Millennials Drawn To Business Ownership

By Evan Belanger The Decatur Daily, Ala.

WWR Article Summary (tl;dr) In a 2014 survey of millennials by the Massachusetts business school Bentley University, 66 percent of respondents said their career goals involved starting a business.

The Decatur Daily, Ala.

A new generation of millennial entrepreneurs is emerging in Decatur as data suggests the youthful generation -- those born between 1980 and 1996 -- may be more likely to rebuff traditional career paths in favor of starting their own businesses.

At least four millennial-owned businesses have opened in the city since the start of April, including a screen printer, a custom tool maker, a barber shop, and a hair extensions retailer.

Census data shows millennials still account for only a fraction of small-business ownership nationally. Just 13.5 percent were younger than 35 as of 2012 compared to 12.7 percent in 2007, according to survey data released last year.

But data also suggests millennials may be more likely to consider entrepreneurial paths as opposed to corporate careers.

In a 2014 survey of millennials by the Massachusetts business school Bentley University, 66 percent of respondents said their career goals involved starting a business.

By contrast, only 13 percent said they wanted to climb the corporate ladder to become a CEO or company president.

There are many potential reasons millennials are looking to entrepreneurship, but one could be their perception that the traditional job market does not hold the same opportunity as it did for their parents.

"I think more and more of today's young professionals tend to look at entrepreneurship instinctively due to instability in the broader job market and global economy," said John Joseph, director of Decatur Corridor Development Inc., an organization dedicated to promoting long-term growth in Morgan County.

That's certainly the case for one local entrepreneur. Originally from Detroit, Mike "Swagg" Williams got into barbering out of necessity, saying it kept him out of trouble and provided needed income in a poor job market.

"You've got to wait eight months just to get a job at McDonald's up there," he said.

At just 23 years of age, he opened Swuavo's barbershop last month on Seventh Avenue Southeast and already has more than 100 regular customers each week.

He plans to expand the business, adding televisions, a pool table and other games for customers, as well as a storefront that will sell women's hair products and accessories.

While unemployment rates fell to 4.4 percent nationally in April -- the lowest since 2008 -- data shows millennials are still struggling with student loan debt and underemployment.

According to the Federal Reserve Bank of New York, total student loan debt in the United States hit $1.31 trillion last year, more than the $779 billion in total U.S. credit card debt.

More than 11 percent of student loan debt was in default.

Additionally, analysis of Census data by the reserve bank showed 34.2 percent of all college graduates and 43.5 percent of recent college graduates were underemployed, meaning they had jobs that do not require a degree.

Local data also shows high interest in entrepreneurship.

Of nine young professionals admitted into Decatur Corridor Development's Best and Brightest Initiative last year, Joseph said one already had started an app-development company, two others plan to start businesses within the next year, and several others have requested mentors to help them start businesses.

"Millennials are less likely to think there is a 40-year job for life for them," Joseph said.

The Best and Brightest initiative is designed to get young professionals to commit to living in Decatur for five years in return for reimbursement toward their student loan debt.

Another reason millennials may be opting for entrepreneurship could be that they simply don't feel engaged in traditional workplaces.

Gallup polling released this month found that only 29 percent of millennials felt engaged in their jobs and only half of millennials polled said they strongly agreed they would be in the same jobs next year.

Gallup also reported 21 percent of millennials said they had actually changed jobs within the past year, speculating in its analysis that millennials were willing to try different jobs until they found something that felt worthwhile.

For one millennial entrepreneur, business ownership is already providing the flexibility to do things the way he wants.

TJ Jones, 30, opened Sacred Tees, a screen printing operation, last month on Valley Avenue Southwest.

With a degree in elementary education, he said his tattoos and gauged ears made him an unlikely candidate for a teaching job in Alabama.

He started screen printing for another company, but said he was frustrated the focus was on quantity over quality.

"When I started doing it on my own, I started putting out way better work, because I could spend as much time as I wanted getting it right," he said.

Now, Jones listens to punk and hard-rock music as he designs and prints T-shirts for bands, artists, churches, youth groups and missionary organizations.

The lead singer in a band, he converted his back stock room into a practice space for local bands. The name of the business is a reference to a close friend who died of cystic fibrosis.

Despite the newfound freedom, Jones said owning a business is still mostly about hustle. He hands out so many business cards, he buys them 5,000 at a time, and he regularly works 12-hour shifts in addition to another job.

In millennial parlance, working another job to support what really interests you is known as "side hustle."

While millennials may be interested in business ownership, they also face significant challenges breaking into the business world.

Young entrepreneurs tend to lack support networks such as contacts with bankers, distributors, suppliers or investors, said Larry Waye, executive director of the Decatur-Morgan County Entrepreneurial Center.

But what they lack in experience, they tend to make up with vision, passion and energy, he said.

"I think they offset each other," he said.

Waye said he hasn't noticed a sharp increase in young people trying to start businesses, but students as young as high school have taken the center's Business 101 course, designed to help entrepreneurs craft business plans.

Of three millennial entrepreneurs interviewed last week, all said they simply saved their own money to get their businesses started.

Alexis Wooden, co-owner of Jem Hair on Fifth Avenue Southeast, started selling hair extensions in high school to pay the fees to form her corporation.

With co-owner Cortez Elliott, the business sells imported human hair for use by hair dressers and beauticians.

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