Best Places for Women Entrepreneurs

MagnifyMoney researchers analyzed the 50 largest U.S. cities to determine where women business owners are seeing the most success. Cities were scored in four categories relating to income, business earnings, rate of incorporation and entrepreneurial parity between men and women.

The results show women on the West Coast are most poised for success, though our top cities represent a range of regions.

What we considered in our analysis

Income for self-employed women. We looked at both median and average business income for self-employed women in each city. In an ideal scenario, both numbers are high. However, a wide gap between the two could indicate more opportunity for potential earnings for self-employed women in a certain area.

Business earnings for self-employed women compared with wage earners. We compared income for self-employed women to earnings for women who work for wages. Self-employed women generally make less than those with earned income. A smaller difference between the two amounts could imply that women may benefit from going into business for themselves.

The rate of self-employed and incorporated women. The rankings reflect the percentage of self-employed women, as well as how many of those women have incorporated their businesses. A high rate of self-employment may suggest low barriers to entry for women entrepreneurs. A large amount of incorporated businesses could indicate women are seeing enough success to consider legal and tax implications of business ownership.

Parity of business ownership between women and men. We analyzed the percentage of women among all self-employed people and owners of incorporated businesses in each city. Places with higher percentages could have a more even playing field for women.

Key findings

• San Francisco ranked No. 1 for the second year in a row. The top two cities belong to California’s Bay Area, as San Jose isn’t far behind on the list.
• Several other California cities cracked the top 10, including Los Angeles, Sacramento and Riverside. Business incomes tend to be high in these cities, though exorbitant costs of living could present a challenge to women entrepreneurs.
• Across all metro areas, women own about 30% of incorporated businesses. Women are better represented among self-employed workers, which could include women with small ventures that don’t require incorporation. On average, about 37% of self-employed people are women.
• Buffalo, Cleveland and Indianapolis are the lowest-ranked places on our list. Women in these cities are less likely to pursue entrepreneurship, and those who do have lower incomes than women who work elsewhere.

Top places for women entrepreneurs

Women in our top places earn decent average income from their own businesses and make up nearly half of self-employed workers in their respective locations.

1. San Francisco

San Francisco took the top spot with a final score of 76.5 — a few points lower than 2018, but still high enough to hold on to first place. Nearly 11% of working women are self-employed, and 21.5% own an incorporated business. Business income for women is $27,840, on average, about 35% of what women earn when working for wages. Of all self-employed people in the city, women make up 42.3%, and they comprise 32.6% of all owners of incorporated companies.

Women’s entrepreneurship groups throughout San Francisco host regular networking events and panel discussions. The local government is also supportive of women-owned businesses. For instance, the San Francisco Office of Economic and Workforce Development provides grants through the San Francisco Women’s Entrepreneurship Fund.

2. San Jose

San Jose moved up from its previous No. 3 ranking receiving a final score of 75.9 this year. Women business owners earn an average of $28,891 – more than women in San Francisco – and that income is 35.7% of women’s income from earned wages. Slightly more than 8% of women in the city are self-employed, and 23.8% run an incorporated business. Those women comprise nearly 42% of all self-employed workers in San Jose and 33.2% of owners of incorporated establishments.

Women business owners in San Jose can turn to numerous local groups for support and resources, such as the local eWomenNetwork chapter and the Women’s Networking Alliance. The AnewAmerica Women’s Business Center, which also operates in Oakland, also provides training and counseling to help women grow their businesses.

3. Hartford

Hartford jumped from No. 18 to round out our top three best places for women entrepreneurs with a score of 67.4. On average, women business owners earn $27,534, which is 43.7% of women’s earned wages, a higher percentage than the first two cities. Although just 5.9% of women are self employed, 25.5% own an incorporated business. Of all self-employed people in the city, 34% are women. Additionally, women account for 24.8% of incorporated business owners in Hartford.

Hartford saw an improvement in business earnings for women entrepreneurs in this year’s ranking, which contributed to its rise on our list. Women business owners can find support from Greater Hartford’s chapter of eWomenNetwork, Innovation Destination: Hartford and the Women’s Business Center at the University of Hartford.

Bottom places for women entrepreneurs

The cities ranking lowest in our study generally have lower business income for women entrepreneurs than the top cities. Orlando, at No. 45, has a median business income of $809, meaning at least half of self-employed women earn that amount or less.

Fewer women in these cities have ventured into business ownership as well. With a smaller number of women entrepreneurs in the area, it may be harder for business owners to establish professional networks or find mentorship among other women — this kind of support is often essential to emerging startups.

However, the data could indicate the entrepreneurial climate is poor for self-employed people in general, not solely women. Although it may be possible to operate a successful company in these cities, women may want to proceed with caution before starting a new venture here.

How women business owners can beat the odds

Living in one of the best cities won’t guarantee success any more than starting in one of the worst cities will ensure failure. Wherever they live, women entrepreneurs must chart their own path to self-employment. If you have a financial advisor they may be able to provide the investment advice necessary for starting a business.

For women ready to take their first steps toward entrepreneurship, these tips could help them get further faster.

• Explore the business landscape of your specific city. Research local regulations and bylaws that could be pertinent to your business idea. For example, you can start checking out everything from business licensing laws to local small business tax breaks to help build out your business plan. You can also research nearby small businesses to see which are doing well to get insights into how to set your own venture up for success.
• Seek out local resources for women entrepreneurs. Many cities recognize the important role small businesses, startups and self-employed workers play in fueling local economies. And some have responded with support systems designed to foster growing businesses — and women entrepreneurs who lead them. One example is the San Francisco-based nonprofit Girls in Tech, which seeks to empower and educate women (including entrepreneurs) in the tech industry. Even bottom-ranked Buffalo, N.Y, has local organizations focused on supporting women entrepreneurs, such as the Allstate Minority and Women Emerging Entrepreneurs Program from the University at Buffalo.
• Network with other self-employed women. Don’t underestimate the power of meeting, working with and learning from like-minded, entrepreneurial women. The local organizations mentioned above can be the perfect way to connect with other women entrepreneurs in your area. You can also look for co-working spaces, entrepreneurship-centered meetups or social events for local businesswomen to grow your network.

Methodology

Each of the 50 largest metropolitan statistical areas (“MSAs”) was scaled against one another, so that the most positive result for each factor was 100 and the most negative was 0 on the following eight factors from the U.S. Census Bureau’s American Community Survey for 2017 available through FactFinder or calculated from microdata housed in IPUMS USA. The results for each factor were then weighted according to the notation below, and the sum was divided by eight (rounded to one decimal point), for a highest possible score of 100 and a lowest possible score of 0.

• Median business income for self-employed women (double weight)
• Average business income for self-employed women (double weight)
• Ratio of median business income to median earned income for the metro (double weight)
• Ratio of average business income to average earned income for the metro (double weight)
• Percentage of working women who are self-employed (single weight)
• Percentage of self-employed women who are incorporated (single weight)
• Percentage of self-employed people who are women (single weight)
• Percentage of incorporated people who are women (single weight)to become business owners.