Companies run by young entrepreneurs are more likely to make a profit than those run by older business owners, new research shows, although a lack of industry knowledge remains a major roadblock for tyros.
The research, conducted by American Express, is based on a nationwide survey of 1,012 small business owners, of which 275 were aged 18-34.
This age group has experienced above-average growth over the past 12 months, with 46% growing their client base, compared to 35% for the average small business owner.
More than two in five (42%) have increased their revenue (compared to 33%) while 34% have expanded their product or service offering (compared to 26%).
More than half (56%) of young small business owners have seen an increase in profits over the last financial year, compared to an average of 40%.
Business owners under the age of 35 are also more positive about the year ahead, with nearly half (47%) anticipating increased revenue over the next year.
Meanwhile, more than one in four expects to take on more staff.
This compares with an average of 41% of all business owners who expect revenue increases, and just 14% who anticipate staff increases.
But despite their confidence, young business owners acknowledge there are still some areas in which they need assistance.
Their greatest challenges over the past year include a lack of knowledge about how to grow their business (36%) and access to finance (30%).
American Express spokesperson Amelia Zaina says finance is “often a stumbling block” for small businesses, who are “experts at what they do”, but not necessarily in finance.
“The past year has shown younger business owners to be both resilient and resourceful, and they are leading the way forward,” Zaina says.
“[However,] business owners aged 34 and under cite cashflow as the number one factor for future-proofing their business.”
Zaina says young entrepreneurs shouldn’t underestimate the importance of seeking advice from older, more experienced businesspeople.
“Seeking advice from those who have walked in your shoes before you is invaluable,” she says.
“Not only can it help owners avoid certain pitfalls, it also brings a fresh perspective.”
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