These days, anyone from age 22 to 37 is a card-carrying member of the millennial generation, and they’re changing the face of business ownership. As they take the helm of businesses across the country, millennials are applying their own approach to being the boss. According to the Capital One Small Business Growth Index, they are more optimistic, more likely to offer benefits to their employees, and are more focused on innovation than their older counterparts.
Here’s a look at how millennials are reshaping what it means to be a business owner.
Millennials are driving optimism, but are also the most cautious
While business optimism overall is down eight points compared to Fall 2018, millennials continue to be one of the most optimistic groups of business owners. Two-thirds (67%) of millennial business owners say current business conditions are good or excellent, compared to 68% of GenX, 55% of Baby Boomers, and 37% of mature business owners (age 74 or older).
Improved financials certainly have something to do with this optimism, as more millennials (52%) say their financial position had improved in the past year. Additionally, more millennials report increased sales during the past six months, compared to their older counterparts.
Martin Solorzano, the 30-year old founder and CEO of STAFFED, Inc. is one of them. He says his company is in a growth period right now and that Q1 2019 revenue is nearly 3x that of Q1 2018.
At the same time, many millennials entered the workforce during the peak of the recession — they have experienced tough economic conditions and might still be feeling the impact of underemployment, deferred student loan payments, or a delay in getting their savings started. For some, it may be the reason why they went into business on their own instead of joining another company.
It’s no wonder they are also more concerned that a potential recession could impact their business in the next 12 months.
Millennials are fueled by innovation
As digital natives, millennials have an advantage over business owners from older generations — they have an inherent knack for incorporating new technology into their business processes, and are used to the fast pace of change.
In fact, innovation is one thing drives optimism among millennial business owners. The Capital One Small Business Growth Index found that innovation drives more optimism among millennials (51%), compared to 28% of GenX, 31% of Baby Boomers, and 31% of mature business owners.
With that in mind, it’s not surprising that 100% of millennial business owners with $1 million to $10 million in revenue believe Artificial Intelligence and machine learning is already impacting or will impact their industry in the next five years.
Despite the importance of innovation, less than one-third of all millennial business owners feel pressure to change aspects of their business, like customer experience, based on industry innovation driven by large companies like Amazon.
Millennials are investing in differentiated benefits and perks
Hiring and retaining top talent is a challenge for businesses of all sizes, especially as more businesses look to hire. Millennials, in particular, are on the hunt for new employees, with 42% saying they have plans to hire in the next six months compared to 44% of GenX, 19% of Baby Boomers, and 13% of mature business owners.
When it comes to attracting talent, their approaches differ slightly. For example, millennial business owners are much more likely (66%) to offer more benefits, such as 401k, paid time off, and paid medical, than their older counterparts. In order to get ahead of the competition, millennials are also more likely to market their business as a great place to work.
Another stark contrast between millennials and older business owners is their approach to offering perks that build a strong workplace culture. Fifty-nine percent of millennial business owners say they are investing in differentiated modern office perks, such as games and food, to keep current and prospective employees happy. That’s compared to just 31% of GenX, 27% of Baby Boomers, and 24% of mature business owners who are doing the same.
Millennials are a different type of business owner, because millennials are a different type of worker. Many millennial SBOs do not have the same workplace expectations of a traditional 9-to-5 job, and they do not want that lifestyle for their employees, either.
While millennials might get a bad rap, they are bringing interesting new ideas to the table, and older business owners might even learn a thing or two from their younger peers.
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