According to a recent study, 67% of business owners are expected to retire in the next 10 years. Baby Boomer owners are selling their businesses at a record rate, leaving the door open for a new generation of business owners to take shape. This crop of new entrepreneurs is drastically different and dramatically changing the small business landscape.
Here’s a look at this new group of entrepreneurs – younger and more diverse than ever before:
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Millennials Shaking Things Up
Research indicates 70% of Millennials say they’d reject traditional business to work independently. Those Millennials who have taken the leap and started their own ventures have experienced significant success. In fact, 47% of Millennial-led businesses exceeded revenue goals last year, as opposed to 21% of Boomer-led enterprises.
These are the leaders of small business entrepreneurship in the future, at least according to 66% of current small business owners surveyed.
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Women Emerging as Entrepreneurs
Millennials aren’t the only group making their mark on the small business landscape. Recent years have seen a surge in women entrepreneurs as the daily average number of businesses started by women has doubled in the last three years. In fact, the number of women-owned small businesses in the U.S. has increased 50% faster than the overall number of small businesses since 2014.
In addition to the obvious tangible needs, starting a business takes vision, drive, and the ability to juggle many things at once. These are areas in which many women tend to excel. Research shows that 30% of U.S. small businesses are owned by women, which is a number that’s likely to increase as more and more women choose this path.
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The Changing Face of Business
We know Boomers are selling their businesses at a record pace and younger entrepreneurs are taking them over or starting anew. Not only are those entrepreneurs younger, but they’re coming from more diverse backgrounds. The U.S. is a melting pot, and the small business landscape is not unlike that national makeup.
Of those interested buyers of Boomer businesses, 19% were of Asian/Pacific Island decent, 15% were Hispanic, and 12% African American. When it comes to startup ventures, Latino-owned new businesses increased from 11% in 2001 to 23% in 2011.
As you can imagine, diversity in business and other sectors of American society will increase as America trends toward what the U.S. Census Bureau dubs a “plurality nation.”
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Veterans Assuming a Different Role
Entering the business world with varied experiences in the military, veterans increasingly seek to start and run a business of their own. As they look to transition from the life of an active service member to a member of the civilian workforce, veterans offer an inherent leadership quality. They excel at teamwork and are used to leading a group of people to accomplish a common goal. A strong work ethic and the ability to self-direct make veterans a natural fit for running a business.
More and more veterans are starting down that path after service. According to the Small Business Administration, many are going down the road of entrepreneurship. In fiscal year 2015, loans to veterans rose 101% in the total dollar amount and 45% in the number of loans from the previous year.
In the time it took to write this post, it’s pretty likely that at least one U.S. business opened its doors for the first time. If research is any indication, chances are that owner is young, diverse, and ready to put his or her stamp on American commerce.
To learn more about the next generation of business owners, click here.
Andy Childs is the vice president of Marketing at Paychex, a leading provider of human capital management solutions for payroll, HR, retirement, and insurance services.
