A major new international report from HSBC Private Bank has revealed how millennial entrepreneurs are succeeding in business by valuing purpose over profit.
The research among more than 2,800 active business owners, worth between USD250,000 and USD20m, finds that the most successful millennial entrepreneurs are distinguished by a desire to positively affect their community and economy. They are also significantly more likely to admire other successful entrepreneurs for their impact outside of business.
The key findings of the report reveal that:
- Millennial entrepreneurs (those aged under 35) are running businesses with turnover +141% higher than businesses run by older entrepreneurs (USD11.5m vs USD4.8m).
- 69% of millennial entrepreneurs say that having a positive economic impact was a factor in their decision to go into business, with 59% saying they wanted to have a positive impact in their community.
- Nearly half (47%) of all millennial entrepreneurs are female, compared to 26% of over-55s.
- The highest proportions of millennial entrepreneurs are in the Middle East (63%), Mainland China (44%), and Hong Kong (44%).
- On average, millennials’ main venture employs more than twice as many staff as those of their counterparts over 35 (123 vs 58). They also have active shareholdings in five businesses, compared to just three for those aged over 35.
- Among successful young entrepreneurs, 89% were actively involved in philanthropy last year.
Commenting on the launch of the report, Nick Levitt, head of global solutions group at HSBC Private Bank said: “The new generation of millennial entrepreneurs are revolutionising the nature of entrepreneurship. They are starting in business younger than previous generations and are involved in a greater number of enterprises. These entrepreneurs are building bigger businesses and creating more jobs. They are as motivated to create an impact on the world as they are to make money and they are having a positive impact on their communities. We also see how they are changing the nature of diversity in business; for the first time ever, we are seeing near gender equality in the next generation of millennial entrepreneurs. Women across the world are launching and operating new enterprises at an ever faster pace. This emergence reflects how women are forging ahead and succeeding in business.
“In the same way millennial entrepreneurs take a very hands-on approach to business, this is also reflected in their wealth management and philanthropy. The wealth management industry will need to shift its mind-set to a more entrepreneurial one, and adapt to serve the corporate as well as the personal needs of business-owning clients.”
Giving back strategically
The blurring of the lines between social and business objectives extends to philanthropic activities. The large majority (79%) of millennial entrepreneurs are actively involved in philanthropic activities and this number rises to 89% among the most successful young entrepreneurs, which is higher than other age groups.
In addition, they are keen to apply their expertise from the business world to generate maximum impact. Half (50%) of millennial entrepreneurs say that there is a clear strategy behind their giving and 44% say that their giving reflects social and cultural, rather than personal values. The most successful young entrepreneurs are also significantly more likely to give through investments with clearly defined social impact objectives.
Raising the next generation of business owners
Two-thirds (67%) of millennial entrepreneurs come from a business-owning family demonstrating the importance that this background can play in early business success. And among the most successful entrepreneurs, the proportion is even higher (80%).
The report shows how this heritage in business lends itself to the entrepreneurial mind-set earlier in life. When asked about the point at which they started to see themselves as entrepreneurs, 44% of millennial entrepreneurs with a family business background identified their formal education or said they had always thought of themselves as an entrepreneur, compared to 33% of those without this background.
Commenting on the influence of a family business background, Nick Levitt said: “Clearly, an individual’s upbringing can have a significant impact on the entrepreneur they eventually become. The practical support and connections provided within a business-owning family can be invaluable in growing larger enterprises. Yet, the report also shows how this background also nurtures a distinctive mind-set in the way that entrepreneurs perceive themselves and the way they conduct business.”
To read the full Essence of Enterprise report and view the infographics visit: http://bit.ly/HSBCEnterprise.