In early 2004, I moved my company,Greenleaf Book Group , from just outside Cleveland, Ohio, to Austin, Texas. There were a number of reasons we left Ohio, but the two biggest were that hiring was difficult and the taxes were absurdly high.
In Texas we would avoid city, county, regional and state taxes, all of which we paid in Ohio. In Austin we also found an energetic workforce with an entrepreneurial spirit. To my surprise and joy, our employees wanted to be measured by the work they did; they were natural capitalists! (To be sure, Austin leans left, but it’s more of a social left; they all understand why we’re in business and help us make money.)
Greenleaf Book Group took off in Texas. We grew our revenue ten times in the past eight years and are on track for our best year ever. We’re still in Texas — rated again the top state for business by CNBC.
So what is it about Texas that makes good companies better and attracts people? Texas has been able to tie the two together — people and businesses, and provide a great climate for both. Texas’s success is the free market at work. States compete with each other and states like Texas get more people, better talent and stronger businesses while states like California have no money, multiple cities in or almost in bankruptcy and an acceleration of companies leaving the state for better business climates (like Texas).
Texas is succeeding for a number of reasons. The biggest is that Texas is good for business and for people. Any business is only as good as the people it employs, so we can’t just look at the state’s relationship with business; the people are just as important. A few examples of how the strengths work for both business and employees:
• Taxes: Texas has no income taxes. (There is the “Margin Tax” on the gross profit of some companies, but it’s small in comparison to other tax burdens.) Employees take more money home and spend as they see fit.
• Infrastructure: The roads, rail and air travel infrastructure of Texas is second to none. United Airlines, Southwest and American Airlines all have hubs in Texas, making commerce easy and flexible travel for residents.
• Relatively business-friendly government: Compared to most other states, Texas is small on government and high on personal liberty. This attracts successful businesses as well as talented employees who want to succeed on their own merit.
• Strong Business Climate: The Texas reputation for fostering a strong business climate has become its own driver as successful entrepreneurs are gravitating to be near other entrepreneurs and companies that could be clients or partners. This ‘hub’ of positive business activity naturally encourages highly talented people to migrate here to work with other highly talented people.
• Quality of Life: Sure, it’s hot in the summer, but Texas is a great place to live and raise a family. Top schools, hospitals, entertainment, sports and outdoor recreation make it fun to live here. We all use this to our advantage, too; we entertain clients, vendors and employees here.
It’s no surprise that Texas was rated number again in CNBC’s “America’s Top States for Business” study. Texas has been great to Greenleaf Book Group and we will continue to run our business here. If another state wants to encourage us to move, they’ll have to show us they can provide more for our business, and our people.
Clint Greenleaf is the founder and CEO of Greenleaf Book Group.GBG, an Inc. 500 Company, is a leading publisher and distributor with several "New York Times" and "Wall Street Journal" bestsellers.
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