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Home Research Best States for Women Small Business Owners in 2024
The number of small businesses has been increasing in the United States over the past several years. Last year, the White House announced that more than 10 million small businesses were created in 2021 and 2022. Along with its growth in the total number of businesses, the U.S. is also seeing growth in the number of women-owned businesses in the country.
The number of women-owned businesses in the U.S. increased 13.6% from 2019 to 2023, making up 39.1% of all of the country’s businesses, according to research from Wells Fargo. In total, women own 13.8 million businesses employing 10 million workers and generating $3.9 trillion in revenue across the U.S. While this growth may be encouraging for women small business owners to see, it’s helpful to see which states are more favorable to start and run a new small business in.
Lendio analyzed seven metrics to determine the best states for women small business owners, including factors such as share of employer businesses owned by women, percentage of female-owned businesses that earn a revenue of $1 million or more, percentage of patents filed by women, and women’s VC funding (deal count) per woman-owned businesses.
No. 1: Washington
Washington is a great state for women small business owners, considering 42% of its small businesses are owned by women. Of those businesses, 34% make a revenue of $1 million or more. Washington’s employment rate among women (59%) is also high compared to other states. Other studies have also consistently ranked Washington as a great state for women’s overall economic and social well-being.
No. 2: Colorado
Colorado scores high for percentage of employer businesses owned by women (36%), employment rate among women (63%), female-owned businesses that earn a revenue of $1 million or more (27%), and percent change of women-owned businesses from 2012 to 2020 (19%). Each of these high scores makes Colorado a well-rounded state for women small business owners.
No. 3: Delaware
With a high percentage of patents filed by women (13%) and the highest percentage of women’s VC funding per woman-owned businesses (6%), Delaware is a great state for women small business owners to start and run their businesses in.
No. 4: Oregon
Scoring higher than the averages in most of the metrics we measured, Oregon is an excellent state for women small business owners. Some categories it scores exceptionally well in include percentage of employer businesses owned by women (39%), percentage of female owned businesses that earned a revenue of $1 million or more (29%), and percentage of patents filed by women (15%).
No. 5: California
As a powerhouse in share of employer businesses owned by women (38%), percentage of female-owned businesses that earned a revenue of $1 million or more (32%), and percentage of women’s VC funding per woman-owned businesses (4%), California can be a great state for women small business owners.
No. 6: Utah
With a high growth in the number of women small business owners between 2012 and 2020 (22%) and high employment rate among women (60%) Utah is a great place for women small business owners to start and run their small businesses.
No. 7: Maryland
With more and more women becoming small business owners in Maryland (12% increase between 2012 and 2020), the state can be a fantastic option for women looking to start and run their own small businesses. The state also has a high percentage of women filing patents (14%), making it a great place for women inventors.
No. 8: Arizona
Arizona has a high percent increase of women small business owners between 2012-2020 (17%) and a high percentage of female-owned businesses making a revenue of $1 million or more (30%). These high rankings place Arizona eighth on our list, making it an outstanding state for women small business owners.
No. 9: Hawaii
Hawaii is an exceptional state for women small business owners. The Aloha State scores higher than average in share of employer businesses owned by women (38%), percentage change of women owned businesses between 2012 and 2020 (29%), and percentage of female-owned businesses that made a revenue of $1 million or more (25%).
No. 10: Wyoming
Much like Hawaii, Wyoming also scores higher than average in share of employer businesses owned by women (38%) and percentage of female-owned businesses that made a revenue of $1 million or more (31%). Landing at spot number ten, Wyoming is a great state for women small business owners.
The runner-up states tend to more broadly excel in their share of employer businesses owned by women (34% average) and in their employment rates among women (58% average). For example, Montana has a 39% share of employer businesses owned by women and 61% of its women are employed.
Few other runner-up states scored lower percentages in the categories stated above. However, those states make up for lower-than-average percentages in these categories with higher-than-average percentages in other categories. For example, Vermont ranks at 32% in its share of employer businesses owned by women (lower than the average of 34%), but 13% of its patents are filed by women (11% average) and 2% of its women-owned businesses received VC funding (1.16% average).
Women have valuable experiences and skills they can contribute when building their own businesses. While it can be exciting to run your own business, getting your new gig up and running takes a great deal of effort. These tips will help you get going with your startup:
Women’s contributions to the American economy continue to grow and become more pronounced. While women-run businesses are becoming more common, they still come across hurdles that aren’t as common for male-run businesses to face. For example, as of February 26, 2024, women-owned businesses received just 32.6% of the approvals and 28.4% of the dollars offered in SBA 7(a) and 504 loans in the 2023 fiscal year.
This fact, along with our findings emphasize the importance of empowering and acknowledging the importance of women entrepreneurs, encouraging their continual success in business.
We used the most recent data for the seven metrics listed below to determine the best states for women entrepreneurs. We used a Z-score distribution to scale each metric relative to the mean across all 50 states and Washington, D.C., and capped outliers at 3. A state’s overall ranking was calculated using its average Z-score across the seven metrics. In cases where states were missing data due to a low sample size, the remaining metrics were averaged to determine their overall scores. Here’s a closer look at the metrics we used:
*Information provided on this blog is for educational purposes only, and is not intended to be business, legal, tax, or accounting advice. The views and opinions expressed in this blog are those of the authors and do not necessarily reflect the official policy or position of Lendio. While Lendio strives to keep its content up-to-date, it is only accurate as of the date posted. Offers or trends may expire, or may no longer be relevant.
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