The Great Recession appears to have quenched millennials' thirst for running their own business, a new study finds.
Research from American Express OPEN revealed that the number of Generation Y entrepreneurs who started their own business straight out of school has dropped from 28 percent in 2007 to 16 percent this year. As a result, the number interested in serial entrepreneurship also slumped considerably over the last six years, from 59 to 44 percent.
When compared to their baby boomer peers, the younger generation's first economic downturn has also made them more risk-averse. The study found that 56 percent of Gen Y entrepreneurs said they like taking risks, down from 72 percent in 2007, while Baby Boomer entrepreneurs' appetite for risk remained virtually unchanged.
The recession wasn't a total waste, however, for either millennials or boomers. The research discovered that 80 percent of those surveyed from both generations attribute managing their businesses through the economic downturn as the reason they became better entrepreneurs. In addition, they said the difficult times helped them become more creative in their marketing and improved their financial management.
"Resilience is a trait shared by both generations of entrepreneurs," said Susan Sobbott, president of 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 addition to how they weathered the turbulent economy, Gen Y and baby boomer entrepreneurs also clashed in a number of other ways, including the motivation behind opening their business in the first place. The primary reason the millennials surveyed became entrepreneurs was to do something they were passionate about, while being their own boss and making money were the primary drivers for baby boomers.
That hunger is driving Gen Y entrepreneurs, more than their older peers, to attempt new ways to grow their business. The study shows that young small business owners who were motivated by passion to start their businesses are more likely than baby boomers to have a social media presence for their business and offer customers rewards or discounts for their repeat business.
Additionally, and most important, they are more likely to have experienced higher revenue growth over the last three years.
The study was based on surveys of f 600 small business owners/managers of companies with fewer than 100 employees. The sample was split evenly between Generation Y small business owners, ranging in age from 24 to 35, and baby boomer small business owners between ages 42 and 64.