What Makes Generation Y Optimistic About Business?
Generation Y entrepreneurs are far more optimistic than their older counterparts, according to the 2010 American Express OPEN Small Business Monitor, a survey that was released last week. 72% of Gen Y entrepreneurs surveyed said they were optimistic about their business prospects and the economy, compared to just 51% overall. So what makes them so upbeat?
"My theory is that Gen-Yers may not have the overhead of some of the businesses that have been around for longer," says Alice Bredin, small business adviser to American Express OPEN. "They also may not have as many employees, or long-term leases. It's easier to feel optimistic when you don't have that." The survey, which broke down responses by age of CEO (Gen Y, Gen X, and Baby Boomers), also found that Gen Y entrepreneurs were the least likely group to have cash-flow concerns or to have reduced employee hours and benefits. And they were the most likely group to have future capital investment and hiring plans.
What's going on here? Is this just the cockeyed optimism of youth? Or are they reducing overhead by living at home with their parents and eating Top Ramen? Sure, all of that may come into play. But also consider that Gen Y entrepreneurs were most likely to allow employees to maintain a flexible schedule (41% vs. 33% overall), to renegotiate contracts and leases (36% vs. 26% overall) and to use creative marketing strategies such as social networking, to insulate their businesses from the downturn. In other words, the economy is teaching them to adopt frugal business practices at a time in their entrepreneurial careers when they can most afford to do so. All of that adds up to healthier cash flow, which Bredin thinks is the most important takeaway of the survey. "If you look at the data from businesses that characterize themselves as being in good shape, what they have in common is good cash flow," she says. "Cash is king, and that's true more than ever now."
By and large, Gen Yers appear to be a good bit more resilient than older entrepreneurs: 68.8% described themselves as "staying afloat," compared to 57.9% overall; and only 9.6% said their company was a "sinking ship," compared to 21.2% of the total.
What about you? How has your company weathered the economic storm? Do you think that generational differences impact small business survival during a recession?
Flower image by Flickr user Markusram, CC 2.0