10 Best States for Women to Start a Business

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Last Updated:June 12, 2023

10 Best States for Women to Start a Business

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Who runs the world? Girls! Well, not yet, but for those of us still trying, a 2023 report reveals the states where women wanting to start their businesses have the best opportunity for success.

The report, released earlier in 2023 by Merchant Maverick, found of the top states, women have the best opportunity if they head west: 5 of the top 10 states were west of the Mississippi River. The Midwest, Plains, and South were the least likely to offer the proper support to support women entrepreneurs.

The report gathered evidence of companies led by women, owned by women, employing the most number of women, and startup survival rate of at least one year. It also examined the venture capital invested in women business owners, the average income of women owning their own small businesses, and state income tax rates and unemployment rates in its metrics.

Which states are the best states for female entrepreneurs? First, let's look at those that need some work and key takeaways.

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Boss babes

The report found that across the nation, only 28.2% of employer-led businesses were headed by women. Those businesses run by women only employ about 20% of employees. While men running the show average $103,047 yearly earnings, women doing the same thing only earned $59,415 on average – a sad comparison to their male counterparts.

When it comes to funding women startups, the stats are dismal: Only 2.3% of capital invested in venture-backed startups goes to women. The 10 worst states for women entrepreneurs?

Nebraska
Michigan
South Carolina
North Dakota
Arkansas
Oklahoma
West Virginia
Tennessee
Alabama
Mississippi

The 10 best places for women-led startups

10. Illinois

Illinois has moved to a higher spot, drastically improving the business success rate. It made gains in venture capital investments and moved up 13 spots this year. Illinois also ranks high in terms of affordability as compared to several other states.

9. North Carolina

North Carolina has made significant progress in the top 10 for the first time over the past two years. It has 28.2% of women-led firms.

The state has a number of startups and early-growth companies, mainly in the field of life sciences.

8. Florida

With awesome state income tax and a good percentage of self-employed women, Florida is not only for retirement. There are more than 1 million women-owned businesses in the state.

In South Florida, Michelle Fee and Vicky Garcia own one of the biggest pre-Covid companies in the state, Cruise Planners. In Orlando, Elizabeth Burch owns Dignitas Technologies, which employs 150 in two locations and brings in nearly $15 million in revenue.

7. WYOMING

Wyoming has jumped into the top 10 this year. It leads the nation in the percentage of women who own a business, and shows that women entrepreneurs can survive the rugged business climate as well as limited availability of capital.

6. Virginia

Virginia was one of the top five states for women to start a business in 2021, but it has slipped this year. The business survival rate in Virginia is 79% and is in the top 10 for percentage of businesses owned by women. Old Dominion has over one billion dollars going to women-led startups.

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5. Texas

The only state in the southwest topped the list for having the best state income tax rate. The money loaned to women to start businesses was also healthy, and there are upwards of nearly 100,000 women-owned businesses in the state.

It also has the strongest venture capital scene outside the Northeast and California.

4. Arizona

Due to ranking third in women-led businesses, this state has moved up five places this year. It ranks 16th in the nation for average income and has 30% women-led businesses which means one-fifth of the businesses in Arizona are women-owned.

3. California

The Pacific Coast is well represented on this list, but it's Cali that is No. 1 in investment capital given to women-led startups.

California's own research has reported more than 1.5 million businesses owned by women in the state but also found they are small and average less than one employee.

2. Washington

The best of the Pacific Coast states, Washington is one of the best for women leading employer-led companies, as well as providing venture capital to women.

Women-led companies bring in more than $100 million to the state, where women head more than a quarter of businesses. Denise Tabbutt and Nicole Engle can claim the top spot for Saltchuk Resources, which draws in more than $5 billion in revenue.

1. Colorado

Topping all of the states, Colorado does best at employing women and giving financial assistance to women-led startups. It's also in the top five for employer-led companies run by women.

The State of Women-Owned Businesses Report, released by American Express, (which includes many of the states in this top 10 list), found Denver experiencing the biggest growth but the entire state ranks high because it has nearly a quarter of its businesses led by female bosses. 2.5% of Colorado women own their own firm.

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The bottom line

The coronavirus and inflation had a big effect on all businesses. Even in Colorado, a survey of 1,000 businesses with female founders reported three-fourths relied on financial help to survive, and the bounce-back could take some time to return them to a healthy small business status. But don't let that off your own dreams of entrepreneurship. States nationwide are offering small business loans and looking to support more women in startups.

Images courtesy of Shutterstock and Pixabay.

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Lissa Poirot is Joy Wallet’s Head of Content and an award-winning journalist and editor with a focus on finance, travel and health. Her work has appeared online and in print, and she has often been cited as a source on both. She currently resides in Pennsylvania.

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