A total of 7.7 percent of female workers nationwide own their own business, according to data from the U.S. Census Bureau.
For many of these women, entrepreneurship offers more flexibility than traditional jobs, which is appealing. But starting a business is also risky. New business owners often take a pay cut, as it can take years for new businesses to turn a profit. The median annual income for full-time female entrepreneurs is $40,000, slightly lower than the median annual income among all full-time female workers of $43,000.
While full-time female entrepreneurs—defined here as self-employed workers in their own incorporated or unincorporated businesses—earn about the same as full-time female employees at private companies, they earn less than those working for nonprofits, state and local government, and the federal government.
Compared to men, women earn less across all worker classes. However, the gender wage gap among full-time entrepreneurs—a full $15,000 per year difference—is the largest. Research by the JPMorgan Chase Institute shows that female-owned small businesses tend to be smaller and generate less revenue than male-owned small businesses. One reason is that women-owned startups are underrepresented among firms that receive external financing, according to the JP Morgan Chase report.
Just as female entrepreneurs tend to have lower incomes than male entrepreneurs, female entrepreneurs fare better or worse in certain industries. Self-employed women working in accommodations, food services, finance, insurance, and real estate enjoy the highest income premiums—defined as the percentage difference in the median income of full-time female entrepreneurs and all full-time female workers. Conversely, female entrepreneurs in management, utilities, and information take the largest pay cut compared to the average female worker.
While the median income for full-time female entrepreneurs at the national level is $40,000, the median income for full-time female entrepreneurs varies widely across cities and states. To find the locations with the most successful female entrepreneurs, researchers at Volusion used data from the U.S. Census and Bureau of Economic Analysis to calculate a comparable metric of purchasing power across locations. The researchers adjusted median incomes for full-time female entrepreneurs up or down based on each location’s relative cost of living.
In highly expensive locations, like San Francisco, cost-of-living adjusted incomes are lower than actuals; whereas, in more affordable locations, such as Cincinnati, cost-of-living adjusted incomes are higher than actuals. All locations were ranked based on the cost-of-living adjusted income for female entrepreneurs.
The analysis found that in Ohio, full-time female entrepreneurs earn an adjusted median income of $41,620. Here is a summary of the data for Ohio:
- Median income for full-time female entrepreneurs (adjusted): $41,620
- Median income for full-time female entrepreneurs (actual): $37,000
- Median income for all full-time female workers (actual): $40,900
- Percentage of female workers that are entrepreneurs: 5.4%
For reference, here are the statistics for the entire United States:
- Median income for full-time female entrepreneurs (adjusted): N/A
- Median income for full-time female entrepreneurs (actual): $40,000
- Median income for all full-time female workers (actual): $43,000
- Percentage of female workers that are entrepreneurs: 7.7%
For more information, a detailed methodology, and complete results for all metros and states, you can find the original report on Volusion’s website: https://www.volusion.com/blog/cities-with-the-most-successful-female-entrepreneurs/