Millennials are starting their own businesses at a rate unseen by any other generation; they are the fastest growing segment of entrepreneurs today. Born between 1981-1997, millennials have surpassed Baby Boomers as the largest living generation on earth, and one area in which they have made a big impact is the workforce. From pursuing a more flexible work environment to seeking a challenge, millennial entrepreneurs all have their own reasons and motivations for starting a business instead of settling into a traditional career path.
At Wells Fargo, we understand the importance of getting to know this new generation of entrepreneurs so we can help them build their businesses and thrive. Here are four ways millennial entrepreneurs are growing, changing and reshaping the small business landscape.
Forging their own path
Many millennials were graduating high school or college during the financial crisis, and this experience helped form their plans for their future careers. This generation is the most diverse and most entrepreneurial, with millennials launching approximately 160,000 startups per month, according to a study by the Ewing Marion Kauffman Foundation. In fact, according to a recent Wells Fargo study of millennial small business owners, 82 percent of millennial small business owners say they started their business because they wanted to be their own boss and have control over the future, and today, 71 percent are working on their businesses full time. The study also found that 41 percent of millennial small business owners are looking not only for a comfortable future, but to grow their business as big as possible, compared to 21 percent of older small business owners. The vast majority of millennial business owners surveyed said they are planning to grow their businesses over many years with the goal of potentially even passing it down to their children.
Launching more businesses
Millennials today are starting more businesses in a wide variety of industries. The Wells Fargo study found that one in five millennial small business owners (19 percent) say they own more than one business, compared to 17 percent of older small business owners. When asked what business type/industry they work in, the top three reported were professional and business services (22 percent), retail, wholesale or restaurant (20 percent), and consumer services such as house painting or auto repair (16 percent). This is consistent among older small business owners who report professional and business services (38 percent), retail, wholesale or restaurant (14 percent) and consumer services (15 percent) as the top three business types/industry they work in.
When it comes to seeking support for their business’s financial success, millennial small business owners aren’t afraid to ask for help. According to the Wells Fargo study, millennial small business owners draw on a number of different sources for inspiration, with most turning to friends and family (82 percent), and other small business owners and competitors (74 percent). In addition, a large percentage of millennial small business owners (76 percent) say they are willing to pay for products and services that help them do a better job of running their businesses, compared to 66 percent of older small business owners.
The glass is half full
In thinking about the future of their businesses, millennial small business owners tend to have an optimistic outlook. In fact, the Wells Fargo study found that the outlook for the coming year is seen to be brighter among millennial small business owners, with 77 percent saying that they expect improvement in their business in the next year, compared to 51 percent of older small business owners. The positive, ambitious outlook supports their plans to grow and scale their business in line with their goals.
As more millennials enter the small business space and launch their ventures, understanding how they operate and what motivates them will be as important as ever. Working with small business owners is one of the most important things that we do, and we are excited to be part of the changing small business landscape and help more millennials grow and thrive.
Cary Yates is a market growth & development manager for Wells Fargo. He is based in Houston.