CoworkingCafe's new analysis of the best place for women entrepreneurs to launch and grow businesses has found a winner — the South. It received the highest scores for women's entrepreneurship, economic context and labor and talent pool.
"Strong population growth, expanding local economies and favorable cost conditions are fueling new firm formation," the report announced, based on its analysis of 200 metros, large, medium-sized and small.
Women-owned businesses now account for nearly 23% of all U.S. firms, it stated. They employ nearly 11.7 million people and generate an estimated $3.3 trillion in revenue annually.
However, each region has some unique qualities that support female entrepreneurship.
"The South leads in growth and formation. The Midwest stands out for affordability and stability. The coasts (where they appear at all) lead in earnings and talent density, but at a price that increasingly makes them a hard sell for early-stage founders mindful of their runway," the report commented.
There were other important factors that made specific metros or regions especially favorable for female business leaders. They often already had a relatively high ratio of female-owned firms. Many of the metros also tended to have a high percentage of female university graduates, as well as leading academic institutions.
And they also tended to have supportive infrastructure, like women-led organizations, whether established independently or by civic authorities, focused on providing mentorship, networking or in some cases funding to up-and-coming businesses. Female unemployment rates also tended to be low in the leading cities.
In addition, in the most highly ranked metros for female entrepreneurs, the ratio of female to male pay was often higher than in the country as a whole, though still generally below male wages. In Washington, DC, where 26.3% of all firms are female-owned, women's median earnings were the highest among the nation's biggest metros at $63,220 — with a pay ratio of 78.8 cents on the dollar.
The national median income for women is $42,000, with them earning about 74 cents for every dollar earned by men. In Austin, which ranked first among the best large metros for women-owned businesses, median earnings were $50, 953 and the female/male pay ratio was 75.7%.
Among large metros with one million plus inhabitants, the five with the highest scores for female entrepreneurship were Austin, Denver, Raleigh, Washington, D.C. and Atlanta.
Mid-sized metros, with 500,000 to one million inhabitants, were led by Durham, Charleston, Des Moines, Portland, ME and Fayetteville, AR. These cities offered women entrepreneurs a growing market without the high costs of the biggest metros and a tighter-knit business community.
Many smaller markets, with populations below 500,000, also offered opportunities for business-minded women. This group was led by Naples, Savannah, Crestview, FL, Wilmington and Hilton Head Island.
What drives women to become business owners? According to Census data cited, women are driven by the desire for work-life balance. About 71% of women aged 35-44 said balancing work and family was a major motivator. More than 60% across the 25-44 age spectrum wanted to be their own boss.
"Greater income and community impact round out the picture, painting a portrait of women choosing entrepreneurship not as a fallback, but as a deliberate, career-turning decision," the report said.
The metros that can provide these conditions may be the ultimate winners in harnessing the economic power of women to benefit their communities.
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