Why Are Millennials & Gen Z More Likely to Start a Business?

Statistics from the US Census Bureau revealed a record-breaking 5,481,437 new businesses were started in 2023. This entrepreneurial growth data clearly shows Americans are hungry to start their own small companies. It turns out that Millennials and Gen Z adults are more likely to start their own businesses.

How do you know if you are Millennial or Gen Z?

If you are considered a Millennial, you were born between 1981 and 1996. Were you born from 1997 to 2010? Then, you are part of Gen Z. We all know that specific and significant major world events shape people's outlook and characteristics. This includes how we all approach our careers and future earnings.

Changing the business landscape, these tech-savvy generations, with their innovative mindset, purpose-driven outlook, and digital fluency, say they are ready to tackle their careers by starting their own companies. Both Millenials and the Gen Z generation have been found to search for personal career fulfillment through entrepreneurship.  

Quite simply, these groups appear to be the future of business.

Millennials and Gen Z Interested in Becoming Entrepreneurs

Justworks recently partnered with The Harris Poll on a Small Business & Entrepreneurship Survey, the insights revealed that over 1,000 full-time or part-time respondents confirmed Millenials and Gen Z individuals have a strong interest in starting their own businesses. In fact, the numbers showed that an overwhelming 71% are somewhat/very interested in exploring entrepreneurship. 

• The reasons for this high level of attention in startups by these young adults are many: 

• The demographic of 18 to 34-year-olds are the ages that are most worried about getting laid off, so it is no wonder they want to be their own boss and have control

• These groups of individuals are becoming increasingly disillusioned with the traditional workforce and believe their options in companies, large and small, are limited

• There is a desire for more flexibility in their daily life

• Millennials and Gen Zs strive to discover opportunities to make a difference in the world

For many, becoming an entrepreneur is viewed as the most accessible career path for achieving all of these things..and more!

Attributes That Encourage the Leap to Entrepreneurship

According to data, Millennials and GenZ are the most optimistic generation when it comes to starting a company. And they just may be best positioned to develop a small business:

1. Considered to be "digital natives," technology has always been a natural part of their daily lives; these strong-minded individuals are no strangers to the power of the internet

2. Both Gen Zers and Millennials are highly motivated to address problems that surround them and feel a responsibility to initiate social change

3. Company culture is a priority for these young minds, and there has been a rise in incorporating work-life balance and a focus on creating a work environment where they can thrive

4. The generational "Side-Hustle Mentality" demonstrates that many Gen Zers and Millennials actually work very hard while going to school or holding full-time jobs along with a side hustle to achieve their goals

5. And finally, they are driven to entrepreneurship by a healthy dose of impatience and don't want to wait to climb the corporate ladder

However, there are always obstacles (real or perceived) to entrepreneurship. 

Obstacles to Starting A New Business

While young entrepreneurs bring eagerness, fresh perspectives, and the objective to solve problems with innovative ideas, they often face unique challenges. 

The Harris Poll Survey found that the most significant barriers for Millennials and Gen Z are:

• The belief they don't have enough money (39%) 

• Concern they do not possess enough business  knowledge (29%) 

• Complicated, constantly changing tax codes in their state (41%) 

• Confusion of managing payroll, especially when hiring remote and freelance workers

Given their natural talents and preferences, the outlook for Millennial and Gen Z-owned small businesses is promising, but only with the support to move forward.

The Biggest Barriers to Entrepreneurship 

The truth is that nearly 25% of adults say that the administrative aspects of running a business hold them back from venturing out on their own. This includes back office responsibilities, such as human resources, payroll, benefits, and training. 

In other words, it can be tough to build something from scratch. That's why many savvy startups use a Professional Employer Organization (PEO) to manage payroll and help new companies comply with employment regulations. 

Justworks Delivers the Support New Businesses Need

We know you're excited about starting your business, and we are excited for you! We also understand this is a monumental step to take. Justworks can help streamline your business, from compliance support and payroll to HR tools and access to benefits. 

At Justworks, we have the resources you want and need. If you’re ready to learn more about how Justworks can help you set your business on the road to success, support your people, and grow your organization, we’re here to help you get started today.