Launching a small business is a challenge for many, but some entrepreneurs succeed by paying attention to changes in the market.
- As the Bureau of Labor Statistics notes, half of all small businesses fail within five years, but the small-business economy has faced additional pressures within the past three years.
- In a June 2021 interview with MSNBC, Vice President Kamala Harris claimed one-third of the small-business economy was destroyed by COVID-19, which Politifact confirmed to be 37.5%.
- Small-business startups shrank at the height of the millennial generation, with a Kauffman Foundation study finding that the number of entrepreneurs between the ages of 20 and 34 dropped 14% between 1997 and 2017.
- This is not reflected in Gen Z. Inc. reports that 72% of high schoolers have small business dreams, as opposed to 61% of previous college students.
- A 2016 EY study shows 78% of young people value entrepreneurship, 62% have considered starting a small business, and 42% would have started a business if they had the financial resources.
Why It’s Important
Millennials and Gen Z are full of aspirational and enterprising young thinkers, but many lack the resources or experience to chase their dreams. As General George S. Patton once said, “No plan of operations can be at all relied upon beyond the first encounter with the enemy’s main force.” The younger generations have faced many unpleasant realities as they’ve reached adulthood.
The Great Recession harmed many millennials out of high school, buried them in $1.6 trillion in student loan debt, and forced them to watch the housing market price them out—leading many to feel discouraged about the free market and their opportunities.
The generation following them has grown up with many of these realities and is more tuned in to technological and social changes. As a result, it is optimistic about these realities. Many are seeking new opportunities, less traditional career paths, and starting thousands of new startups.
Juan Manuel Gonzalez is the founder and CEO of G & Co., a New York-based strategy consulting firm and digital transformation partner working with enterprise companies in retail and consumer goods industries—including notable brands such as Nike and Levi’s. He did not start out as an entrepreneur. As he tells Leaders Media, he got his start as a videographer for small businesses, but he followed the market into the consulting world.
“The biggest challenge is always getting recognition when you have nothing to start with. There’s almost always someone that’s been around longer, has more reputation to their name, and can flex the numbers of its team operations. But there’s also luck that plays into everything. Just because I was working against those odds I mentioned before didn’t mean I couldn’t find an entry point. When I did find those opportunities, I made sure I latched onto them because I didn’t know when I’d get the next one,” says Gonzalez.
Gonzalez tells young entrepreneurs that the best thing they can do is always to know exactly what they are offering the market, do not get caught up with thought processes, and understand the people and businesses being served. “We can get so stuck inside our own heads that we do not ask ourselves who we’re serving and what we’re proposing we do for them that we can easily go down a hole with our own ideas and forget to market test them,” he says.
As Gonzalez notes, the modern small-business economy is still facing challenges from the COVID-19 pandemic, as well as supply chain failures, inflation, and fears of an imminent recession. The new economy also creates opportunities for new digital industries. His company was able to benefit from opening up remote consulting opportunities in Europe, Asia, Latin America, and the Middle East. However, it is easy to be fearful during these moments.
“It’s a scary thing to think about in general. But no matter what happens—a pandemic or an economic downturn—life keeps on going. Businesses have to keep on going, and they have to adapt if they aim to survive. We’ve been able to do that by focusing heavily on our ideal customer profile and, funny enough, saying ‘no,’ a lot more often. It’s allowed us to stay on course and create longer-term relationships with clients,” he says.
Change creates needs and opportunities, especially in a rapidly changing business environment. Some people are going to be well suited to change, and others less so. Those that can more closely align with change and seek these opportunities have an opportunity to upend the business market.