Although unemployment amongst the young has fallen in the last year, many millennials know only too well the frustration that comes from hours spent applying for jobs never to hear back.
With entrepreneurship a more attractive career path than ever, it’s no wonder that seven out of ten millennials would rather create their own job than work for someone else, and those who have set up their own businesses do things very much in their own way.
Here are five lessons SMEs can learn from this new generation of business owners:
Money doesn’t have to come from a bank
The days of needing a bank loan to start your business, or raising the cash yourself, are no more. Scores of non-traditional lending sources have come to the fore and up to 14% of young entrepreneurs are using this to their advantage.
Young business owners are less interested in taking advice from conventional advisors, instead they are more likely to research financial products online in search of innovative and flexible alternatives.
From peer-to-peer lending platforms like Lending Works to crowdfunding, millennials are favouring services that offer cash quickly and have a lower barrier to entry, like unsecured loans for small businesses which are repaid from a percentage of your credit card takings.
Of course, millennial business owners don’t have the same credit history or collateral that established businesses do, meaning they often seek alternative funding out of necessity.
However, considering that the alternative finance sector has boomed thanks to the internet, lending via technology just might be the way that the industry is headed.
And even if it isn’t a necessity for more established businesses, an abundance of options and competition can only be a good thing.
Technology opens up your customer base
Over 80% of millennials believe they can use technology to make it easier to become their own boss, and millennial business owners, being digital natives, are using technology to their advantage.
Without the cost of physical offices or travelling to meetings, young SME owners favour fast, virtual communication which also allows them to market to a wider customer base and they’re more likely to trade internationally than those over the age of 45.
In contrast, the UK Business Digital Index by Lloyds Bank found three out of ten UK SMEs still lack basic digital skills.
With young workers expecting to use social media, instant messaging, video and blogs in a work capacity, perhaps it’s time for established businesses to integrate these media into their processes.
Work-life balance should be a priority
While millennials are ambitious, they also value their personal time, viewing self-employment as a means to balance work with other commitments.
The Millennial Majority Workforce study found that two-thirds want flexible working hours while 56% want flexibility around where they work.
Most tellingly, millennial business owners also want this flexibility for their employees.
The general consensus among millennials is that business should have a sense of purpose in addition to profit, as well as an awareness of employees, with more than a third saying they would prioritise staff’s well-being.
For example, the hugely profitable influencer marketing agency The Social Chain, run by two 20-somethings, offers its team members unlimited annual leave with no need to give notice.
It’s worth bearing in mind that whether your business employs millennials or not, the more commonplace these working practices become, the more deeply it will change workers’ expectations.
Transparency is good for business
Like some previous generations millennials have grown up in the midst of economic recession and banking and political scandals, so it’s no surprise that they are increasingly rejecting the status quo in favour of brands that build consumer trust through greater transparency and, in this digital age, more transparency is achievable by the brands.
As both consumers and business owners, millennials expect certain qualities in brands including social responsibility (40%) and talking about important issues (30%) and as employees they are willing to forego a high salary to work for like-minded organisations.
Through leading by example, and holding themselves and others to account, millennial entrepreneurs believe businesses should generate jobs and improve society as well as turnover a profit, which in turn is changing the way employers view and nurture their employees.
As millennial business owners work to create a more digitally savvy, flexible and accountable business landscape, British consumers are taking note and it would serve established businesses well to follow suit.
Nobody should have to know all the answers
It may be easy for business owners to look down on young people for their lack of knowledge or experience.
However, when there’s something a millennial doesn’t know, they relish the opportunity to learn and will search the internet until they figure it out; millennials simply don’t see a lack of knowledge as a barrier.
Whether you think millennial business owners are wet behind the ears or are bringing valuable new ideas to the table, in 2014 62% of millennial-owned businesses reported increased sales over the previous six months compared to 41% of overall SMEs and they were the most likely to grow their workforce that year.
With this point we come full circle; one of the biggest frustrations millennial job seekers face is the ‘need for experience to get experience’ and not being given the chance to prove they can take on a new challenge.
However, where the higher education system has left UK businesses with skills gaps, SMEs may do well to invest in their training and leadership programmes to avoid losing even more millennial talent to entrepreneurship.