If you’re thinking about starting a small business, El Paso is a great place to open one. It is considered one of the top 10 safest cities in America, and according to CNBC in 2016, it’s the 16th best place in the country to start up shop.
Which might come as a surprise, since El Paso is not that well known. But, if you look at the city’s affordability, location, and culture, you’ll see why El Paso’s so business friendly. Many people don’t know that this city is in the top 10 biggest exporters in the country. What are the factors to contribute to El Paso’s commerce?
- El Paso Cost of Living
- Taxes in El Paso
- The US Mexico Border in El Paso
Why start a business in El Paso TX?
There are actually a lot of reasons that make El Paso one of the best cities in the US. Here, we are going to focus on the factors that help small business thrive.
Cost of Living
As of 2019,USA Today ranks El Paso as the city with the lowest cost of living (a person’s monthly expenses averaging out around $1,200), which means, you cannot live anywhere else in America today that’s cheaper than El Paso. Not having huge monthly living costs allows you more financial freedom, to pay for start-up costs, advertisement, hiring, just to name a few. The affordable living in El Paso is perfect for small business owners, particularly when taking into account how expensive it is to start a business.
The average cost, according tothe US Small Business Administration, of starting a small business is around $3,000. That means, to be a business owner in El Paso, you’d need to save up around $4,000. Now, if you lived in another city, such as San Francisco, where the cost of living is around $4,000, you’d have to save $7,000. That’s a huge difference, not even accounting for the monthly maintenance costs you’re responsible for,which is way higher in San Francisco, even though both cities share a similar population size.
Not many people know that El Paso is the 20th largest city in America. It has a population close to 900,000, more or less the same as San Francisco. And, it is considered the 4th fastest growing city in America. These are all important factors to consider when opening a business. No one wants to start a company when a city’s economy and population is dying, and El Paso’s exactly the opposite— it’s growing and thriving, even predicted to increase job growth by 35% in the next ten years .
The Benefits from the Border
If the cost of living is not convincing enough for you, consider the location of El Paso. El Paso is a border city, meaning Mexico, particularly the city of Juárez, is often in view, just across the highway. As such, both cities have a huge impact on one another’s economy, so much so that the border is the fifth busiest place of transport in America, generating billions of dollars a year. Opening a small business in El Paso would make you part of this highly successful and profitable community, where you’re supported by two countries, two economies.
The U.S. Department of Transportation estimates about 20,000 people cross into El Paso daily, and 20-30% of those who travel to America do so for recreational reasons, while the other percent comes for work. That means a large volume of daily travelers brings the potential for profit, especially when taking into account Juárez’s population of about 1.3 million, which adds, according to a study done by SABER Research Institute in 2012, about 446 million dollars annually to El Paso’s economy. Not many cities have such high traffic, and if you tried opening a small business in another state, you’d lose out on all this profit.
In addition, if you’re savvy, you can use Mexico’s close proximity to your advantage. Some local businesses in El Paso import materials and goods from Mexico, lowering their overhead costs and increasing their profit. For instance, the owner of a craft store in an article for Marketplace, discussed how establishing a trade network in Mexico allowed her business to not only expand, but also to move to a high-traffic part of town, which would have been otherwise impossible.
Other places in America don’t have this cost-effective opportunity simply because they are not located so close to the border. If you start a small business in El Paso, you gain this unique, exclusive opportunity and increase your chances at running a business with the lowest production costs, while operating at your highest possible profit. Who wouldn’t want to do that?
Being located in Texas means that El Paso benefits from the state’s favorable tax climate. Compared to the tax structure of most states, business taxes are extremely low in Texas, and the state has no personal income tax. Both of these are a recipes for success. When you start your business and generate profit, you’ll keep more money in your pocket. More money for you means more opportunity for investment and ensuring your small business will stay afloat.
For new small business owners in Texas, business taxes have been shrinking. Depending on how much revenue you make, your business tax rate can even be zero. Many places in America don’t offer such incentives, and when opening your business, you need to account for how the taxes will influence your business.
Having a small business in such a low taxable environment, means you can use your profits to create a life you love. US News and World Report ranks El Paso as the 5th best place in the country to retire. It’s important to consider the city your business is operating in because you’ll have to be happy living there. If you create a small business in El Paso, you’ll know you are apart of a vibrant community that will allow you to succeed both personally and professionally.