Study shows half of millennials are planning to start a business in the next three years
America's Small Business Development Centers (America's SBDC) has partnered with the Center for Generational Kinetics to better understand how different generations view and approach entrepreneurship. The study has reinforced previously held beliefs such as a strong entrepreneurial inclination among millennials, while challenging preconceived notions about their motivations for starting a business.
Small Businesses play a huge role in the lives of Americans. One third of Americans (34 percent), have worked in a small business in the past and nearly a quarter (24 percent) of both Millennials and Gen X own or have owned a small business.
Charles "Tee" Rowe, President of America's SBDC said, "We were excited to embark on this important study to better understand how Americans across different generations are drawn to entrepreneurship and could not be more excited about the survey's results."
"It is clear that the entrepreneurial spirit is not only alive and well in America, but that people are eager to find help to build their dream business. We at America's SBDCs could not be more ecstatic or well positioned to help them grow with our nearly 1,000 locations across the country filled with dedicated professionals."
Administered to 1,011 US adults ages 21-65, the study found that the entrepreneurial spirit is alive and well, with 41 percent of Americans saying they would quit their job and start a business in the next six months if they had the tools and resources they needed. This number is higher for millennials, with 59 percent stating that they would be willing to take the entrepreneurial leap in the next six months with the right tools and resources.
All generations surveyed lived through the great recession, yet seemingly this hasn't dampened entrepreneurial willingness for most. The study cites that 62 percent of Americans have a dream business in mind that they would love to start, and close to half (49 percent) of millennials, intend to start their own business in the next three years.
Reasons for millennials to start their own business?
Wealth creation was the number one rated catalyst to start a small business, according to the study. 47 percent of Americans listed the potential to make money as what would motivate those most to start their own business. The appeal of being your own boss is also a strong factor, with 40 percent of Americans listing it as their motivation, and 61 percent believe the best job security to be from running their own business. However, whilst there is a perception that millennials are, most interested in their work being fun, the survey reveals that 62 percent would rather have a business that makes a lot of money than a business that is a lot of fun.
Money was cited as the most limiting factor in entrepreneurship, with 55 percent of Americans rating access to money as the most difficult aspect of starting a business, with 45 percent stating access to capital is the biggest barrier to starting a business. When broken down by gender, women feel more challenged by this barrier, with 63 percent saying access to money is a barrier.
The lack of knowledge and small business savvy is another roadblock. Over half (61 percent), say they would be encouraged to start a small business if they knew where to go for help, with 51 percent stating they would want help with a business development plan. Even more striking, more than 13 million millennials cite not knowing where to go for help to start or run a business as the number one reason that keeps them from starting their own business. The study aims to raise awareness for millennials who have adapted an entrepreneurial mindset and wish to move forward with their ambitions.
New ways of working
Millennials have become the most adaptable with the entrance of social media, digital channels and services, which have enabled businesses to communicate and deliver services efficiently. Twitter has become the prime social media network for world leaders, governments and businesses, according to a recent study, with President Trump becoming an avid user of the social network, accumulating over 30,000,000 followers worldwide. Facebook is also used avidly used across the world, with the majority of governments and council members having platforms on the site.
The social media platforms have enabled businesses to gain a greater understanding to consumer demands, interact with customers and deliver more personalised services. Millennials have grown up viewing how technology has transformed traditional business models, such as Microsoft, who have had to compete against start-ups which have become multinational, such as Apple. With this in mind, it is easy to see how the millennial generation are keen to take on the challenge of becoming their own boss, influenced by young billionaires, such as Snapchat’s Evan Spiegel and Facebook’s Mark Zuckerberg. It will be interesting to see how millennials will continue to be influenced within the corporate world and rise to these challenges.