Millennials and gen Z driving growth in the number of Aussie small business owners

The number of millennial and gen Z small business owners is on the rise according to research released by the Commonwealth Bank of Australia (CBA), with these younger generations accounting for 63.3% of the bank’s business transaction account openings in the 2023 financial year.

The CBA study, conducted in partnership with online research group YouGov and released on Monday, focused on the primary drivers for launching a new business, the challenges budding business owners face along the way, and the business types being set up.

In the past three years, 46% of entrepreneurs have started a small business with the bank, with the research showing that millennials accounted for 48.5% of all new business transaction accounts while gen Z opened a further 14.8% of new accounts in the 2023 financial year.

More women were also found to be seizing the opportunity to start or run their own business or side business, opening up 43.2% of new business transaction accounts with CBA in the 2023 financial year.

Melbourne-based leadership development business The Intime Collective founder Louise Gilbert told SmartCompany the CBA research reflects her experience.

“There are so many opportunities to make a difference and I think people are craving more meaning in their lives,” she says.

“You have to work very hard and be open to constantly learning, but running a small business is the way to create something that’s yours, something that creates a positive impact.”

The Intime Collective, which offers change management consulting, has now been around for just over four years.

“I originally founded the business because I had a problem in my own relationship I thought was worth solving for,” says Gilbert.  

“I left my former corporate career leading large change and transformation programs and started my entrepreneurial and small business journey to solve that problem.”

Gilbert says she has “never been happier” having ventured out to establish her own business.

“To be able to do the work you love, with people you like, in the way you want is magic,” she says. 

“My kids are young but they understand how my business makes money and what that means for our family. I love that for them. I was taught similar lessons by my dad when I was growing up.”

The CBA research revealed one of the primary motivators for young people to start a new business or side hustle is the desire to create something that is “theirs”, with 51% of new business owners looking for extra income and 23% looking for more control and freedom over their career.

CBA executive group manager of small business banking Rebecca Warren says the research reveals young people, primarily millennials and gen Z, are driving growth in the number of small business owners. 

CBA executive group manager of small business banking Rebecca Warren. Source: Supplied

“Young people are starting a small business or side hustle for a variety of reasons, but predominantly for work-life balance, more control, freedom and independence over their careers as well as to supplement their primary income,” she says. 

Warren says while it has been a challenging year for many small business owners, the growth in the number of people starting their own small businesses reveals the great Aussie entrepreneurial spirit is alive and well.

“Starting a small business is hard work in any environment and between the pandemic, inflation, supply chain issues, and workforce challenges, running a business over the past few years has been incredibly challenging,” she says. 

“Some businesses thrive during times of economic uncertainty, but it all depends on the kind of businesses you intend to start. 

“What small business owners all have in common is the belief in an idea that makes it possible to overcome challenges and ultimately succeed.”