In the past two years, despite the Covid-19 pandemic, the number of businesses owned by women entrepreneurs has grown. As per the Women’s Business Enterprise National Council, this number has grown to reach nearly 13 million in the US.
As per a recent study, the conditions are better for women-owned businesses in some states over the others. The states that are favourable for women entrepreneurs include California, Colorado and New York.
Best US states for women-owned businesses
Going by a study from boutique lending firm Clarify Capital, the US states have been ranked for being suitable for women-owned businesses. The rankings were given based on metrics such as percentage of female-owned small businesses, women-to-men pay ratios, female unemployment rates, number of female-owned companies per 10,000 residents in each state.
It also took the number of women-owned businesses in each state with an annual revenue of $1 million or more.
As per the rankings, here are five best states for women-owned businesses.
- California
- Colorado
- New York
- Florida
- Vermont
Unsurprisingly, California, the home of Silicon Valley is at the top. The state is home to over women-owned businesses with over $1 million in annual revenue. Besides, it ranked fifth among all 50 states when it comes to gender pay gap. California has taken steps to narrow the gender pay gap by signing the Equal Pay Pledge in January, which is aimed at improving pay equity among the government workforce.
In addition to this, California is one of the top states in the US for funding female-founded startups with an average of $10.2 million per deal for female founders in recent years, claims PitchBook. Lending California in this aspect is Massachusetts with a $13 million average.
Colorado, which has ranked second saw a 52% bump in women-owned businesses since 2002. It has the most female-owned businesses per 10,000 residents in the business. New York trails behind at the third position, offering the second-best gender pay ratio and the third-highest number of women-owned businesses with at least $1 million in annual revenue.
Worst US states for women-owned businesses
The report by Clarify Capital also shows states the states that have got the lowest rankings due to higher female unemployment rates and women-to-men pay ratios that fall below the national average. The states that are not suitable for women entrepreneurs include:
- West Virginia
- Mississippi
- Alabama
- Arkansas
- Kentucky
West Virginia that ranked last in this report has the highest female unemployment rates and the lowest number of women-owned businesses per 10,000 residents. Next comes Mississippi with a poor gender pay gap. The same applies to Alabama that was ranked 48.
