The still-recovering economy has made it difficult for many small business owners to gain a firm foothold in their local markets, and this may be particularly true of younger entrepreneurs who want to start their own companies. However, many within Generation Y now say they're concentrating more on making these enterprises successful going forward.
While a smaller number of millennial owners say that they're launching small businesses immediately after graduating college, about one in six still do so, according to the latest data from the American Express OPEN Ages Survey. That's down from more than a quarter in 2007, before the serious onset of the recession, but those who have remained during that time seem to have emerged from the downturn more battle-tested and determined to make their companies successful than they were before.
"Resilience is a trait shared by both generations of entrepreneurs," said Susan Sobbott, president American Express OPEN. "Younger business owners channeled their passion through innovative thinking and thrived in the face of adversity while older entrepreneurs relied on experience to weather the storm and find a better life balance."
In all about four out of five small business owners from both the millennial and baby boomer generations say that navigating their companies through the trials and tribulations brought on by the economic downturn have made them better at what they do, the report said. About the same proportion also say that they've become better at managing their companies' finances. In addition, half of those in Generation Y and 40 percent of boomers also say that they're now more creative in how they market their products or services. Interestingly, though, companies run by the younger group say that they've experienced a 24 percent uptick in revenues over the last three years, compared with just 10 percent for their older counterparts.
Is passion fueling success?
Interestingly, 28 percent each of those in Generation Y who said their main motivations for starting their own companies were to be their own boss or make money may not be doing as well as the 26 percent of those polled who said they did so because they wanted to do something for which they had some passion, the report said. These companies saw 37 percent revenue growth in the last three years, compared with the lower numbers for both their millennial counterparts, and nearly four times that enjoyed by boomers.
Part of this may be the result of a heavier social media presence, the report said. Nearly nine out of 10 passionate millennials had some sort of social media accounts set up for their companies, compared with less than four in five for their whole generation, and three in five for boomers. They also tended to be more generous with rewards programs or discounts for those that offered repeat business, with 65 percent doing so, compared with 56 percent of all millennial-owned small businesses and less than one-third of those run by boomers.
Further, 81 percent of millennials also said they liked to use technology to promote their businesses, compared with just 61 percent of boomers, the report said. This includes having social media profiles on popular sites (51 percent for younger owners, 30 percent for older ones), selling products online (33 and 23 percent, respectively), and running a company blog (23 and 6 percent).
Independent owners of any age who want to be more successful may also want to consider the ways in which they pay for small business insurance policies. In many cases, they may be able to find more affordable coverage for workers' compensation or liability insurance by doing a little bit of shopping around.