Square, the financial services platform, recently released its first “Gen Z Entrepreneur Report” looking at how members of Gen Z are faring as business owners. The survey was conducted by Wakefield Research and polled 250 Gen Z business owners in the U.S.
According to the report, nearly three in four (72 percent) of Gen Z business owners believe that their generation has had the fewest economic opportunities given the COVID-19 pandemic, inflation and concerns of the recession.
Many Gen Z entrepreneurs (45 percent) are using personal savings to start their businesses — broken down by gender, this sentiment is shared by 53 percent of women and 38 percent of men. The authors of the report note that Gen Z’s dedication to making it work is second to none, pointing to 73 percent of Gen Z entrepreneurs who say that their business is their main source of income.
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“Our report found that being a business owner isn’t just a side hustle to Gen Z entrepreneurs,” said Roshan Jhunja, general manager of retail at Square. “The majority plan to continue their business while also starting additional ventures. This means they’ll be looking for a business solutions provider that fits a broad range of needs into the future, not just one that works in the now.”
Notably, 62 percent of Gen Z business owners have been running their businesses for two years or less — the pandemic opened up opportunities for a pivot into entrepreneurship, the report suggested. Furthermore, 39 percent of those surveyed reported the desire to earn money to start another business or side hustle. Another 84 percent of survey respondents say they still plan to be business owners in the next five years.
Despite 80 percent of younger entrepreneurs starting their businesses online or having an online component, surprisingly, 46 percent have additionally launched their business with a physical location for omnichannel operations.
“Gen Z are digital natives, but we were surprised to find their business launches were not exclusively online,” said Jhunja. “Almost half of Gen Z businesses started with a physical component. Businesses that are omnichannel from the outset are better able to compete by engaging consumers across all channels, helping themselves stand out from the masses that are online-only.”
Gen Z consumer behaviors lean heavily toward social and environmentally conscious brands. To address those policies while simultaneously providing a wide variety of consumer choices, Jhunja advises brands and retailers to establish brand awareness and market themselves effectively by becoming easily discoverable on social media and word of mouth. Approaching business with an omnichannel mindset (potentially through distribution partners) for ease of buying online or in-person, will help retailers stay on top.
Additionally, Jhunja called out that a key takeaway from the report is that an overwhelming majority of Gen Z business owners are having difficulty with financial literacy. Taxes, budgeting, building credit and access to capital are some major issues new business owners are facing.
To aid Gen Z entrepreneurs in moving the needle forward with their businesses, Square has adapted its services to provide the necessary technology tools for the next wave of business expansion and ease their workload burden.
“Square has a suite of online tools so sellers can build mobile-friendly websites and offer personalized shopping experiences across channels for maximized exposure and increased sales,” said Jhunja. “Square offers omnichannel solutions on a single, integrated platform so businesses can run everything from one place. Whether it’s in-person, online, marketing and loyalty software, or banking solutions, Square has everything a business needs no matter what stage they’re at.”
Here, WWD speaks with Gen Z Square sellers Savanna Boda, founder and chief executive officer at Savanna Boda Aesthetics, and Eve Gay, founder and chief executive officer at Stoned Fine Jewelry, to discuss their business endeavors and the future of entrepreneurship.
WWD: Why was starting a business of your own important to you?
Savanna Boda: Before starting my business, I worked with plastic surgeons, medical spas and dermatology offices, and soon realized I wanted to do it my way. My goal was to offer the kind of care I’d always dreamed of when struggling with acne and the subsequent mental and emotional pain that came with it.
I wanted to break away from the status quo of the corporate world so that I could follow my passions on my own schedule. I’m also addicted to making people feel good about themselves and I get so much joy out of knowing I’m helping my community of clients. I never got into this industry for money because I believe that when you’re focused on your passions, money will follow.
WWD: What are some of the key economic policies and consumer behaviors that are important to Gen Z? And how does it affect making strategic business decisions?
S.B.: In my practice, I’ve noticed that Gen Z consumers like instant gratification such as being able to book appointments online rather than having to call and being able to purchase products with just the click of a finger. This affects my strategic business decisions by creating a space for clients and customers to be able to easily purchase products and book appointments at their own leisure.
WWD: Looking ahead, what is the future of Gen Z businesses? And what does longevity look like?
S.B.: I believe the future for Gen Z businesses is bright. Gen Z looks for authenticity and consistency. If you can deliver those two, I feel that longevity is inevitable.
WWD: Why was starting a business of your own important to you?
Eve Gay: When I was a kid, I’d always dreamt of being my own boss. I grew up in a family surrounded by entrepreneurs and innovators. My mom and Nana taught me a lot and inspired me. I was in college when COVID[-19] started, and I had an epiphany one day that I was meant to be a diamond dealer and jewelry designer. My mom encouraged me to chase after my dreams. I was 21 when I started my business. Our generation doesn’t want the typical 9-to-5 desk job because we want to explore our passions and see where that takes us.
WWD: What are some of the key economic policies and consumer behaviors that are important to Gen Z? And how does it affect making strategic business decisions?
E.G.: I have seen a shift from hyper-consumerism and fast fashion to slow fashion, which is a growing trend toward quality over quantity, wanting brands to make more conscious decisions and supporting more independent artists. Being a part of an engaged consumer base is a behavior I have noticed is important as a Gen Z consumer and business owner myself.
Eighty-five percent of Gen Z is online, so having a healthy online presence and active community is something I utilize to engage and connect with Gen Z consumers. While I am not the best TikToker, I use Instagram to connect with my audience and show them all the behind-the-scenes that go into making pieces or creating captivating content. Building my business alongside my audience has allowed me to create a long-term relationship with them.
WWD: Looking ahead, what is the future of Gen Z businesses? And what does longevity look like?
E.G.: Growing up with the internet, social media and significant innovations in tech give Gen Z an upward advantage. The knowledge we have access to and the ability to find it quickly on the internet is something the generations before us didn’t have and is why I believe many Gen Z businesses will succeed. The future of Gen Z business looks bright. I am excited to be included in a generation taking risks and paving their own path. Not fearing failure is one of the most important lessons you can learn as a young person. My openness to failure has given me the confidence I need to succeed.
This content was originally published here.
