's big metros. There, 70.93 percent of the company's businesses — 36,643 of the total 51,661 — were profitable, according to the analysis. That performance was good enough to rank the Washington city tops on the list.

Here's a quick look at the top 10 cities with the largest share of businesses making losses, according to the report:

  • Houston - 23.37 percent.
  • Virginia Beach, Virgina - 21.99 percent.
  • San Jose, California - 20.40 percent.
  • Dallas - 20.27 percent.
  • Pittsburgh - 20.24 percent.
  • Baltimore - 19.80 percent.
  • San Antonio, Texas - 19.66.
  • Birmingham, Alabama - 19.61 pecent.
  • New York City - 19.57 percent.
  • St. Louis - 19.30 percent.

"Launching a business is notoriously risky — a majority of private firms survive their first, second, even fifth years in business, but fail by the 10-year mark. Economic conditions, competing companies, lawsuits and even weather pose a threat to small businesses," researchers noted in their report.

To read the full report, click here.

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