How Gen Z is Redefining Careers and Thriving as Entrepreneurs?
The information in this article comes from the “Small Business State of Mind” report, an internal study by Microsoft Corporation, conducted by Wakefield Research in April 2022.
In 2021, Americans submitted over 5.4 million applications to start new businesses. With a surge in small businesses, Gen Z is standing out by choosing unique career paths. They’re redefining work and success, leveraging social media, valuing self-expression, and prioritizing social consciousness. With 62% of Gen Z either starting or planning to start their own business, they’re on track to become the most entrepreneurial generation.
So, what does the small business landscape look like today, and how is Gen Z influencing it? Microsoft Store’s “Small Business State of Mind” report, which surveyed 1,000 small business owners with 0-24 employees, delves into today’s entrepreneurial mindset, work motivations, lifestyles, and future visions.
Key Findings:
Here are five trends in small business shaping entrepreneurship:
1. 9-to-never: Gen Z small business owners are redefining the traditional work hours.
2. The do-good effect: Small business owners focusing on social good are reaping the benefits.
3. Risky business: Many small businesses are neglecting data breach prevention.
4. Road to retirement: Gen Z sees small business ownership as a path to early retirement.
5. TikTok over textbooks: Gen Z small business owners are turning to TikTok for business advice, questioning the need for a college degree.
Gen Z’s approach to work differs from the millennial hustle. While millennials often work long hours at a desk, 91% of Gen Z small business owners work outside the typical 9-to-5 hours, and 81% work while on vacation, compared to 62% of small business owners overall. Nearly half of Gen Z (48%) and non-Hispanic Black small business owners (49%) have multiple side hustles, compared to 34% overall. Additionally, 64% of Gen Z and 58% of Black, Indigenous, and People of Color (BIPOC) small business owners manage at least half of their business on their phones, compared to 48% overall.
Gen Z is driven by purpose. Half of Gen Z small business owners prioritize social good in their top three business goals, compared to 39% of small business owners overall.
“At Microsoft Store, we recognize the importance of technology in supporting a flexible and mobile work lifestyle,” says Travis Walter, vice president of Microsoft Store. “It allows small business owners to manage their business anytime, anywhere, reach customers effectively, and focus on what truly matters to them.”
Amid a global pandemic and significant societal changes, Microsoft Store found that Gen Z small business owners are adopting non-traditional priorities, particularly social good. This “do-good effect” has positively impacted their businesses.
Half of Gen Z small business owners prioritize social good, compared to financial stability and business growth, which are top priorities for 88% and 77% of small business owners overall. Among Gen Z, these figures drop to 73% and 65%, respectively. Moreover, 82% of Gen Z small business owners say that focusing on social good has helped their business grow, and 52% report a positive impact on their mental health.
The pandemic pushed many small business owners to adapt and invest in technology, but nearly half (47%) have not invested in data security, risking potential breaches.
“This highlights the need to invest in the right technology and security measures,” says Walter. “Proper data security is crucial, given the high rate of password attacks—921 per second.”
Small business owners can access free cybersecurity training and resources at Microsoft Store’s Small Business Resource Center.
For Gen Z, small business ownership also offers a path to early retirement. Sixty-one percent believe entrepreneurship will allow them to retire earlier than a corporate career, compared to 40% of all small business owners.
Gen Z is entering the workforce at a time of significant change, following pandemic-driven online schooling. Unlike previous generations, 78% of Gen Z small business owners believe a college degree is not essential for running a business. Instead, they turn to TikTok for business advice.
TikTok is emerging as a key resource for young entrepreneurs, with 65% of Gen Z small business owners using it for business insights, compared to 33% of small business owners overall. Those who use TikTok are more likely to have multiple side hustles.
What’s Next for Small Businesses?
“It’s your local coffee shop, florist, and barbershop that drive our economy,” says Walter. “Small businesses with fewer than 20 employees make up 89% of all U.S. businesses. Supporting them is crucial, especially as they face many challenges today.”
Inflation (51%), COVID concerns (21%), and supply chain shortages (18%) are the top threats to small businesses. Despite these challenges, 59% of small business owners are optimistic about growth in the next 12 months, including 55% of Gen Z and 67% of BIPOC owners. Additionally, 86% prefer to keep their small business over returning to a corporate job.
The state of small business will continue to evolve, with Gen Z’s entrepreneurial spirit driving its future. This is just the beginning.
Small business owners are invited to visit Microsoft Store’s Small Business Resource Center for free access to training, tools, products, and solutions to help them connect with teams, reach new customers, safeguard their businesses, and grow.
