Female entrepreneurship is growing at an unprecedented rate. Between 1997 and 2015, an average of 608 new women-owned businesses opened per day, American Express’ 2015 State of Women-owned Businesses report states. Since 2007, this number has increased to an average of 1,072 a day.
The report surveyed the 50 states to find which ones have the fastest-growing rates of women-owned firms, as well as which boast the most overall economic clout for female-owned companies. Here’s a look at some of the states that came out on top as being the most friendly for female business owners.
North Dakota hosts 23,500 women-owned businesses, accounting for one-third of the state’s small businesses and $3.9 billion in annual sales, the American Express’ report also states. Bismarck’s Center for Technology & Business (CTB) explains that rural areas such as North Dakota have fewer metropolitan areas and employment opportunities, favoring entrepreneurship.
The CTB also says there are better opportunities for online education and more programs supporting female business owners. North Dakota Senator Heidi Heitkamp and Small Business Administration (SBA) Administrator Maria Contreras-Sweet recently organized a roundtable discussion to promote North Dakota female entrepreneurs. The roundtable drew attention to resources such as the North Dakota Women’s Business Center and the SBA’s Women-Owned Small Business Program (WOSB), which work together to provide women with one-on-one business assistance, resources on starting up, financing information and loans.
For five years in a row, North Dakota has also ranked second highest in the nation after Massachusetts for business climate competitiveness in the Beacon Hill Institute’s annual State Competitiveness report, earning this ranking due to factors such as infrastructure investment, educational attainment, business incubation and skilled labor availability.
Nearby South Dakota joined its northern neighbor at the top of the American Express list of states where women-owned businesses wield the most economic clout. South Dakota also came in third for business climate competitiveness in the Beacon Hill Institute’s report. The state’s competitive advantages include strong government support for business in the form of low tax rates. South Dakota has the second best tax climate for businesses in the nation after Wyoming, with no corporate or individual income tax, according to the Tax Foundation’s 2016 State Business Tax Climate Index.
South Dakota also ranks highest in the nation for its business incubation climate, according to the Beacon Hill Institute. Over the last decade, the SBA has processed over 2,400 loans to South Dakota businesses, approved $684 million of loans, sustained 21,500 jobs and generated over $1 billion for the state’s economy, illustrating the key role the SBA plays in empowering female entrepreneurs in the state.
Tying North and South Dakota for women-wielded economic clout was Texas, which hosts four of the top 10 most female-friendly metropolitan areas: San Antonio, Dallas, Austin and Houston. Like South Dakota, Texas has no corporate or individual income tax. It also has a strong business incubation climate and is third in the nation for exports abroad, the Beacon Hill Institute says.
CNBC ranks Texas as the second best state in the nation for business due to its top ranking economy, second highest ranking infrastructure, excellent access to capital, skilled workforce and support of technology and innovation. Unlike rural states such as North and South Dakota, Texas has large metropolitan areas.
This brings more business opportunities, but it also has the drawback of raising the crime rate relative to places such as the Dakotas, so if you open a brick-and-mortar business in a large Texas city, it may be worth your while to invest in a security camera system as a precautionary measure.