Members of the millennial generation – those born between the 1980s and the year 2000 – aren’t just a growing force in the workplace. Many are keen to be bosses themselves and some are already running their own businesses. One study into millennials, the Cassandra Report, suggests as many as seven out of ten want to create their own jobs rather than being hired by someone else. One in five millennials plans to start a business in the next 12 months, Mintel has found.
It should come as no surprise. Entrepreneurship has become a more accepted career path. Youth unemployment has encouraged youngsters to look for other ways to find work. But the typical characteristics of this group also read like those of the archetypal independent business owner – confident, self-reliant, goal-oriented and success-driven. Yet, while these qualities may be the traits of a small business boss, this tribe of entrepreneurs are doing things very much in their own way.
In touch with technology
Millennials are also known as digital natives – they’ve never known a world without the internet, smartphones and social media. The recent UK Business Digital Index by Lloyds Bank found three out of ten UK SMEs still lack basic digital skills, with smaller employers’ hesitance to hire young employees identified as a barrier to embracing technology.
Of course, firms run by millennials have an understanding of innovation and digital progress woven into their DNA. The tech that fuels younger people’s private lives – social media, instant messaging, video-on-demand, blogs and wikis – are all things they expect to use in a work capacity, data from accountant PwC indicates.
- More than 80 per cent of the millennial generation believes technology makes it easier to become your own boss, according to the Millennial Majority Workforce study.
And so it’s proving. SMEs run by younger bosses are increasingly operating without the expense or hassle of physical premises, using quick, virtual forms of communication rather than face-to-face meetings – which take time and money to host and to travel to and from – and exploiting all of the latest technology and digital developments to market to a wider customer base, potentially all over the world. As a result, younger SME owners are more likely to trade internationally than those over 45, YouGov research has found.
Attraction to alternative finance
With their love of innovation and receptive attitude towards tech, it’s unsurprising young entrepreneurs are more inclined to use alternative finance.
- About 14 per cent of millennial business owners have already used non-traditional business lenders, according to recent Bank of America research, saying they’re attracted by the speed of access to money and the simplified qualification for borrowing, such as not having to secure loans against assets.
- Millennials are dissatisfied with the mainstream banks – 53 per cent think their bank doesn’t offer anything different to the other banks, the Millennium Disruption Index
- Almost half of the younger generation expects tech start-ups to revolutionise the banking industry, the index showed, with 68 per cent believing we’ll all access money in a totally different way in five years’ time.
This is an age group less interested in ownership – of cars, houses, even clothes and household gadgets – than sharing, bartering and trading. The success of firms such as home rental service Airbnb and car rental company Zipcar are reflections of this. The inclination towards sharing appears to extend to their attitudes towards money. Why wouldn’t they turn to a peer-to-peer platform for enterprise funding provided by other regular individuals rather than go through the old-fashioned bureaucracy of a bank loan application?
With young business owners doing more research for financial products online, less willing to take advice from conventional sources of financial information and more prepared to look at innovative alternatives, they’re already driving a seismic change in the way business funding is provided.
Working towards a work-life balance
While this age group is ambitious and keen to be autonomous, it also appears to value private time and recreation. And this is a big attraction of self-employment – the chance to balance work commitments with other priorities. The Millennial Majority Workforce findings show 79 per cent say they would work for themselves in future, with reasons including:
- Flexible working times. Two-thirds deem this important.
- About 56 per cent want flexibility around where they work, while 53 per cent want to be able to choose what they spend their time doing.
- Being their own boss and having control over their destiny is the priority for 44 per cent of millennials.
But it’s not just a selfish motivation, driven by a desire to have things all their own way – millennial bosses also want the best for their employees:
- More than a third would prioritise their staff’s well-being, a recent global study of millennials by accountancy giant Deloitte found.
- Younger leaders think business should be as much about having a greater sense of purpose and an awareness of employees as members of society, as the pursuit of profit.
Encouraging transparency and trust
If you worry you’re addicted to your smartphone, then move over and make way for the millennials. The younger population checks its handset 43 times a day on average, web analytics firm SDL has found. Sharing information via social media and other online platforms is hardwired into this generation and some experts anticipate this no-holds-barred attitude towards privacy may well extend to millennial business leaders’ professional practices – in a positive sense.
Having grown up against a backdrop of an economic recession, accounting scandals and corporates being discredited, greater transparency in their business dealings is something they believe is important to create companies with integrity and a strong degree of consumer trust. Millennials look for certain qualities in the brands with which they engage, a marketing study by Moonsylvania shows:
- Four out of ten want a business to demonstrate social responsibility.
- About 30 per cent expect a company to say important things.
And these higher expectations about the role of business doesn’t just extend to their experience as consumers. Young business owners say they and their enterprises should lead by example. While millennials know businesses should generate profit, they also highly rate ‘job creation’ and ‘improving society’, the Deloitte study shows.
All in all, this enterprising young cohort of business owners and would-be entrepreneurs seem determined to change the face of Britain’s SME community to make it digitally savvy, more flexible, with greater accountability and a better range of funding available. If these millennial entrepreneurs can turn those aims into reality, the future for British business looks genuinely bright.