For women entrepreneurs, launching businesses in large metropolitan areas isn't always the best strategy, new research finds.
Businesses owned by women in smaller metro areas have much higher average revenue than women-owned businesses in larger cities, according to a study from NerdWallet.
Overall, the average annual revenue for businesses owned by women in smaller areas is between three and four times higher than the $149,483 average for all women-owned businesses.
For the study, researchers analyzed 289 U.S. cities to determine where women business owners can have the most success. NerdWallet based its rankings on eight metrics, including the percentage of businesses owned by women, the businesses' revenue and the percentage of those businesses with paid employees. In addition, the researchers considered the number of businesses per 100 people and the percentage of women with a bachelor's degree or higher in each city.
Researchers also evaluated the median income for women and the unemployment rate of each area.
Based on the rankings, the 10 best places for women-owned businesses are:
- Santa Fe, New Mexico: The city tops the list for its high percentage of women-owned businesses, 34 percent, and its affordable cost of living.
- Boulder, Colorado: Boulder offers a high quality of life for entrepreneurs. Its economy is strong, and its 3 percent unemployment rate is the lowest in the top 20 in this list.
- Monroe, Michigan:The average business owned by a woman in Monroe brings in $601,565 in annual revenue, more than four times the average of all the communities analyzed.
- Racine, Wisconsin: The average business owned by a woman in Racine produces $586,241 in revenue a year, significantly more than most of the 289 cities examined. Additionally, businesses in Racine benefit from a low cost of living.
- Ocean City, New Jersey:More than 25 percent of women-owned businesses in Ocean City have paid employees, more than any place in the top 20 in this list.
- Napa, California: Napa thrives because of its booming tourist trade linked to the wine industry. The city's economy also has sizable and growing manufacturing and trade sectors.
- Washington, D.C.; Arlington-Alexandria, Virginia; and Maryland, West Virginia: Women in this area earn about $56,494 a year, the highest median income in the top 10.
- Barnstable Town, Massachusetts: Barnstable has a robust commercial environment, with about 15 businesses for every 100 people.
- San Francisco-Oakland-Hayward, California:The San Francisco Bay Area is home to some of the most prominent technology companies in the world. The region attracts companies developing software, mobile applications, information technology, biotechnology and environmental technology.
- Lancaster, Pennsylvania: The average business owned by a woman in Lancaster brings in $597,554 in revenue each year, significantly more than most cities on the list.
The state with the best representation is California, with four metro areas — Napa, San Francisco, San Jose, Oakland, Sunnyvale, Santa Clara, Hayward, Santa Cruz and Watsonville — in the top 20. These places have a high percentage of women-owned businesses, a high median income for women and a relatively large population of women with at least a bachelor's degree
To view the complete list and where each city ranks on each of the metrics analyzed, visit NerdWallet's blog.