Britains young entrepreneurs are set to lead the UKs economic recovery, after a study found that they are much more ambitious than more elderly rivals.
The report, from venture capital investors Albion Ventures, revealed that young business owners aged under 35 are on average twice as ambitious about their firms growth prospects, and four times as likely to hire new staff, than older generations of business owners.
Its growth report revealed that among over 1,000 SMEs, one in six under-35s said their firm would grow dramatically over the next two years compared to just eight per cent of 45 to 54 year olds.
Almost a third, 29 per cent, of millennial entrepreneurs said they had attempted to raise finance in the last year compared to 14 per cent of their middle-aged counterparts.
However, over the same period younger owners were five times as likely to see their applications rejected than those of more mature years. This, said Albion, potentially reflects an unwillingness of lenders to extend finance to business owners with shorter track records .
As a result, younger business owners are taking greater risks to finance growth with one-in-four of under-35s having used their credit card to fund the business compared to five per cent of older business owners. Around 15 per cent have mortgaged their property to do so, versus only seven per cent of 45-54 year olds.
However 42 per cent of under-35s said they would raise external equity “suggesting a generational shift in the approach to equity investors”.
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Under-35s are more likely to seek finance to invest in R&D, hire new staff and to bring about a change of ownership than older owners. However despite the ambition younger owners said skill shortages were holding them back.
One-in-four cited a lack of mentoring as a major challenge to growth, while 16 per cent and 23 per cent said they would benefit from better financial management and business planning respectively.
Patrick Reeve, managing partner at Albion Ventures, said: The younger generation is by far the most optimistic and ambitious about the future. This pro-growth sentiment is excellent news for the UK economy as the under-35s will become increasingly influential over the years to come.
“The greater willingness of younger business leaders to use equity rather than banks to secure the funds they need suggests were shifting towards a more entrepreneurial model as seen in the US. That younger entrepreneurs are honest about their skills shortages and are in most need of mentoring is a call of help that we shouldnt ignore as it’s in our collective interests to encourage their long-term success.