Small Business: 4 Challenges Facing Gen Z Entrepreneurs and How They Can Be Fixed
Like just about every generation, Gen Z tends to think of itself as a breed apart — much different from the elders who came before them. The jury is still out on how different they might be, but it is true in at least one respect: Gen Z seems to have a much more entrepreneurial spirit than other generations, though many of its business challenges are the same.
I’m a Financial Advisor: 10 Most Awesome Things You Can Do for Your Finances in 2024
Owe Money to the IRS? Most People Don’t Realize You Can Do This – Today
A survey conducted by GOBankingRates found that more than half (51%) of 18- to 24-year-olds aim to become entrepreneurs, and 14% have already taken the leap — higher percentages than any other age group.
A 2022 survey from the Apple Store revealed even higher numbers. It found that more than six in 10 Gen Zers said they have either started or intend to start their own business, poising Gen Z to become “the most entrepreneurial generation the world has seen.”
The reasons such a large percentage want to start businesses are many and varied, ranging from wanting to set themselves up for early retirement to investing their profits in social good.
Perhaps most importantly, Gen Z is the first generation to grow up with social media from an early age. This means they have the tools and network connections to start a business or side hustle right there on their tablets. Some have even used social media itself as the launching pad to fame and fortune as influencers.
But for most Gen Z entrepreneurs, turning businesses into success stories is not easy. Here are four of the biggest challenges they face.
1. Lack of Resources
A recent survey of 500 American business owners conducted by iStock found that the biggest challenge facing Gen Z entrepreneurs was a lack of resources such as money, people and time. Nearly two-thirds (62%) cited this as the biggest challenge.
A lack of resources is nothing new — it has plagued young entrepreneurs for centuries. In the past, the main way to overcome that challenge was to seek financing from banks, investors, family/friends and other lenders. Those are still options today. But Gen Z has another option that previous generations lacked: crowdfunding, which lets you raise large sums of money quickly for your new business.
2. Developing a Business Plan
Young entrepreneurs often have innovative ideas about products and services that could become a hit among consumers. But many lack the basic skills to develop a business plan. As a blog from legal services and consulting firm Wolters Kluwer noted, a business plan is the “blueprint” for your enterprise that establishes its identity, offerings, brand and map to success. Without one, you’ll find it difficult to attract investors and customers and navigate your way through the various stages of growth.
The best solution is to network with experienced business experts, consultants and other entrepreneurs and use their expertise to guide you through developing a business plan. Some business incubators will provide these services for free, while in other cases you might need to invest some of your money into hiring experts.
3. Data Security
Cybercrime has become a major problem in the era of digital commerce, and one that previous generations didn’t have to worry too much about. For Gen Z entrepreneurs, battling hackers, data breaches and other threats should be a high priority. This means not only putting the right security measures in place but also adopting the latest technologies as cybercriminals evolve. This is true even for small startups whose businesses are built around little more than an app.
4. Increasing Visibility
In the iStock survey, about half of Gen Z entrepreneurs said one of their biggest challenges is “increasing visibility and generating quality leads.” This essentially means getting your brand in front of more people and developing a larger network of potential clients.
Grant Cardone: What To Do If You Don’t Have Money
Unless you have the backing of a high-profile partner or investor, you’ll start out as an unknown entity and then build your brand from there. This is especially problematic for Gen Z entrepreneurs because the field is so crowded with other Gen Z entrepreneurs. Once again, the best solution comes down to networking. Seek out marketing/branding partners with expertise in your niche and the tools to get the word out.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Small Business: 4 Challenges Facing Gen Z Entrepreneurs and How They Can Be Fixed
