Plus, 5 tips on how to take the leap as a female entrepreneur.
The West Coast is looking sunny for women.
The best city for female entrepreneurs is San Francisco, where the average income for self-employed women is $31,880, based on a new report released Monday by MagnifyMoney. Austin, Texas, where the average income for self-employed women is $25,345, claimed the second spot on the list.
The report used data on how much self-employed women made, business earnings for self-employed women compared with other wage earners, the rate of self-employed (anything from having an Etsy store or offering a few hours of labor on TaskRabbit) and “incorporated” or taxed businesses for women, as well as how much self-employed women made in comparison to men with their own businesses. The data was weighted in the top metro areas in the U.S.
Five out of the top 10 areas that bode well for female entrepreneurs were in California: In San Jose (No. 3), female entrepreneurs had an average income of $30,344 per year; in Los Angeles (No. 6), they had an average income of $20,945; in San Diego (No. 7), they made $20,949; and in Sacramento (No. 8), they made $23,596.
The metro areas where female entrepreneurs made the most also had the highest rates of self-employed women, Kali McFadden, a senior research analyst at MagnifyMoney, told Moneyish. “Women are deciding to enter business in those places, and they’re making OK money,” she said of the top cities in California.
The average income for female entrepreneurs and rates of self-employed women mirror general employment trends, as well: California cities, including San Jose, San Francisco, San Diego, Los Angeles and Sacramento, topped the list of best cities for job seekers in a recent Indeed report. And San Francisco, as well as San Diego, were among the top 21 cities in the 2017 Kauffman Index of Growth Entrepreneurship study.
Here’s the average business income for women in the top 10 places for female entrepreneurs:
- San Francisco: $31,880
- Austin, Texas: $25,345
- San Jose, Calif.: $30,334
- Memphis, Tenn.: $20,399
- Nashville, Tenn.: $23,373
- Los Angeles: $20,945
- San Diego: $20,949
- Sacramento, Calif.: $23,596
- Seattle: $22,713
- Cincinnati: $21,432
Cities that ranked the worst for women entrepreneurs typically have fewer women who are self-employed, McFadden said, and are also seeing an unhappy business landscape overall.
Here’s the average business income for women in the bottom 10 places for women entrepreneurs:
- Cleveland: $9,694
- Pittsburgh $13,153
- Philadelphia: $15,187
- Louisville, Ky.: $13,310
- Indianapolis: $12,822
- Detroit: $16,293
- Birmingham, Ala.: $16,139
- Chicago: $14,622
- St. Louis, Mo.: $13,673
- Buffalo, N.Y: $14,594
Meanwhile, self-employed women earn less on average than people with earned income, the study reported. In fact, the average percentage of self-employed women in the states ranked was only 37%; for women with incorporated businesses, the number went down to 30%.
Here’s how women can make the leap to entrepreneurship and have successful businesses despite the low numbers:
Know the market you’re going into, McFadden advised. “(Your business) may not only be received in different markets differently,” she said, adding that “there might be other things about your local area that might make it more difficult or easier to compete in,” like how many female entrepreneurs are already there and if they are making a lot from their businesses.
Identify what makes you unique compared to other women (and men) in your industry. “In recognizing that they have something to bring to the table and identifying where there are gaps in the market, they can proceed with developing their own business,” business coach Harper Spero told Moneyish.
Make connections with people who are already established. Once you’ve identified what your unique skills are, its important to explore outsourcing or partnering with others who can support the business. “There are many groups and resources for women entrepreneurs where meaningful connections are constantly being made,” Spero said. “There are opportunities to learn from the challenges, failures and successes of others. There are also opportunities to collaborate with other female business owners to take their business to the next level.”
Remember: Slow and steady wins the race. Spero advises first exploring your solo venture while you have a steady paycheck before fully diving in. “Start taking on clients or put feelers out and see if people gravitate towards your business idea,” she said. “Determine a set time when you want to reevaluate your career to see when and if you should take the plunge to run your business full-time.”
Just do it. “I’ve seen too many people spending years mulling over an idea only to find that when they launch, nobody cares and they’re burnt out,” Spero said. “If you spend too much time on a master plan that’s not working out, the thought of a backup plan feels daunting. If you’re willing to pivot yet stay aligned with your mission, you’ll have a much more likely chance of succeeding.”
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