Entrepreneurs under the age of 30 are seeing more growth in their businesses than any other age group, according to the fifth annual DNA of an Entrepreneur report by Hiscox, a global specialist insurer serving the small-business community.
These small-business owners, members of Generation Y, were also most likely to report growth in their businesses over the past year (77 percent) and are optimistic about the year ahead (65 percent). In contrast, more than half (60 percent) of entrepreneurs age 60 and up reported negative revenue growth, or no revenue growth at all, over the past year and 40 percent weren't optimistic about the year ahead.
The differences seen in the study between the two age ranges are significant. But what’s behind them? Entrepreneurship is a difficult road fraught with emotional and financial challenges, so what’s in Gen Y’s blood that makes members of this generation more likely to succeed?
Bullishness Toward Innovation
Younger small-business owners are driving innovation in their respective fields, with 41 percent of those 30 or younger creating new products in the past year, compared with 20 percent or less of all respondents 30 years or older. We know that in the world of entrepreneurship, you have to be content to throw lots of ideas against the wall and expect only one or two to stick. This mindset is second nature to Gen Y-ers, who tend to be more agile and comfortable with change. Their small-business cultures reflect the fact that they are happy to abandon the status quo if it’s not working, and are always looking to discover the next big idea.
Freedom To Be Workaholics
Fifty-nine percent of Gen Y entrepreneurs cited increased stress levels in the recent past—the highest percentage of any age demographic—and 12 percent took no vacation days at all this year. But younger business owners can afford to be overly focused on work and its related complications because the other areas of their lives typically don’t take up as much mental real estate (e.g., most don’t yet have elderly parents or young children). Your average Gen Y place of business, for example, is likely to be empty at 9 a.m. but buzzing at 9 p.m. Contrary to popular belief, there’s no issue with the Gen Y work ethic when that person is passionate about his or her job.
Intense Desire For Autonomy
Hiscox reports that the most common benefits cited by entrepreneurs were flexibility over working hours (51 percent), being able to influence the direction of the business (45 percent), greater pride in work (43 percent), and a greater feeling of control (43 percent). More than any other generation, Gen Y has a low tolerance for corporate bureaucracy and detests the feeling of helplessness that often accompanies life in the traditional business world. Gen Y-ers like organizations with flatter hierarchies, and they will work harder, make greater sacrifices and generally do whatever it takes in order to succeed at their "own thing."
Willingness To Embrace Open Communication
Of course, younger small-business owners use social media in more ways than their older counterparts. For instance, 65 percent of small-business owners under 30 use social media to keep in touch with customers and for customer service purposes, versus only 36 percent of those 60 and older. Younger small-business owners also leverage social media for prospecting (53 percent) and internal communication (35 percent)—more than double any other age group. The Gen Y entrepreneurial culture is extremely transparent, leading to more frequent and meaningful dialogue with all stakeholders. This means that Gen Y knows about and takes steps to solve problems before they reach the critical stage.
What if you're not a Gen Y business owner? All is not doomed. You have experience on your side ... but look at your own business practices and see if you can better emulate the areas where Gen Y shines.
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