What We Can Learn From WalletHub’s Best and Worst Cities for Women-Owned Businesses
Starting a new business is anything but easy. It requires fierce motivation, novel ideas, capital, not to mention some jumping-through-of-hoops to get all of your appropriate paperwork together. For women business leaders, the challenge may be even a little greater. In response to this, WalletHub recently compiled their list of 2016’s Best and Worst Cities for Women-Owned Businesses.
(Photo Credit: “Nashville,” by Brad Montgomery/Flickr)
“March is women’s history month,” Jill Gonzalez, an analyst with WalletHub, told me when I spoke with her about this study. “So, in light of that, we looked into which areas are really excelling at helping women start and own businesses.”
About the data…
In order to pinpoint which places were the most and least favorable for female entrepreneurs and their businesses, WalletHub examined the 100 largest metropolitan statistical areas in the U.S. along 10 specific metrics.
I asked Gonzalez how different the data would have been if WalletHub had identified the best and worst cities to start a business, regardless of gender. Do female-owned businesses face unique challenges or benefits?
“There are definitely some cities on here that are very easy to start a new business in, so they have that overall new-business friendliness more than others. But, when you’re looking specifically at that female entrepreneurship rank, that’s when things really start to separate.”
This specific ranking is determined through measuring other data points about the area including things like “industry variety of women-owned firms,” “average revenue of women-owned businesses,” and “percentage of women-owned businesses,” to name a few.
Is the climate and culture really that different from one place to the next?
Some parts of the country have much higher percentages of women-owned businesses than others. In Colorado Springs, Colorado, for example, 23 percent of the area’s businesses are led by women. But, in Syracuse, New York, only 13 percent of the businesses are run by women. I asked Gonzalez why there was such a great discrepancy.
“It’s no secret that women have less access to capital, to investors, to just basic resources when they’re starting a business. So I think it is up to a metro area, or up to a state, to take it upon themselves to help them.”
She also mentioned how the state of Tennessee, which has three metro areas in the top five, might be setting themselves apart.
“There are nine incubators there that are women-specific. That’s more than most states have, and some states don’t have any at all. They are really helping women get to resources across the country even though these incubators themselves are in Tennessee. So, you have these people that are helping with investors, with resources from interns to raw materials that a lot of times women don’t have easy access to.”
Businesses run by women in Tennessee do seem to be doing pretty well. Other states and regions would be wise to consider learning from their example. Making these business, and the women who start them, a priority is a critical first step. When nothing is done to address the issues facing women business leaders, progress happens more slowly.
The best of the best and the worst of the worst.
When all the data were compiled, these cities rose to the top (and dropped to the bottom) as the best/worst metro areas for women-owned businesses in 2016.
The three best cities for women-owned businesses.
1. Nashville–Davidson–Murfreesboro–Franklin, TN; total score = 70.4.
2. Chattanooga, TN–GA; total score = 69.79.
3. Columbus, OH; total score = 68.13.
The three cities that are the worst for women-owned businesses.
98. Greenville–Anderson–Mauldin, SC; total score = 31.78.
99. Oxnard–Thousand Oaks–Ventura, CA; total score = 31.64.
100. San Jose–Sunnyvale–Santa Clara, CA; total score = 31.26.
What about the big picture?
So, what can this research tell us, more broadly, about the current culture for women owned businesses?
The fact that research like this is being conducted is important. A greater emphasis on the issues facing female business leaders is certainly a step in the right direction.
“Women-owned businesses are the fastest growing enterprises in the nation,” Gonzalez said. “They’ve been increasing at almost twice the U.S. average and they’ve topped the growth rates of all except those large publicly traded firms in the past two decades or so. We’ve seen a lot of entrepreneurs and women investors really taking this on, from celebrities like Jessica Alba and Kate Hudson, to huge tech moguls. So, I think this is definitely a topic that should be scrutinized, and hopefully the cities at the top of the list can serve as an example for those that need to do some catching up.”
For more information, be sure to check out the full article which ranks the 100 largest metropolitan areas in the U.S. in terms of the best and worst areas for women-owned businesses.
Tell Us What You Think
How does your city measure up? We want to hear from you! Leave a comment or join the discussion on Twitter.