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Owning your own business is the quintessence of the American Dream. The freedom of self-employment and control of your own earnings is a temptation for many, a feeling shared by 9.6 million people across the nation, according to the Bureau of Labor Statistics.
Yet for generations of women, it was an unattainable goal. Until 1988, a spouse or male relative was required to co-sign a loan application, and the glass ceiling of the workplace extended to entrepreneurship. This changed when Congress signed the Women’s Business Ownership Act, the first piece of legislation to recognize the contribution of female entrepreneurs to the American economy.
Nowadays, the United States has one of the best track records when it comes to female entrepreneurship. Analysis from Mastercard in 2019 ranked America as the best nation in the world at empowering female-led businesses, and other research backs this up; in 2021, nearly half (49 percent) of new ventures were started by female founders. With business thriving across the United States, which cities and states are home to the most female-owned companies?
OnDeck has analyzed U.S. Census Bureau data for more than 900 thousand organizations in U.S. state and every major city to find out which proportion of business owners in every state and metropolitan area are owned by women. To be classified as an owner, a person needs to have at least 10% of a business.
The highest proportion of female-owned companies in the United States can be found in the St. Louis Metro Area, Missouri, where 24.84 percent of registered businesses are founded by women, according to the U.S. Census Bureau’s 2021 Annual Business Survey.
A higher percentage of female-founded organizations are based in Alaska (24.7%) than any other U.S. state, closely followed by Colorado (23.8%).
Just 14.8% of companies in Salt Lake City are owned by women — the lowest proportion of any urban area in the United States.
St. Louis Leads the Way For Female-Owned Businesses
Entrepreneurial activity worldwide, particularly for women, has been passive because of the COVID-19 pandemic. The Global Entrepreneurship Monitor revealed a 15% decrease in female-led initiatives between 2019 and 2020. Yet this does not paint the complete picture for women-owned companies across the United States, particularly in major cities.
One such place is St. Louis in Missouri. The study reveals that the Midwest city and larger metropolitan areas have the highest proportion of female-owned businesses in the U.S., with 24.84% of companies owned by women. The Riverfront City has a reputation for female entrepreneurship, with a Seek Capital analysis identifying over 2,700 women-owned startups, making a combined revenue of $150-500 million.
St. Louis is closely matched by Denver, Colorado, according to research shows that 24.80% of businesses in the Mile-High City have female owners. A local CBS News survey in 2020 discovered that 56% of women struggled to maintain their businesses through the depths of the Coronavirus pandemic. Still, Denver’s city council has responded with a new $637K entrepreneurship center directed at empowering startups led by women and ethnic minorities.
Almost a Quarter of Alaska’s Companies Are Owned By Women
While America’s major population centers support female-owned companies with local business initiatives and commerce groups, which of the 50 U.S. states are organizations most likely to be owned by women?
Alaska is exceeding expectations when it comes to female entrepreneurship. Despite having both the third-smallest GDP and labor force in the United States, analysis reveals that 24.71% of its companies are held by women — the highest proportion of any state.
A 2018 report by the Center for Economic Development found Alaska’s high proportion of female-owned companies drives economic growth in the state, with 15% posting earnings of $1 million or more. In 2022, the Small Business Administration opened a Women’s Business Center to increase the state’s economic activity — the last of all 50 states for one to open.
Less than 15% of Businesses in Salt Lake City Are Female-Owned
Though cities like St. Louis and Denver are making advancements, the country’s capital has the nation’s third-best track record with gender equality in entrepreneurship. The study reveals that 24.62% of ventures in Washington, D.C., have female proprietors. Their companies have come from city institutions, and a 2018 American Express analysis named the area among the 10 best cities for economic growth among women-owned businesses.
Not every U.S. city is making the same strides, however. Salt Lake City in Utah has the fewest female-owned businesses in the nation, with just 14.81% of companies possessed by women. While Utah Governor Spencer Cox claims that more can be done on an administrative level to support women in business and politics, a white paper from the Utah Women and Leadership Project argues Utah must find a way to enhance its gender equality record, calling for support to open 1,000 new female-owned companies in the state.
Are Women-Owned Businesses Thriving in the United States?
The analysis reveals that female ownership accounts for less than 25 percent of all business owners across every American city or state.
So why are females still underrepresented in business? A McKinsey report on women highlights racial and gender disparities in the wider workplace despite women demanding more from their employers.
Yet, these same struggles are identified in self-employment. Though one in five businesses in America is female-owned, they receive only 2 percent of all venture capital funding from investors. Undoubtedly, the COVID-19 pandemic set entrepreneurs back, yet the Bureau of Labor Statistics data illustrates that females were disproportionately affected — leading to many defining the downturn as a ‘shecession.’
However, there are more optimistic signs ahead. The study from the Global Entrepreneurship Monitor in 2022 features that women now run a third of the world’s high-growth companies. Also, Pitchbook research of investments reveals that a record $40.4 billion of funding was raised across 2,661 deals by female-led initiatives.
Across the United States, can women become better represented in company ownership, making successful initiatives that become institutions within city businesses? Time will tell.
As per the U.S. Census, a company owner is defined as a person that controls at least 10% of the business, up to a maximum of four people owning the largest share.
The team estimated the percentage of female business proprietors within each geographical location’s total number of company owners. We then ranked U.S. states and the top 50 most populated U.S. metros by the percentage of female business owners. Delaware and Minnesota are excluded from the analysis because of the insufficient data.
