The Rise of Gen Z Small Business Owners
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By: Aries Payne
Although they’re known for their entrepreneurial spirit, a 2024 survey found that Millennials surprisingly only own 13% of small businesses. The majority are currently owned by Gen Xers (47%), followed by Boomers (40%). But where does this leave Gen Z?
As Gen Z enters the workforce, research is finding they have an extremely strong interest in pursuing entrepreneurship compared to previous generations. A 2023 Samsung and Morning Consult survey of U.S. students ages 16 to 25 revealed that 50% of respondents wished to start a business. Other studies, such as those by WP Engine and Square, confirm the majority of Gen Zers want to own a company in the future.
So, what factors are driving this generation to shift to entrepreneurial ventures?
A Difference in Values
According to Forbes, Gen Zers value independence, flexibility, and work-life balance and recognize they can achieve all three through entrepreneurship. Additionally, Gen Zers are driven by the desire to improve their communities and are attuned to social, environmental, and ethical concerns. This motivates them to launch businesses offering solutions that positively make a difference.
The Job Economy
Older generations traditionally believe a 9-to-5 offers more financial security. However, younger generations think that being your own boss provides better job security, especially in today's unpredictable economy. The 2024 Justworks and Harris Poll’s Small Business and Entrepreneurship Survey confirms this, revealing that 18 to 34-year-olds are most concerned about layoffs in the workplace.
As such, Gen Zers and young Millennials are becoming disillusioned by the 9-to-5 and climbing the corporate ladder. They believe their prospects are now better as business owners compared to working for someone else.
While Millennials use the gig economy to test the waters of entrepreneurship through “side hustles,” Gen Zers are a little more willing to take bigger risks—like completely replacing a full-time job with freelancing or content creation—especially with how much more accessible it has become.
The Creator Economy
The popularity of social media platforms, particularly TikTok, Instagram, and YouTube, has also led to the development of the “creator” economy, which includes individuals that “share and monetize their expertise on these platforms” (CNBC).
Gen Zers have been quick to learn that if you can gain a large enough following online, you can reap brand deals and monetary rewards and eventually have enough to become a business. So, it’s no surprise that we’re seeing more of an increase in influencers, streamers, and other content creators online than ever before.
What’s the Outlook for Gen Z Entrepreneurship?
Gen Z’s significant shift to business ownership shows that the entrepreneurial spirit isn’t going anywhere anytime soon. That said, Gen Z’s sense of innovation can only lead to the emergence of startups that not only challenge traditional business models but could also redefine what it means to be a successful entrepreneur.
It’s an exciting time for the business world, and we’re excited to be a part of it! If you’re an entrepreneur ready to thrive in this new era, contact one of our experienced business advisors for no-cost, one-on-one business consulting today.
