The Millennial Money Survey, by F&C Investment Trust, has found 30% of UK millennials (4.6m people) aspire to start their own business in their lifetime.
However, over a quarter of this group (26%, equating to over 1.2m people) believe “money will be useful but not essential” to do it.
The study of over 4,000 people aged 18 to 35 found 14% of UK millennials aspire to start a business in the next five years, and this rises to 18% for those who want to start-up in the next decade. However, the poll shows only 11% of UK millennials intend to save or invest more in 2018 ‘in order to help start a business’.
The study also found millennials are big dreamers, but they have short-term savings strategies – half of them (about 7.8m people) are at risk of missing out on a brighter future because they don’t hold any long-term savings or investment products.
F&C Investment Trust worries that many young entrepreneurs may be underestimating the cost of setting up a new business. Ahead of Small Business Advice Week (3-9 Sept 2018), it’s urging them to consider the role of long-term saving and investing today to help them realise their future ambitions.
Commenting on the findings, Ross Duncton, Managing Director, Head of Marketing & Direct, at BMO Global Asset Management, who manage F&C Investment Trust, said: “Our study highlights the impressive level of entrepreneurial ambition among young people in the UK – 14% of people aged 35 or under aspire to start a business in the next five years; and our study indicates that they want expert help too – almost one in 10 millennials said they’d appreciate more help or education on running a business. To put that into context, that’s the same appetite (9%) they have for advice on buying or selling property.
“Small Business Advice Week is a great opportunity for budding business-owners to seek advice from professionals who are willing to share first-hand experience to help others succeed. I urge aspiring entrepreneurs to also seek advice about how they can finance their enterprise. Think about ways to build a personal savings pot, for example via investment products that can grow your cash steadily in the medium to long-term. This can enable you to self-finance a higher percentage of your business. Less reliance on bank loans or external investors at the outset, can bring more financial independence and control over business decisions in the long run.”
More budding business owners are based in the North East of England than anywhere else in the UK (35%), compared to 24% in the South West of England, which has the lowest number.
Slightly more men (20%) than women (18%) aspire to start a business in the next 10 years; and millennials under 30 are more likely (20%) than those over 30 (16%) to pick ‘start a business’ as a life goal.
More millennial entrepreneurs live in the London region (24%) than anywhere else, followed by Wales (21%); this compares to 16% in Scotland and 13% in Northern Ireland.
Optimistic millennial entrepreneurs can be found in Wales – almost a third (31%) who factor ‘start a business’ into their life goal list believe money will be “useful but not essential” to start it up.
Side hustling is alive and kicking
Not all millennials have a desire to set up their own business, and qualitative elements of the study confirmed the millennial cohort is adept at supplementing their income through side hustling. The Trust is working with intergenerational experts to understand the money habits of younger savers and investors.
Dr Eliza Filby, a historian of contemporary values and generations expert recognises the side hustle as a priority for many millennials:.
She said: “Unlike previous generations, having a side-hustle is no longer a nice-to-have-hobby but an essential income generator. It’s a life-line for millions of millennials. I’m expecting this buzzword to go big in 2018 as it shifts from slang into normal conversation. Just as the gig-economy moved out of the shadows, side-hustling is already making waves; with media reports starting to emerge about how having a “side-hustle” is a crucial contribution to many people’s household income.
“While the phrase is imbued in entrepreneurialism, I think its shift into modern culture is demonstrative of a more serious trend: how hard many young people have to work to get the money they need to survive today.”