Why Millennials and Gen Z Are More Likely to Start Their Own Business

Data from the U.S. Census Bureau shows that a record-breaking 5,481,437 new businesses were created in 2023, highlighting a strong desire among Americans to start their own small companies. Millennials and Gen Z are leading this trend, proving to be more likely than previous generations to venture into entrepreneurship.

Are You a Millennial or Gen Z?

Millennials were born between 1981 and 1996, while those born from 1997 to 2010 are part of Gen Z. Major world events and cultural shifts uniquely shape each generation’s outlook, including how they approach careers and income opportunities.

Known for their tech-savvy, purpose-driven mindset, and digital fluency, Millennials and Gen Z are approaching their careers with a focus on personal fulfillment, often through entrepreneurship. These generations are driving change in the business landscape by seeking careers where they can make an impact and find meaning.

Growing Interest in Entrepreneurship

A recent Small Business & Entrepreneurship Survey, conducted by Justworks and The Harris Poll, showed strong interest in entrepreneurship among Millennials and Gen Z. Over 1,000 full-time or part-time workers participated, with 71% of respondents expressing a strong interest in starting their own business.

Some of the reasons behind this interest include:

– Young adults (18 to 34) are especially concerned about job security and want to gain
  control over their careers.

– Many are increasingly disillusioned with traditional employment and feel limited in larger
  corporate settings.

– These generations desire more flexibility in their daily routines.

– They are passionate about finding ways to make a positive difference in the world.

For many Millennials and Gen Z, entrepreneurship is seen as the most achievable path toward these goals—and more.

Characteristics Driving the Entrepreneurial Spirit

Millennials and Gen Z are among the most optimistic generations when it comes to starting a business. They may also be well-positioned to succeed, given their unique characteristics:

1. As “digital natives,” they have grown up with technology, making the internet a natural part of their lives.

2. They are highly motivated to address societal issues and feel a responsibility to initiate positive change.

3. Company culture is a priority, with an emphasis on work-life balance and environments where they can thrive.

4. Many Millennials and Gen Zers have adopted a “side-hustle mentality,” balancing school or full-time jobs with additional projects to reach their goals.

5. They are eager to advance quickly and are not inclined to wait years to climb the corporate ladder.

Challenges in Starting a Business

Despite their enthusiasm, young entrepreneurs often face significant obstacles. The Harris Poll Survey identified key challenges for Millennials and Gen Z, including:

– Lack of funding (39%)

– Limited business knowledge (29%)

– Complex and changing tax regulations (41%)

– Difficulty managing payroll, especially with remote and freelance workers

Although these challenges exist, the outlook for Millennial and Gen Z entrepreneurs remains promising with the right support.

Overcoming Barriers to Entrepreneurship

For nearly 25% of adults, the administrative demands of running a business—like human resources, payroll, and compliance with regulations—are a deterrent. Many new businesses rely on Professional Employer Organizations (PEOs) to handle payroll and help ensure compliance, simplifying the administrative side of entrepreneurship.

In short, while starting a business is not without challenges, Millennials and Gen Z are well-equipped to overcome them and shape the future of business.

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