Texas ranked 12th for women-owned businesses

The number of women-owned businesses in the U.S. increased 13.6% from 2019 to 2023, but some states perform better for women than others.

Lendio, a free online loan marketplace targeting small business owners, analyzed seven metrics to determine the best states for women entrepreneurs with data from the U.S. Census Bureau, Bureau of Labor Statistics, and others.

The data showed Texas ranked 12th for women-owned businesses.

Texas scores higher than average in the share of employer businesses owned by women, 36%, the percentage of female-owned businesses that made a revenue of $1 million or more, 29%, and the percentage change of women-owned businesses between 2012 and 2020, 24%.

The number of small businesses has been increasing in the United States over the past several years. Last year, the White House announced that more than 10 million small businesses were created in 2021 and 2022.

Along with its growth in the total number of businesses, the U.S. is also seeing growth in the number of women- owned businesses in the country.

In total, women own 13.8 million businesses employing 10 million workers and generating $3.9 trillion in revenue across the U.S. While this growth may be encouraging for women small business owners to see, it’s helpful to see which states are more favorable to start and run a new small business in.

Lendio analyzed seven metrics, including share of employer businesses owned by women, percentage of female-owned businesses that earn a revenue of $1 million or more, percentage of patents filed by women, and women’s VC funding (deal count) per woman-owned businesses.

Key findings

Washington is the no. 1 best state for women small business owners. The percentage of woman-owned businesses in Washington outpaces every other state at 42% and has the highest percentage of female-owned businesses that earn a revenue of $1 million or more, 34%. Delaware has the highest women’s VC funding deal count rate per women-owned businesses in the country. More than 6% of women-owned businesses in Delaware receive VC funding.

This is a much higher percentage than the rest of the states, averaging at 1.16% of women-owned businesses receiving VC funding. Many businesses around the U.S. are incorporated out of Delaware, which is a contributing factor to this high percentage.

Women have valuable experiences and skills they can contribute when building their own businesses. While it can be exciting to run your own business, getting your new gig up and running takes a great deal of effort. These tips will help you get going with your startup: 

— Develop a robust business plan. Start with a well-researched business idea, focusing on your unique value in the industry or niche that you’ve chosen. Consider finances, marketing tools, and your operations plan.

— Research loan and grant opportunities for women.The SBA offers programs, grants, and loan aid for women entrepreneurs.

One example of aid the SBA provides is through the Office of Women’s Business Ownership, which helps advocate for, educate, and support women entrepreneurs. Various organizations and nonprofits also offer financial support and programs for women entrepreneurs.

— Set up strong legal and financial foundations. Research the differences between LLCs, sole proprietorships, and corporations and choose what type of business structure makes that most sense for your business.

Also, separate your personal and professional finances and make sure you are complying with federal and local regulations.

— Network. Connect with other entrepreneurs, women, and mentors who can help in the entrepreneurship journey. Spread the word about your business by joining groups specific to your industry and getting involved with the local business community.

— Practice patience. Starting and running a business takes time and patience. By putting the right tools in place, you’ll be able to stay tenacious while establishing your business.