Small Business Startup News
Young Entrepreneurs Less Likely To Take Risks
Written by Tim Morral
Study shows Gen Y more averse to serial entrepreneurship and risk-taking than they were before the economic downturn.
In the entrepreneurial universe, profit and risk are two sides of the same coin. To achieve business success, entrepreneurs need to embrace risk, demonstrating a willingness to sacrifice time, capital and other investments -- it's part of the psychology of entrepreneurship.
During the latest recession, economic uncertainty caused many entrepreneurs to shy away from risk-based activities. But now that the recession is over, Gen Y entrepreneurs have not fully recovered when it comes to their attitudes toward risk.
According to the American Express OPEN Ages Survey, just 56 percent of Gen Y entrepreneurs report that they like to take risks, down from 72 percent in 2007. Boomer attitudes toward risk are largely unchanged, with 54 percent indicating a willingness to embrace risk, compared to 53 percent in 2007. However, both generations reported that managing their businesses through the recession made them better entrepreneurs.
"Resilience is a trait shared by both generations of entrepreneurs," said Susan Sobbott, president of American Express OPEN. "Younger business owners channeled their passion through innovative thinking and thrived in the face of adversity while older entrepreneurs relied on experience to weather the storm and find a better life balance."
Other findings from the study include:
- The leading reason why Gen Y respondents became entrepreneurs was to pursue their passion (26%). Boomers motivations are split between being their own boss (28%) and making money (28%).
- Not surprisingly, Gen Y entrepreneurs are more likely to embrace technology to market their businesses (81%) than Boomers (61%). Currently, 51 percent of Gen Y entrepreneurs have a company presence on a social media site (compared to 19% in 2007) -- substantially more than the 30 percent of Boomers who use social media (compared to 11% pre-recession).
- Both Boomers and Gen Y entrepreneurs are less optimistic about the economy over the next year than they were in 2007.
For more information, visit the American Express OPEN website.
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