There are all kinds of theories and studies about millennials and work. But a new study of this complex and elusive generation has explored why millennials aren’t becoming entrepreneurs. In fact, according to the Kauffman Foundation, the business ownership rate among millennials is lower now than it was for the 20-34 age group in 1996.
The latest poll of Americans aged 18 to 34 conducted for Young Invincibles and Small Business Majority found that 8 percent of millennials own a business, 16 percent are planning to start one, and 27 percent would like to own a business one day. But challenges are keeping many millennials from going into business for themselves. While it does seem the entrepreneurial spirit is alive among millennials, many of these would-be entrepreneurs are deterred by high student loan debt, the survey found. More than 60 percent of the millennials surveyed had student loans and nearly half of millennials who do own a business or plan to start one cite their student loan debt as a major obstacle to business ownership. “Nearly 40 percent of millennials who would like to own a business someday said student loan debt is affecting their ability to start one,” reported the study.
Interestingly, the study found that millennial men are more interested than women in owning their own business, and African-Americans are more likely to have entrepreneurial dreams than Hispanics or whites. Even still, the numbers are lower than previous generations.
Student loan debt may be one reason for the lack of millennial entrepreneurs, but Digi-Cultural Trend Analyst/Producer Lauren DeLisa Coleman, founder of Lnk Agency told us there’s more to it, especially when it comes to Black female millennials. “It’s because that funding is so unbalanced right now that it’s not even funny. They desperately need support. They have the ideas and passion, that’s for sure, but this is the biggest issue: venture capital remains overwhelmingly white and male.”
The author of the newly released “America’s Most Wanted: The Millennial: How to Quad Decode and Trend Forecast,” continued, “This is horrible given their numbers in the population, not to mention they out-index across every single metric! (i.e. mobile phone usage, frequency in social media posts, etc. etc.).”
Despite the lack of venture capital funding, millennials are a good investment, Coleman said. “Those who invest with them will definitely get a return given that they will, more than likely, have larger views of the population and a better understanding of how to speak across demos given who they are and how they socialize. In my book, I talk about how we cannot generalize when it comes to millennials. There is no one-size fits all. Depends on if it’s what I call a Uber, Culture, Vice, or Wildcard millennial sub-group. They each have different values and goals.”
Hatsu Ramadhan is one such millennial. Ramadhan, who is Black American, founded his own e-commerce businesses, Great Deals and HAZ Financial, and he pointed to other reasons holding millennials back from being entrepreneurs. “Millennials who aren’t entrepreneurs aren’t because of the pressure from society — go to school, beg for a job, hope to get hired, and then go work for someone else just to get by — and parents/peer influence,” he told us. “Additionally, fear, lack of knowledge, motivation, and discipline play a large factor. You must be self motivated and disciplined once you step into the world of entrepreneurship.”
Nicole Ingram, founder/Principal Designer of Stacy Nicole Interior Design + Furnishings, Inc., believes the lack of entrepreneurs in this generation has to do with millennials being noncommittal. “To be a successful entrepreneur it requires an idea and passion to complete it, if [millennials] lack tenacity their idea will not last but a few short months, and the dedication to stick it through. Quite a few millennials have tried and failed and as a result they have given up.
“Many have failed to stay committed to what they have set out to do once the feeling they made that commitment has left,” added Ingrim who is a Trinidad, West Indies-born, American-raised educator, and interior designer. She also hosts Urban Design + Living and founded Designing for Child.
And yet another theory, according to Laura Casey, is millennials are late bloomers. Currently working as a research analyst at a FinTech startup, Casey said she eventually wants to start her own business–just not now due to fear of being in debt and also just not being ready to be a business owner yet. “I was just coming of age (16) in 2008 when I saw things my parents had worked their entire life for disappear overnight. Multiple houses on my street went into foreclosure and my friends worried about being able to afford college. This has made me extremely cautious and worried about borrowing money or ever being in debt. Unfortunately, most startup businesses require some form of debt that many millennials just don’t want to take,” she said, adding, “Millennials tend to do things later than previous generations — like marriage and kids — and I don’t think entrepreneurship is an exception.”