Starting a business can be tough, but if you live in a small town South Texas, it could be a whole lot tougher. According to a new ranking by personal finance site WalletHub, the Rio Grande Valley is one of the most difficult places in the country to launch a business, particularly if you’re trying to start one outside of a major metro.
WalletHub analyzed more than 1,300 municipalities across the United States in order to determine its ranking of “Best & Worst Small Cities to Start a Business” in 2026. And according to its analysis, cities in the Valley rank in the bottom half of the list.
The highest-ranked Valley city was Pharr, which is located in Hidalgo County and boasts one of the busiest international bridges along the southern Texas border. Pharr was ranked 723 out of 1,334 cities. Mission and Edinburg were ranked fairly similarly, at 729 and 741, respectively. But Weslaco and Harlingen were much lower at 929 and 968. In the ranchlands, Kingsville came in at 1,207 out of 1,334 cities.
So just what makes deep South Texas such a tough market to try to launch a business in? WalletHub officials say smaller cities can give entrepreneurs several advantages, including lower startup costs and a more business-friendly atmosphere. But smaller towns may also have fewer resources available to aid small business owners.
“The benefits of starting a business in a small city include lower overhead costs, stronger relationships with customers and the potential to become a big fish in a little pond,” WalletHub analyst Chip Lupo said.
“But there are drawbacks, too. Entrepreneurs who want to build a large professional network aren’t likely to make as many connections in a town with fewer residents. Other restrictions might include limited industry options, a less diverse customer base, and difficulty attracting and keeping top talent,” Lupo added.
To rank all five Valley cities, WalletHub evaluated a mix of factors across three main categories:
• Business environment — including average workweek length, commute times, startups per capita, industry diversity and business revenue growth.
• Access to resources — such as availability of financing, investors and workforce talent; higher education access and attainment rates; working-age population; and job growth.
• Business costs — including office space availability, labor costs, corporate taxes and overall cost of living.
Across these metrics, all five Valley cities performed poorly in business environment and ranked around the middle in both access to resources and business costs.