Millennials are often maligned, fairly or not, for having an over-large sense of entitlement and self-involvement. But a new study released Wednesday by Wells Fargo says that popular conception has it all wrong, at least when it comes to business ownership.
Millennial entrepreneurs want to grow their businesses for the long haul, and they have plans to leave their businesses to their kids, the study reports. Just as important, they want to feel like their work really matters. And like their older peers, they have an aversion to debt and risk that, in healthy doses, is likely to help their businesses grow.
“There was some myth-busting that this study really helped uncover,” said Doug Case, small-business segment manager for Wells Fargo.
Wells conducted an online poll of 1,000 business owners in March and April. The sample was split between millennial and older business owners. Millennials are defined as people born between 1981 and 1997. Older entrepreneurs, for the purposes of the survey, are defined as those aged 36 and older.
Eighty percent of millennial business owners said they want to develop their businesses over the course of many years, and potentially hand them down to their children someday. That’s more than the 66% of older business owners who said they want the same thing. Surprisingly, only 6% of millennial respondents and 9% of older respondents said they had either inherited or bought the businesses they now run. Most started their businesses from scratch.
Along those lines, nearly 60% of millennials said they started a business because they want to feel passionate about what they are doing. Slightly more than half of older entrepreneurs noted passion as a key element for starting a business.
Each age group reported uneasiness about taking on debt, though more millennials said they were willing to use debt to grow their businesses compared to older entrepreneurs. Indeed, 43% of millennial business owners report having taken on some form of personal debt to build their business, mostly in the form of carrying a balance on their credit card.
Of course, the younger set also has significant student-loan debt: 44% of millennials in the survey had average student loan debt of $25,000 or more, compared to 36% of older business owners.
And those debt levels will likely have an impact on how much these entrepreneurs are willing to borrow for their businesses.
“That has to shape your attitude toward debt and borrowing responsibly,” Case said.
Millennials, however, confessed to knowing less about financial matters that are key to their businesses. Less than half said they were very knowledgeable about their business’s finances and dealing with financial matters, compared to nearly 60% of older business owners. Similarly, 41% described themselves as very successful dealing with the finances of their enterprises, compared to 47% of older business owners.