AUSTIN (KXAN) — According to a new analysis by LinkedIn’s Economic graph team, Austin comes in at No. 2 for recent business-formation growth.
Hotspots for new entrepreneurs:
- San Francisco
- Miami-Fort Lauderdale
- New York City
- Los Angeles
The report noted that those metros span all major time zones in the country.
“Austin, Texas (No. 2) and Chicago (No. 5) are standouts in the central U.S., while Denver (No. 10) is the Mountain time zone’s presence. On the West Coast, Seattle (No. 3), San Francisco (No. 4) and Los Angeles (No. 9) are leaders,” the report said.
George Anders, an author of the report, said a few years ago it seemed like fewer Americans wanted to start a business.
“From 2007 through 2018, only 1.1 of every 1,000 U.S. residents founded a business each year, down from a more robust 1.6 in 2005, according to the Kauffman Foundation,” Anders wrote.
However, he pointed out that the pandemic might have “rekindled people’s desires to run their own show.”
“Kauffman data shows that by 2021 (the most recent year available), the U.S. rate for starting one’s own business had rebounded to 1.5 per 1,000,” the report read.
In this analysis, researchers ranked metros by the largest growth in their Company Formation Index from June to August 2023, compared with the same time in 2022.
“This index is the three-month average count of unique companies on LinkedIn, measured by the number of LinkedIn members who added a new founder position to their profile, indexed to the corresponding count in 2016. We include only LinkedIn members who added a founder position in the same month that the new job began,” the report said.
A new wine business
Gabe Anderson poured himself into opening his new 13,000-square-foot business Vintage Wine Storage in Northwest Austin.
It just opened its doors three weeks ago.
Anderson said it’s an off side wine storage facility offering a temperature and climate controlled space for customers to keep their wine collections.
“Bringing people together that want to store their wine off site and also drink wine together in the facility in the tasting room,” Anderson said. “For wine collectors, we have a backup generator. We provide pickup and delivery. We accept wine shipment delivery. Basically just trying to make the life of a wine collector easier.”
Anderson said he and his family moved to Austin seven years ago from Dallas. He noticed there wasn’t a facility like this in the area.
“This is my idea for the growing city of Austin that I thought would serve a purpose and serve a need,” he said.
Anderson said Austin is the perfect city for this and a variety of other new businesses as well.
Many others agree.
“2023, for sure has been a significant uptick in the amount of people who are showing interest in running their own business,” said Franchise Consultant with FranNet Kyle DeHaas.
DeHaas said more people are starting businesses where there’s economic consistency.
“Where people are buying the service or product over and over again,” DeHaas said. “I think home consumer services are strong, children’s education, senior care and personal services like health, beauty and fitness.”
Ultimately for Anderson, he’s excited to be a part of Austin’s thriving business community as he embarks on this new journey.
“Bring people together to drink wine and enjoy the facility and just enjoy a good time,” Anderson said.
Factors to the growth
When it comes to why we’re seeing this growth, Opportunity Austin Chairman Gary Farmer said part of it is thanks to the city’s vibrant workforce.
“All of these young, educated, entrepreneurial, innovative young people,” Farmer said. “They want their shot. I’m proud to say that they’re taking it.”
Farmer said there are also more financial resources to support growing businesses and companies in Austin with more investors and venture capitalists.
“When a growing young company would achieve certain benchmarks along the way, where they needed more and more and greater amounts of capital, they would have to move away to more money center locations,” Farmer said. “We are that money center now.”