Women entrepreneur opening your own business? Avoid Philadelphia and Pittsburgh if you can, says a new survey.
While women have made strides in the world of business leadership in the past decade, just 30 percent of incorporated businesses across the top 50 metropolitan areas in the U.S. are led by women, according to the study by MagnifyMoney released Wednesday.
Women entrepreneurs experience the most success in cities such as San Francisco, Austin, and San Jose. Five out of the top 10 metros are in California, with another in Washington. Tennessee is also hospitable to female entrepreneurs, with two metros in the Volunteer State landing in the 4th and 5th top spots.
In the ten cities that ranked lowest (Cleveland ranked 50th out of 50, preceded by Pittsburgh at 49 and Philly at 48), self-employed women are earning far less than their counterparts in other cities. In the worst city, Cleveland, women's median business income is $0 — meaning at least half of self-employed women there don't make anything at all.
The worst cities have fewer women who have incorporated a business or taken the plunge into self-employment. This might make it harder for entrepreneurial women in these metro areas to find women mentors and women-centered entrepreneurial networks that can provide support vital to a new and developing business. These cities are inhospitable to self-employed workers or new business owners in general — for both men and women alike, the survey said.
MagnifyMoney surveyed the 50 largest U.S. metropolitan cities to find the best places for women who want to be their own boss, launch a business — or both. To create the rankings, the data about women entrepreneurs looked at the following categories:
Business income for self-employed women. Cities were ranked on both median, meaning half were above and half were below, and mean, or average, business income of self-employed women. By including both metrics, the rankings "capture both the more common experience of self-employed women as well as monetary success overall," said Kali McFadden, senior research analyst at MagnifyMoney. Ideally, both numbers would be in the higher end. A wide range between the two, however, could indicate a broader range of potential earnings for self-employed women in that area.
Business earnings for self-employed women compared with wage earners. Metro areas were ranked on the difference in earnings between self-employed women and those working for wages (both median and mean). In general, self-employed women do earn less median and average incomes than people with earned income. "But a smaller gap between each group's income implies better a potential upside for those going into business for themselves," McFadden said.
The rate of self-employed and "incorporated" women. The rankings considered the percentage of employed women who work for themselves. "A higher rate of self-employment suggests that the city's opportunities and ease of entry into business are better for women," said McFadden.
How many of those self-employed women have an incorporated business. "A higher number means that more women are seeing enough success and permanence to think about the legal and tax implications" of the businesses they own, McFadden said.