The number of millennial directors of SMEs in the UK has increased by more than a third in a year, with ‘generation start-up’ helped by lower costs of entry including the rise of shared workspace and cloud computing, research from Moore Stephens shows.
According to its analysis, there was a 37% rise in the proportion of directors born 1981-1996 of companies with a turnover of less than £25m, to hit 56,000 in 2017/18, up from 41,000 in the previous year.
The firm says the difficult post-credit crunch job market that many graduates faced upon leaving university has incentivised many to launch their own businesses, while the recent rise of the ‘gig economy’ has also given more young university and schools leavers a taste of managing their own workload.
Moore Stephens says many of the entry barriers to starting a business, including initial launch costs, are now much lower than in previous years. The growth in cloud computing and ‘software as a service’, for example, continues to cut the up-front cost of IT needed for a small business.
The increased availability of shared and flexible workplaces, such as Central Working and WeWork, has also helped make it easier for a start-up to launch and scale up. In 2017, flexible workplaces represented 4.5% of total stock of central London office space, up from approximately 1.7% in 2007.
Ross Northall, partner at Moore Stephens, said: “The dream of launching a start-up has become increasingly attainable to many. The start-up boom of the last generation of entrepreneurs saw the success of technology companies, such as King Digital, Net-a-Porter and ASOS, that has served as an inspiration for the current generation. Millennials are now taking what they have learned from that earlier wave of businesses and are building on that.”