Square, the financial services platform, recently released its first “Gen Z Entrepreneur Report” which examines how Gen Z members are faring as business owners. The survey was conducted by Wakefield Research among 250 Gen Z business owners in the United States.
According to the report, nearly three in four Gen Z business owners (72%) believe their generation has had the fewest economic opportunities given the COVID-19 pandemic, inflation and concerns linked to the recession.
Many Gen Z entrepreneurs (45%) use their personal savings to start their businesses. Broken down by gender, this feeling is shared by 53% of women and 38% of men. The report’s authors note that Gen Z’s dedication to making their business work is unrivaled, noting that 73% of Gen Z entrepreneurs say their business is their primary source of income.
“Our report reveals that owning a business is not just a side hustle for Gen Z entrepreneurs,” said Roshan Jhunja, managing director of retail at Square. “The majority plan to continue their activity while starting new businesses. This means they will be looking for a business solutions provider that will meet a wide range of needs in the future, not just one that will work in the present.
Notably, 62% of Gen Z business owners have been running their businesses for two years or less – the pandemic has opened up opportunities to turn to entrepreneurship, the report suggests. Additionally, 39% of respondents said they want to earn money to start another business or side hustle. 84% of respondents say they still plan to become business owners in the next five years.
Although 80% of young entrepreneurs start their business online or have an online component, surprisingly, 46% of them also started their business with a physical location for omnichannel operations.
“Gen Z are digital natives, but we were surprised to find that their business launches weren’t exclusively online,” Jhunja said. “Nearly half of Gen Z businesses started with a brick-and-mortar component. Businesses that are omnichannel from the start are better able to compete by engaging consumers across all channels, allowing them to stand out from the masses online-only.
Gen Z consumer behaviors lean heavily toward social and environmentally conscious brands. To meet these policies while providing a wide variety of choices to consumers, Jhunja advises brands and retailers to establish awareness and market themselves effectively by becoming easily visible on social networks and word of mouth. Approaching businesses with an omnichannel mindset (potentially through distribution partners) to facilitate online or in-person shopping will help retailers stay on top.
Additionally, Jhunja highlighted that one of the key takeaways from the report is that an overwhelming majority of Gen Z business owners struggle with financial literacy. Taxes, budgeting, building credit and accessing capital are some of the major issues new business owners face.
To help Gen Z entrepreneurs advance their businesses, Square has adapted its services to provide the technology tools needed for the next wave of business expansion and ease their workload.
“Square has a suite of online tools that enable sellers to build mobile-friendly websites and deliver 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 manage everything from one place. From in-person, online, marketing and loyalty software to 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 CEO of Savanna Boda Aesthetics, and Eve Gay, founder and CEO of Stoned Fine Jewelry, to discuss their business efforts and the future of the entrepreneurship.
Savanna Boda, founder and CEO of Savanna Boda Aesthetics.
Alexa Vossler
WWD: Why was it important for you to start your own business?
Savannah Boda: Before starting my business, I worked with plastic surgeons, medical spas, and dermatology practices, and quickly realized I wanted to do things my way. My goal was to provide the type of care I had always dreamed of when I struggled with acne and the mental and emotional pain that came with it.
I wanted to break away from the status quo of the corporate world so 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 knowing I’m helping my community of customers. I never got into this industry for the money because I believe that when you focus on your passions, the money follows.
WWD: What are the key economic policies and consumer behaviors that are important to Generation Z? And how does this impact strategic business decision making?
SB: In my practice, I’ve noticed that Gen Z consumers love instant gratification, like being able to book an appointment online rather than having to call and being able to purchase products with the click of a finger. This affects my strategic business decisions by creating a space for customers to easily purchase products and schedule appointments at their convenience.
WWD: What is the future of Gen Z businesses? And what does longevity look like?
SB: I think the future of Gen Z businesses is bright. Generation Z seeks authenticity and consistency. If you can achieve these two goals, I think longevity is inevitable.
Eve Gay, founder and CEO of Stoned Fine Jewelry.
WWD: Why was it important for you to start your own business?
Eve Gay: When I was a child, I always dreamed of being my own boss. I grew up in a family surrounded by entrepreneurs and innovators. My mother and Nana taught me a lot and inspired me. I was in college when COVID(-19) started, and one day I had the epiphany that I was supposed to become a diamond dealer and jewelry designer. My mother encouraged me to pursue my dreams. I was 21 when I started my business. Our generation doesn’t want the typical 9-5 office job because we want to explore our passions and see where it takes us.
WWD: What are the key economic policies and consumer behaviors that are important to Generation Z? And how does this impact strategic business decision making?
FOR EXAMPLE: I have seen a shift from hyper-consumerism and fast fashion to slow fashion, which is a growing trend favoring quality over quantity, wanting brands to make more conscious decisions and support more independent artists. Being part of an engaged consumer base is a behavior I’ve 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 use to interact and connect with Gen Z consumers. Although I don’t If you’re not the best TikToker, I use Instagram to connect with my audience and show them the behind-the-scenes of creating pieces or creating engaging content. Building my business alongside my audience has allowed me to create a long-term relationship with them.
WWD: What is the future of Gen Z businesses? And what does longevity look like?
FOR EXAMPLE: Growing up with the Internet, social networks and significant technological innovations give Generation Z an bottom-up advantage. The knowledge we have access to and the ability to find it quickly on the internet is something that generations before us didn’t have and that’s why I think many Gen Z businesses will be successful. The future of Gen Z businesses looks bright. I’m excited to be part of a generation that takes risks and forges its 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.
