PA Is Not a Great Place For Women to Own Businesses

In Pennsylvania, it’s not an understatement to say that women are less inclined to own small businesses.

The Keystone State ranks in the bottom five of states in its percentage of small business owners who are women. The statistic is shocking, particularly when Pennsylvania ranks among the top states for the five-year survival of new businesses, with over half of new firms still open after five years.

Pennsylvania’s economy is big, rivaling entire countries in economic output. Moreover, small businesses are a cornerstone here: over 176,000 firms employing 1.4 million workers anchor main streets and fuel local wages to the tune of more than $56 billion annually. For perspective, one out of every 100 workers in the entire United States earns a living at a Pennsylvania small business.

Yet for Pennsylvania’s female entrepreneurs, the story is markedly different. Pennsylvania lags substantially in women-owned businesses. In fact, the Commonwealth ranks 45th in the nation on the share of small businesses that are owned or co-owned by women, with just 32% of firms in that category.

Put differently: while women make up about half the workforce and roughly 47% of workers statewide, they account for far fewer than half of the small business owners.

A competitive business climate is only meaningful if it’s inclusive. If one segment of the population consistently trails in ownership, the state’s overall economic health is diminished.

Pennsylvania’s high survival rate for new businesses should be celebrated, but the rate of new business formation for women is lower here than in many other states. Pennsylvania ranks down the list in the number of startups per capita, and this includes firms launched by women entrepreneurs.

Economies where women own more businesses tend to see broader community engagement, stronger workforce participation, and greater innovation across sectors. When ownership is concentrated disproportionately in the hands of men, those benefits are muted.

Washington, Alaska, Idaho, and Montana top the list while New York, Rhode Island, Massachusetts and Maine round out the bottom. The perennial laggards of Mississippi, Alabama and Arkansas all beat Pennsylvania when it comes to women-owned business. 

Bringing Pennsylvania closer to the national average, not merely in aggregate small business numbers, but specifically in women-owned enterprises, would require tens of thousands of new women-owned firms.

To match the share of the Commonwealth’s working population who are women, Pennsylvania would need to create 75,000 new women-owned businesses. Of further concern is that Pennsylvania operates twice as many programs dedicated to supporting small businesses and start-up companies as the national average. These entities may have cracked the code of helping new companies survive but have more work to do to promote equitable business ownership.   

The top impediment cited by women to business ownership is access to capital, with women-owned firms being disproportionately more likely than men-owned firms to be denied financing when they apply.  Women-owned businesses are considered riskier to lenders. 

Nationally, two-thirds of all women-owned business have fewer than four employees.  Just over half of them earn between $100,000-$1,000,000, which is slightly more than men-owned businesses.  Over a third of women-owned businesses, the plurality, are less than two years old.  In addition, women-owned businesses significantly over-index in the healthcare and education industries.

Policymakers should start with these facts to ask the right questions to improve the rate of women-owned businesses in the Commonwealth.

How can the Commonwealth improve access to credit?  Why are women-owned businesses deemed to be riskier?  What can be done to mitigate risk?  What barriers can the state remove for companies of 1-4 employees to thrive?

That means moving beyond ribbon-cutting programs and toward measurable outcomes: faster lending decisions, smaller-dollar capital products, simplified licensing, and technical assistance designed for businesses with fewer than five employees.

If Pennsylvania can engineer survival, it should also be able to engineer access, especially for entrepreneurs willing to take the first risk.

The data is clear: Pennsylvania’s economy is large, resilient, and capable, but it falls short in delivering equitable ownership opportunities to women.

Closing that gap won’t just benefit women; it will grow the economy, strengthen communities, and honor the Commonwealth’s promise of opportunity for every hardworking Pennsylvanian.