Small Business Formation in Texas: What Is Driving New Business Growth Heading Into 2026

Small businesses continue to play a central role in Texas’s economy, and heading into 2026, new business formation is being shaped by a practical mix of population growth, post-pandemic work patterns, and persistent cost pressures. In San Antonio and Bexar County, this growth is less about sudden startup surges and more about steady, neighborhood-level business creation that follows where people live, commute, and spend time.

One of the most lasting shifts from the COVID pandemic is the normalization of remote and home-based work. Census estimates show that roughly 12 percent of workers in the San Antonio area worked from home in 2023, up from about 8 percent in 2021. That change lowered the barrier to entry for many entrepreneurs, making it easier to launch businesses without immediately committing to office or retail space. As a result, many business owners have retained operating models that were initially adopted out of necessity.

This shift is reflected in the continued growth of microbusinesses and solo operators. In Bexar County, there were nearly 190,000 nonemployer establishments in 2023, representing businesses with no paid employees. These businesses often take the form of home-based consultants, catering operations, mobile service providers, online retailers, freelance professionals, and specialized service firms that rely on referrals, digital marketing, and flexible operations rather than traditional storefronts. While less visible than brick-and-mortar businesses, they make up a significant share of local economic activity.

Population growth has also driven demand for businesses that support daily life. New restaurants, coffee shops, childcare providers, fitness studios, personal services, and healthcare-adjacent businesses continue to open in growing parts of San Antonio, particularly along major growth corridors and in expanding residential areas. These businesses are typically designed to serve nearby neighborhoods rather than attract citywide traffic, reflecting a demand for convenience and repeat visits.

Evidence of growth along major commercial corridors is visible in both construction activity and space absorption. Retail construction in the San Antonio area reached its strongest levels since 2019, with more than 600,000 square feet of new or expanded retail space projected through the end of 2025. At the same time, retail occupancy has remained high, hovering above 95 percent, indicating that new space is being absorbed as it comes online rather than sitting vacant.

Traffic and visitation data reinforce this pattern. Along corridors such as Loop 1604, daily traffic volumes routinely exceed 100,000 vehicles, creating consistent exposure for businesses located nearby. In areas like Alamo Ranch, retail centers benefit from millions of annual visits tied to residential density and repeat local trips rather than destination shopping alone. This environment supports small businesses that depend on frequency and loyalty rather than one-time visits.

At the statewide level, business formation remains active but competitive. Between March 2023 and March 2024, more than 86,000 Texas establishments opened, while approximately 78,600 closed, resulting in a net increase of over 7,700 businesses. This pattern reflects steady churn, with new businesses entering the market as others consolidate, relocate, or exit, rather than unchecked expansion.

Rising costs continue to influence how businesses launch and grow. Tight retail vacancy rates place upward pressure on rents, while labor costs have continued to increase, with overall compensation rising more than 3 percent year over year nationally. Operating costs tied to utilities, insurance, and supplies have also remained elevated. In response, many entrepreneurs prioritize focused, sustainable operations rather than rapid or multi-location expansion, allowing them to control costs while building a reliable customer base.

This approach is evident in neighborhood-focused businesses that succeed by deeply understanding their immediate market. Locally rooted operations such as Jefferson Bodega illustrate how businesses can build longevity by serving a defined community and cultivating repeat customers rather than pursuing rapid scale. That model reflects a broader pattern across San Antonio, where many successful small businesses emphasize connection and consistency over expansion.

Texas continues to produce high-growth startups as well, and San Antonio has contributed notable examples. Companies such as Plus One Robotics, which develops vision software for logistics automation, and Darkhive, a defense technology firm focused on secure systems, demonstrate that the region supports businesses capable of scaling nationally. While these companies represent a different segment of the business ecosystem, they underscore the breadth of entrepreneurial activity across the state.

 

Looking ahead to 2026, small business formation in Texas is expected to remain steady and locally driven. In San Antonio, growth continues to be shaped by remote work patterns, a large base of microbusinesses, corridor-based development, and entrepreneurs responding to everyday demand. The emphasis is less on rapid expansion and more on building businesses that integrate into daily life and neighborhood economies.

For residents, these trends are reflected in familiar ways: a new café opening nearby, a service business launching along a daily commute, or a locally owned shop finding success by serving a specific community. Together, these developments point to an economy defined by incremental growth, adaptability, and entrepreneurs building where people already are.