Houston's reputation for being an entrepreneurial and business powerhouse was just snubbed in WalletHub's new list of the "Best Large Cities to Start a Business" in 2025. The Energy Capital of the World only moved up four spots and ranked No. 34 nationwide.
The annual report ranked 100 U.S. cities based on 19 metrics across three main categories: business environment, access to resources, and costs. Factors considered in the report include five-year business survival rates, job growth comparisons from 2019 and 2023, office space affordability, and more.
The sunny Florida city of Orlando (No. 1) topped the list as the best large city for starting a business this year.
Houston's business climate has improved slightly since 2024 when the city previously ranked No. 38.
Houston performed the best in the national business environment category, ranking No. 33 out of all 100 cities in the report. It fell behind in the categories for "business costs" and "access to resources" and only mustered up into No. 50 and No. 65, respectively.
"Starting a business can be very scary, considering one in every five startups doesn’t make it past the first year," said WalletHub analyst Chip Lupo. "That’s why it’s especially important to live in a city that provides an environment where new businesses can thrive, with enough capital, workers and customers to keep it going long-term."
Despite this study's less-than-stellar review of the city's entrepreneurial spirit, there are many Houston-based businesses that reigned superior on Fortune’s 2025 list of "America’s Most Innovative Companies."
Local space tech startups are also pioneering new low orbit projects and lunar missions, so the city clearly has an appreciation for innovation.
Elsewhere in Texas
Austin was the only Texas city to rank among the top 10 best big cities to start a business in 2025, climbing up into the No. 3 spot.
"Businesses that are currently in Austin are thriving, as the city has a very high growth rate in the number of small businesses," the report said. "It also has the best employment growth in the country, which makes it more likely that new businesses will be able to find employees."
Dallas-Fort Worth had the greatest concentration of cities on the list, contributing six out of 13 total Texas cities, and all of them among the top 50: Fort Worth (No. 11), Arlington (No. 15), Dallas (No. 16), Irving (No. 22), Garland (No. 29), and Plano (No. 43).
Other large Texas cities that were named among the best places to start a business in 2025 include Lubbock (No. 33), Laredo (No. 44), San Antonio (No. 64), El Paso (No. 67), and Corpus Christi (No. 70).
The top 10 best large cities to start a business in 2025 are:
- No. 1 – Orlando, Florida
- No. 2 – Tampa, Florida
- No. 3 – Austin, Texas
- No. 4 – Jacksonville, Florida
- No. 5 – Miami, Florida
- No. 6 – St. Petersburg, Florida
- No. 7 – Boise, Idaho
- No. 8 – Atlanta, Georgia
- No. 9 – Raleigh, North Carolina
- No. 10 – Hialeah, Florida
