The image of CEOs as grumpy old men hiding in smoky boardrooms is being put to rest. More Millennials are taking over businesses than ever before, and people are starting and operating businesses younger than they ever have. If you’ve got a family business, you may have an untapped resource in your Millennial family members that you want to take advantage of before they go off and start their own enterprise. Jeff Fromm, contributing to Forbes.com, tells us all about the future of business with Millennials at the helm.
Millennials Emerge as Next Generation of Business Owners and Franchisees
Over the past decade, our business landscape has shifted dramatically as a result of a new generation of business leaders stepping up and taking control.
Some of the greatest and most profitable businesses today are owned or operated by decision makers younger than 35. Millennials are launching businesses earlier than their predecessors (at an average age of 27 compared to 35 for boomers) and at nearly twice the rate.
This also leads to a better payoff at an earlier age. According to our research on affluent Millennials, there are 6.2 million millennial households earning more than $100,000 annually, and 77% of those households reported earning more than $150,000 annually. Further, Millennials compromise one-quarter of the U.S. population making an annual household income of $500,000. A major attribute of this income is a result of careers as business leaders or entrepreneurial endeavors.
Franchising is also gaining popularity among Millennials, as it offers a way for individuals to avoid the difficulties of climbing the corporate ladder.
Business Culture Is Changing at The Hands of Millennials
Millennials are changing the traditional methods of doing business from the minute they walk into the office as employees. Now, as business owners, they have a different approach to workplace culture and expectations.
According to Daniel Franklin, executive editor of The Economist, who was interviewed for Yahoo Finance, Millennials aren’t putting in long days just for the sake of saying, “I stayed late last night.”
“There is a thought that the new machismo is not going to be to stay at work every hour that is available,” said Franklin. “Spending less time at the job will allow people to strike a better balance between their work and home life.”
Many Millennials do not have the same workplace expectations of working a 9-5 job and they do not want that lifestyle for their employees. However, that does not mean they are not working hard. According to a study conducted by Allstate, just 71% of baby boomers insisted that achieving success in a career is necessary to living a good life, compared to 91% of Millennials. Millennial business owners value flexibility and a balance between work and personal life – measurement is based on output not input.
Technology is also widely regarded as a driving force for engagement in the workplace.
“Millennial franchisees are digitally savvy and are able to access information more easily, which helps us stay nimble,” said Eric Bakken, EVP and Chief Administrative Officer at Regis Corporation, the global leader in beauty salons and cosmetology education.
Millennials Might Be The Boss, But They Still Need Support
There is a serious myth that Millennials are selfish, narcissistic and think they are better off doing everything on their own. In reality, these young adults crave coaching — especially as they are making the transition from employee to decision maker.
Smart companies are establishing new training programs and continuous learning opportunities to connect with Millennials who are constantly looking to expand their reach in the office. The International Franchise Association recently launched a program called NextGen in Franchising (no relation to NxtGen Nexus—ed.) to educate Millennials about the industry.
Regis Corporation is one example of a business that is creating new opportunities to educate and prepare future franchise owners by creating video content and training to further education outreach for employees and owners. However, it is not all roses and sunshine. It is no secret that owning a business is extremely difficult, and while those that go the franchising route tend to have a much higher rate of success than those who go it alone, they must still invest significant time and oversight.
Regis Corporation wants to make sure its franchisees know not just the reward of ownership, but also the hard work that is associated. The company’s transparency is preparing the next generation to celebrate success and accept setbacks.
“It’s rewarding and you can have success and fun but not without hard work,” said Bakken. “We don’t want people to think it will be easy without real effort. But we believe it’s worth it. We’re seeing Millennial franchisees really put their own mark on the business and build unique cultures internally with their teams.”
Millennials in the business appreciate the real approach to education. This is a generation that has more access to information and came of age during a downward sloping economy. They are not afraid of hard work but demand realistic expectations and honesty.
Despite graduating and entering the job market at the peak of the recession and accruing the largest amount of student debt in comparison to other generations, Millennials are taking on an entrepreneurial role in businesses such as retail, technology, investment management and e-commerce. According to a poll by North Star Research for the Small Business Majority, 8% of Millennials own a business, 16% are making plans to start a business and 27% would like to start their own business someday.
It is important to recognize that Millennials are quickly growing up. Too many businesses have the perception that this group is still in college studying for finals and planning spring break trips. In reality, the Millennial generation is the largest group in the workforce right now. These young adults are reaching their peak earning years and are changing the business landscape as much as they are changing the social, digital and tech worlds.