For the first time, Millennials now officially outnumber baby boomers in the U.S. But while changing demographics have real implications for American society, the rise of the Millennials may be having one of the most profound effects on the U.S. small business community.
Although definitions vary, Millennials are generally described as individuals born between the early 1980s and the early 2000s. Some Millennials are still in their teens or early twenties; others are already in their late twenties and thirties.
In next week's column, I'll offer business buying tips for twenty- and thirty-something Millennials who already have industry experience under their belts. But this week, the focus is on aspiring Millennial business owners who are currently in their teens and early twenties--young people who are just starting to chart a path toward a career as a small business owner.
Millennials and Small Business Ownership
The prevailing narrative is that the Millennial generation is highly entrepreneurial. But there's evidence to suggest that Millennials are actually struggling to find a foothold in the world of small business ownership.
A 2015 study by The Wall Street Journal showed that just 3.6 percent of households headed by individuals under the age of 30 own interests in private companies--a 24-year low.
Although the last recession may have dashed the dreams of some individuals in this age group, the WSJ study suggests that Millennials are having difficulty securing the skills and experience they need to start or acquire businesses.
Here's another statistic that might surprise you: According to Experian research, only 16.3 percent of Millennial business owners have bachelor's degrees and 15 percent don't even have a high school diploma.
Many Millennials simply don't realize that outside of business services, maintenance, beauty salons and other service industries, the odds of small business success plummet dramatically for aspiring owners and buyers who opt out of college and high school.
The takeaway? For young Millennials who aspire to someday own small businesses, it's never too early to begin to prepare for a career as a business owner. The educational and extracurricular decisions you make now will inevitably impact your success as a small business owner later.
Business Buying Advice for Young Millennials
Many young Millennials are so eager to become business owners that they start or acquire businesses before they are prepared for the rigors that are associated with owning and operating a successful business venture.
Small business ownership can be challenging and stressful, even for experienced business leaders. That's why it's important to increase the likelihood of success by laying the groundwork in high school and college.
If you're a young Millennial with hopes of one day buying a business, here are few things you can do now to prepare for small business ownership:
Pursue a mix of industry and business coursework.
One of the classic mistakes would-be business owners make is to focus their educational pursuits on either industry coursework or business classes--but not both. For example, aspiring accounting firm owners often focus exclusively on accounting courses and just assume they can learn business ownership skills once they're in the driver's seat of their own company.
Here's the problem: Even within the financial industry, business ownership requires a unique set of skills. Although it's critical to learn about your industry, it's just as important to take business classes that will prepare you for the realities of business ownership.
Participate in business-themed extracurricular activities.
In addition to formal coursework, you should seek out and participate in extracurricular activities that offer exposure to your industry, business leaders and the real-world issues that are important to small businesses.
Many high schools and universities have entrepreneurship clubs that provide access to resources, business networks and successful small business leaders. Likewise, professional associations and industry organizations often have resources and student chapters that can be useful for forging industry connections.
It's never too early to gain industry experience.
If you know the industry in which you hope to someday own a small business, the time to start gaining industry experience is now. The part-time jobs you work while you're in high school and college provide unique opportunities to learn your industry from the ground-up.
For example, if you're interested in owning a restaurant, firsthand experience as a waiter or line cook can be invaluable for preparing you for a career as a restaurant owner. But the possibilities aren't limited to typical part-time student jobs. In many cases, internships can provide much-needed experience in industries that are typically out of reach for student employees.
Find a mentor.
Mentors play an important role in developing the careers of future small business owners. Even though you may be years away from acquiring a small business, a mentor can guide you through the early stages of your career and help you avoid some of the common mistakes that plague young entrepreneurs.
Finding a mentor shouldn't be difficult because the small business community is very supportive of young and aspiring business leaders. Local businesses, industry networking events, small business incubators and even your area's Chamber of Commerce are great places to begin the search for the mentor that is right for you.
As a future business owner, you need to know that owning a small business will be challenging. But small business ownership can also be one of the most rewarding things you ever do. Learn as much as you can about your industry and business ownership so you're ready when the right opportunity comes your way.