(stacker) – The number of small businesses in the United States has increased in recent years.
Last year, the White House announced that more than 10 million small businesses were created in 2021 and 2022.
In the United States, as the total number of businesses increases, so too does the number of businesses run by women.
According to a Wells Fargo study, the number of women-owned businesses in the United States increased by 13.6% from 2019 to 2023, accounting for 39.1% of all businesses in the country.
Collectively, women own 13.8 million businesses across the United States, employ 10 million workers, and generate $3.9 trillion in revenue.
While this growth may be encouraging for women small business owners, it would be useful to know which states are more favorable for starting and operating these small businesses.
Lendio analyzed seven indicators to determine the best states for women small business owners. This includes factors such as the percentage of female-owned employer businesses (those with employees) and the percentage of women-owned businesses with revenues of $1 million or more. Proportion of patents filed by women and female venture capital funding (number of deals) by women-owned firms. For more information on how these rankings are calculated, see Methodology.
Main findings
- Washington is a great state for women small business owners. Washington state has the highest percentage of women-owned businesses (42%) than any other state, and the highest percentage of women-owned businesses with revenue of $1 million or more (34%).
- Delaware has the highest number of female VC funding deals per female-owned business in the country. In Delaware, 6% of women-owned businesses have received VC funding. This is a much higher percentage than other states, with an average of 1.16% of women-owned businesses receiving VC funding. Many businesses across the United States are incorporated from Delaware, which is a contributing factor to this high percentage.
- The top states are mainly concentrated in the West. Delaware and Maryland are the only non-Western states in the top 10 on this list. Top-performing states typically have higher percentages of employer businesses owned by women (e.g., 39% in Montana and Oregon) and had higher growth rates for women-owned businesses from 2012 to 2020 (e.g., Utah state (22%).
top states
1. Washington
Washington is a great state for women small business owners, with 42% of small businesses run by women. Of those businesses, 34% earned her more than $1 million in revenue. The employment rate for women in Washington state (59%) is also high compared to other states. Other studies consistently rank Washington as the best state for women's overall economic and social well-being.
2. Colorado
Colorado has the highest percentage of employer businesses owned by women (36%), women employed (63%), women-owned businesses with revenue of $1 million or more (27%), and women-owned businesses It has a high score in the rate of change. Business from 2012 to 2020 (19%). These high scores make Colorado a thriving state for women small business owners.
3. Delaware
Delaware has the highest percentage of patents filed by women (13%) and the highest percentage of female VC funding per women-owned business (6%), giving female small business owners a chance to start a business. It's a great state to run a business in.
4. Oregon
With above-average scores on most metrics measured, Oregon is a great state for women small business owners. Categories with very high scores included percentage of employers owned by women (39%), percentage of women-owned businesses with revenue of $1 million or more (29%), and percentage of patents filed by women. For example, percentage (15%). ).
5. California
Share of employer businesses owned by women (38%), share of women-owned businesses with revenue of $1 million or more (32%), and share of women-owned VC funding per business owned by women (4%) ), California can be a great state for women small business owners.
6. Utah
With a significant increase in the number of women small business owners from 2012 to 2020 (22%) and a high female employment rate (60%), Utah has a , a great place to run a business. business.
7. Maryland
More women are becoming small business owners in Maryland (up 12% from 2012 to 2020), making Maryland an ideal choice for women looking to start and run their own small businesses. can be a great option. The state also has a high percentage of women filing patents (14%), making it a great place for female inventors.
8. Arizona
Arizona had a higher percentage of women small business owners (17%) and a higher percentage of women-owned businesses with revenue of $1 million or more (30%) from 2012 to 2020. These high rankings place Arizona in her No. 8 spot on the list, making it a standout state for women small business owners.
9. Hawaii
Hawaii is an exceptional state for women small business owners. The Aloha State has the highest percentage of businesses owned by women as employers (38%), percent change in women-owned businesses from 2012 to 2020 (29%), and the highest percentage of women-owned businesses that have made $1 million in revenue. Percentage of companies score higher than average. or more (25%).
10. Wyoming
Like Hawaii, Wyoming also scores above average for the percentage of employer businesses owned by women (38%) and the percentage of women-owned businesses with revenue of $1 million or more (31%). Masu. Ranked 10th, Wyoming is a great state for women small business owners.
runner-up
Runner-up states also tend to do better more broadly in terms of the percentage of employers owned by women (34% on average) and female employment rates (58% on average). For example, in Montana, 39% of employer businesses are owned by women, and 61% of women are employed.
Few other runner-up states had lower scores in the categories listed above. However, these states compensate for lower-than-average rates in these categories with higher-than-average rates in other categories. For example, Vermont has 32% of employers owned by women (lower than the average of 34%), but 13% of patents are filed by women (compared to an average of 11%), and women have fewer patent applications. 2% of applications are filed by women. Owned companies received VC funding (1.16% on average).
5 tips for women to start a business
Women have valuable experience and skills that they can contribute when building their own businesses. Running your own business may be fun, but getting a new job up and running requires a lot of effort. These tips will help you move forward with your startup.
Create a Robust Business Plan – Start with a well-researched business idea that focuses on your unique value in your chosen industry or niche. Consider your finances, marketing tools, and operational plans.
Research financing and grant opportunities for women – The Small Business Administration offers programs, grants, and financial assistance for women small business owners. One example of the assistance the SBA provides is through the Office of Women Business Owners, which helps advocate, educate, and support women small business owners. Various organizations and nonprofits also offer financial support and programs for women small business owners.
Establish a strong legal and financial foundation – Research the differences between LLCs, sole proprietorships, and corporations and choose the type of business structure that makes the most sense for your business. Also, make sure you keep your personal and professional finances separate and comply with federal and local regulations.
Network – Connect with other small business owners, women, and mentors who can support your journey into small business ownership. Spread the word about your business by joining groups specific to your industry and getting involved in your local business community.
Develop patience – Starting and running a business takes time and patience. With the right tools in place, you can stay persistent while building your business.
Women still face startup challenges
Women's contributions to the American economy continue to grow and become more prominent. Although women-owned businesses are becoming more common, they still face hurdles that are less common than men-owned businesses. For example, as of February 26, women-owned businesses had received only 32.6% of approvals and 28.4% of the amount provided for SBA 7(a) and 504 loans for fiscal year 2023. Ta.
This fact, along with these findings, underscores the importance of empowering women small business owners, recognizing their importance, and encouraging their continued success in business.
methodology
This analysis used the latest data on the seven metrics listed below to determine the best states for women small business owners. We used a Z-score distribution to scale each metric relative to the average for all 50 states and Washington, DC, with an upper limit of 3 for outliers. The state's overall ranking was calculated using the average Z-score across the seven indicators. If data were missing for each state due to low sample size, the remaining indicators were averaged to determine an overall score. Let's take a closer look at the metrics used.
- Percentage of Employer Businesses Owned by Women (Including Shared Ownership), 2021 (Census Bureau)
- Female employment rate, 2022 (Bureau of Labor Statistics)
- Percentage of women-owned businesses with revenue of $1 million or more (Census Bureau)
- Change in percentage of total number of businesses owned by women (employer and non-employer businesses combined) from 2012 (Census Bureau – 2012) to 2020 (Census Bureau – 2020)
- Percentage of patents filed by women (U.S. Patent and Trademark Office)
- Women VC funding (number of deals) by women-owned companies (Pitchbook)
- Gini Index of Overall Income Inequality (Census Bureau, 2021)
This article was produced by Lendio and reviewed and distributed by Stacker Media.
Copyright 2024 Stacker via Gray Media Group, Inc. All rights reserved.
