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Austin, TX
Austin-Round Rock
MSA: Austin-Round Rock, TX
Best places ranking: #8 among large metro areas
Population: 1,652,602
Entrepreneurial ventures and small businesses have thrived in Austin, which has a number of angel investment groups that focus on startup businesses. The state capital, like the rest of Texas, is known for its business-friendly tax structure -- no state personal income tax, no corporate income tax -- and support for business development, particularly in the technology sector.

The Austin metro area, which has doubled its population growth in the last 20 years, is often used as a test market by national companies because its large minority population reflects the nation's future demographic mix. With University of Texas college students in residence, the area offers entrepreneurial opportunities for the youth market and skilled workers for local businesses. One-third of the area's payroll is related to technology jobs, contributing to Austin's reputation for having one of the most educated workforces in the nation.

Challenges cited by business owners center around transportation issues. The number of flights and routes serviced by airlines can be problematic compared with larger markets. Mass transit is not plentiful.

While the summers can be scorchers, residents enjoy outdoor activities year-round. Austin is home to a vibrant music, film, theater and arts community, and is known for its annual SXSW and Austin City Limits music festivals. -Dinah Eng

Launch Toolbox:
Resources for getting started in Austin, TX

BORROW

Local smallbiz lenders

  • Randolph-Brooks Federal Credit Union
  • Wells Fargo & Company
  • Compass Bancshares
  • Superior Financial Group
  • Frontier Bancshares
See all local lenders

Austin Business Statistics
Employer establishments with 1-49 employees
(2007)
37,296 78,289
Small business growth rate
(2004-2007)
13.3% 5.3%
State business tax climate ranking
(out of 50 states)
7 N/A
Percentage of population with bachelor's degree
(ages 25-34)
38% 32.7%
Violent crime
(rate per 100,000 inhabitants, 2007)
344.1 537.6
Property crime
(rate per 100,000 inhabitants, 2007)
4,126.4 3,700.0
Population growth
(2003-2008)
19.5% 6.38%
Per-capita income
(2007)
$37,238 $41,342
Per-capita income growth
(2002-2007)
20.2% 25.0%
GDP (in millions)
(2006)
$71,176 $164,601
GDP growth
(2001-2006)
33% 32%
Average hourly wage
(2008)
$20.46 $21.03
Housing foreclosure rate
(first half of 2009, 1 per every X housing units)
173 113
Median rent
(2009, for a 2-bedroom housing unit)
$972 $981
Housing price-to-income (HPI) ratio
(first quarter of 2009)
2.1% 1.8%
Long-term HPI ratio
(20-year average, 1984-2004)
2.0% 1.9%
HPI deviation from long-term average
9% 0.0%

All statistics are for the full Metropolitan Statistical Area. For a complete list of data sources, see "How we picked the Best Places."

From the November 2009 issue
"Startups are very successful in Austin because of access to capital and the talent that's here. " -Michael Humphrey
Best Places Winners
MAPS
What do you think of Austin?
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Do you prefer a place that is: Small Medium Large
The factors that matter most to me are:
 Affordable wages  Few foreclosures
 Educated workers  Low housing costs
 Low crime  High local incomes
 A growing economy  Population growth
 Growing small business population

ireportTell us why: Low taxes? Talented workers? An active small business community? Send us your photos and videos, and you could be featured in our upcoming coverage of reader-picked Best Places to Launch. More
This year we partnered with the Ewing Marion Kauffman Foundation to find the 50 most business-friendly communities in America.

With help from Robert Fairlie, an economist and leading scholar of entrepreneurship at the University of California, Santa Cruz, we developed a methodology and sifted through such data on factors such as per capita income, hourly wages, workforce quality, crime rates, taxes and foreclosures. More

Comments? E-mail the editors
Data partners

This package was produced in partnership with the Ewing Marion Kauffman Foundation.

Foreclosure data provided by RealtyTrac.

Housing price-to-income data provided by Moody's Economy.com.

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