New research shows that many Generation Ys have aspirations to run their own businesses but are being put off by the state of the economy. However, there’s never been a better time to set up a new firm.
A poll of 18 to 34 year olds found that over half (54%) wanted to start their own business but that only 8% owned a business now and 11% said they planned to set one up in the next year. Over a third said the economic conditions had caused them to put their entrepreneurial plans on hold, while others said they either couldn’t get their hands on the small business financing to follow their dream or didn’t think they had the knowledge to run their own firms. (1)
Young people have the right idea as far as their intentions. This country will need to create a total of 21 million jobs this decade to put the Americans who lost their jobs in the recession back to work and employ a growing population. (2)
But there’s no evidence the corporate world is going to generate the required jobs any time soon. In fact, indications are that the “jobless recovery” – where the economy climbs out of recession without generating any new jobs – might now be the norm. Twenty years ago companies sacrificed some productivity and profitability until demand picked up, but today their first reaction to a downturn is to chop jobs. (2)
So while the Gen Y’s entrepreneurial instincts are right, their hesitancy is well wide of the mark. The list of major companies that started in a recession is as long as your arm: FedEx, Microsoft, CNN, LexisNexis, MTV. (3) Need I go on? All moderately successful firms I’m sure you’ll agree.
If your idea is good enough to succeed it’ll succeed regardless of the state of the economy. In fact, there are plenty of advantages to starting up when the economy’s all gloom and doom. Labor and rents are cheaper and you’re likely to be able to drive a harder bargain with suppliers. Could there be a better time to bootstrap a start-up than when every firm is tightening its belt? Also, you’ll have less competition as how many others will have the guts to do what you’re doing?
So if you’re in your 20s or 30s, would love to be an entrepreneur, but can’t see a way of making a success of it right now, think of the movie “Dead Poet s’ Society”. No really. Just remember what Robin Williams’ teacher told his preppy charges: “Carpe Diem. Seize the day, make your lives extraordinary!”
- Poll by the Young Invincibles and Kauffman Institute
- Research by McKinsey Global Institute, “An economy that works: Job Creation and America’s future”
- 14 Big Businesses That Started in a Recession- InsideCRM