People from every generation look at the next with a mix of skepticism, criticism, admiration, and confusion. This is a natural reaction and not surprising.
The experiences that shape each generation are influential and distinct, affecting their attitudes and behaviors. These generational expectations and approaches are evident in work and career choices. For example, Baby Boomers value financial rewards, prestigious job titles, and perks like fancy offices and reserved parking. They are also loyal to their employers, often seeing lifetime employment with one company as an admirable goal.
Millennials, born between 1981 and 1996, have different attitudes and expectations about work. Loyalty to one employer is rare. A Gallup survey found that one in five Millennials changed jobs in the past year, and six in ten are open to new opportunities. About three in ten Millennials feel “emotionally and behaviorally” connected to their jobs. Therefore, building a small business as a Boomer is quite different from doing so as a Millennial.
The Rise of Gen Z Entrepreneurs
Gen Z, born between 1996 and 2012, shares some experiences and attitudes with Millennials but also has unique perspectives. A significant difference is Gen Z’s aversion to long-term careers with large companies. They are more self-reliant and look to themselves as their primary source of income and job satisfaction.
About 62 percent of Gen Zers have started or plan to start their own businesses. They are drawn to entrepreneurship for various reasons, including witnessing the risks of traditional career paths firsthand.
The oldest Gen Zers were around 12 during the Great Recession from December 2007 to June 2009 when about 20 percent of employees lost their jobs. The recession’s effects were significant, with many people unable to find new jobs with similar salaries and benefits. Watching parents and siblings struggle influenced Gen Z’s view of traditional employment.
Even those who weren’t born during the Great Recession received powerful reminders of self-reliance when the coronavirus pandemic caused job market contractions and global lockdowns. Many Gen Zers questioned the wisdom of traditional career paths, leading to the Great Resignation, where they reconsidered their desired work-life.
Technology and Entrepreneurship
Global events like COVID-19 aren’t the only reasons many Gen Zers see entrepreneurship as an attractive career. It has also become easier to start a business. A Gallup study found that the average business startup required less than $10,000, with nearly three-quarters of new companies starting without outside funding.
This low financial barrier explains why many Gen Zers started “side hustles” during the pandemic. Affordable platforms and technologies make it easier for them to create, market, and grow their businesses.
For instance, digital entrepreneurs once needed significant funds for servers, web design, and other services to launch a website with e-commerce functionality. Today, there are many low-cost or free digital tools. Gen Zers can market their products and services on YouTube, Instagram, TikTok, and other platforms, using low-cost e-commerce platforms and payment apps to handle orders and transactions.
For older generations, the abundance of technologies available to start and grow a business can be overwhelming. However, Gen Zers, who spend an average of 11 hours on their mobile devices and stream videos for 23 hours each week, are comfortable using digital technologies to promote and build their businesses.
Essential Skills for Successful Entrepreneurship
Gen Z entrepreneurs have many advantages: they are eager to forge their own paths, view small business creation as a way to build wealth, and possess the technological skills to start a business with little funding. However, launching a successful small business requires a wide range of skills. Here are some tips for Gen Z business owners to develop the critical skills needed to turn their business dreams into reality:
1. Seek Out a Mentor
Confidence is essential for successful entrepreneurs, but so is recognizing the value of mentorship. Many Gen Z entrepreneurs understand the importance of working with a more experienced mentor. Over 60 percent of Gen Z entrepreneurs seek mentorship on scaling their companies and navigating financial and legal aspects of small business ownership.
Entrepreneurs can find mentors through school professors, advisors, or networks like SCORE, which offers free mentorship from retired executives. Gen Zers are also pursuing mentorship online, through platforms like Reddit or MasterClasses. Reverse mentoring, where younger people offer insights about technology to older individuals, can be beneficial as well.
2. Develop Strong Finance Skills
Financial literacy is crucial for any small business. Entrepreneurs need to understand balance sheets, ROI calculations, and other financial metrics. Building a strong relationship with a banking partner can help young entrepreneurs improve their financial understanding and secure necessary financing.
3. Improve Communication Skills
Every entrepreneur is a salesperson, regardless of their industry. Gen Z entrepreneurs must learn to adapt their communication styles to different generations and contexts. While they may prefer digital communication, understanding and accommodating others’ preferences is key to building successful relationships with customers, employees, and investors.
4. Cultivate Management Skills for a Positive Company Culture
Company culture is important to Gen Z, who value equality, sustainability, and other social causes. As leaders, Gen Z entrepreneurs need to model the traits they value and create a positive work environment. Effective management involves understanding the preferences and emotions of their team, often favoring a democratic leadership style over traditional command and control approaches.
5. Master Time Management
Time is a crucial resource for entrepreneurs. Effective time management involves scheduling each day, strategic planning, delegation, and using technology tools to save time and enhance productivity. Developing these skills helps entrepreneurs focus on their company’s most important tasks.
Embracing the Entrepreneurial Journey
Gen Z has the potential to become known as the entrepreneurial generation. They see starting a business as a path to achieving career and personal goals, and they have advantages that previous generations lacked, such as digital skills and affordable tools for starting and growing a business.
However, the challenge of creating a lasting business remains significant, with only about 30 percent of small businesses surviving for a decade. By leveraging their advantages and committing to developing essential skills, Gen Z entrepreneurs can increase their chances of success and build companies that last for generations.