Being an entrepreneur comes with many risks, but also with many benefits like freedom, economic prosperity, and personal satisfaction. Throughout the country, various women-owned businesses are essential to our countries economic progression and job growth. While men own the majority of companies in the U.S, female entrepreneurship is a growing trend that adds to the vitality of the country’s economy.
AdvisorSmith, a leading resource for insurance and small business content, released its newest study where they examined all 50 states and the District of Columbia to find the best and worst states for female entrepreneurs.
Businesses That Have At Least One Female Employee
To find the states where female entrepreneurs are having the most success in their businesses, AdvisorSmith utilized data from the U.S. Census Bureau’s Annual Business Survey. The survey collects data on employer firms, which are businesses that have at least one employee.
Businesses that have at least one employee accounted for over 2 million firms and employed more than 18.1 million Americans.
AdvisorSmith’s study focused on female-owned employer firms, which translated to businesses that were majority female-owned or equally male and female-owned.
To determine the best states, AdvisorSmith examined three factors for female-owned businesses: the average employee headcount, the average payroll, and the percentage of firms with over $100,000 in revenue. AdvisorSmith weighted the three factors for each state at 25, 25, and 50 percent to determine their findings.
To find the average employee headcount, they added the total number of employees at female-owned firms and divided it by the number of female-owned firms in each state. For the average payroll per female-owned firm, they added the total payroll for female-owned firms and divided it by the number of female-owned firms in each state.
To determine the working-age female population, they counted the number of female residents of each state between 20 and 64 years of age. They then divided the number of female-owned firms that reported at least $100,000 in annual revenue by the total working-age female population to find the proportion of female entrepreneurs in the state.
Nationally, female-owned businesses had nine employees on average and an average payroll of $330,171. Female-owned companies with at least $100k in revenue accounted for 1.7 percent of the female labor force nationwide.
These metrics were compared across each state to find the best and worst states for female entrepreneurs.
The Best And Worst States For Female Entrepreneurs
The best state for female-owned businesses was Massachusetts. In Massachusetts, the average female-owned company had 9.7 employees and an average payroll of $451K, both well above the national averages.
The worst state was West Virginia. Female-owned firms in West Virginia had a below-average employee count of 8.6 employees per firm and below-average employee payroll at $241K per firm. Additionally, the state’s female-owned business proportion was only 1.2 percent.
To view the complete study and see all 50 states, please visit https://advisorsmith.com/.