New TD survey data reveal that Gen Z entrepreneurs increasingly want to enter e-commerce, but face sizable barriers to success.
Key takeaways:
- E-commerce focus: 1 in 4 Gen Z (25%) say they would launch an e-commerce venture using platforms like Etsy or Shopify, reflecting enthusiasm in this sector;
- Barriers to success: A significant 25% of Gen Z entrepreneurs need support with the very basics of business banking, while 33% seek direct financial support;
- An unparalleled economy: 75% of Gen Z aspire to own their own business amidst the worst youth unemployment crisis in over two decades.
Julia Kelly, VP of Small Business Banking at TD, said perhaps the biggest advantage to getting your business started on e-commerce is accessibility.
“There are many platforms that are user-friendly, especially for a generation that has grown up with so much technology. E-commerce is also more accessible when it comes to startup capital. You don’t need the funds to buy or rent a physical space, which means young entrepreneurs can be open for business that much sooner,” she said.
Kelly said the most important financial skill any business owner needs to master is cash forecasting.
“Have you mapped out when your customers or clients are paying you? When do you need to pay your suppliers? In many cases these two streams are on different schedules. This is something we can help new business owners figure out and stay on top of. There are ways you can ‘fake it ‘til you make it’ in business, but your finances cannot be one of them, she said.
“The key for financing decisions is in your business plan: you need to map out what the business is, what challenges you might face, and more importantly, how you plan on facing the unexpected. For Gen Z, they might lack the life experience to create a thorough business plan on their own.
“And they might not realize a bank like TD can help them, either through direct guidance or by connecting them with their network of other business owners who are often eager to provide mentorship and support. We can also provide guidance on government grants and bursaries, or government backed credit facilities they might be eligible to apply for, tailored to the specific industry or stage of business they are operating in.”
Kelly said the survey found financial freedom was a leading factor in their interest in entrepreneurship.
“It makes sense that if you’re struggling to find full-time employment, being your own boss seems like a good alternative. But this doesn’t mean entrepreneurship is easy. Running a business requires you to be all-in on your idea. Our survey also found Gen Z is worried their lack of experience could lead to business failure. This is where starting your business as a side hustle can ease you into business ownership, allowing you the time and space to learn the business while it brings in extra income,” she added.
“If there is one thing business owners tell us they could use more of, it is time. While we cannot create more time, there is an opportunity for banks could take on more of a mini-CFO role through API-driven banking so that business accounts, payments and tools integrate directly with their e-commerce ecosystem. With an increase in AI-powered tools to support business, there is an opportunity to bring self-serve advice and support to businesses that are relevant for their specific industry and stage of business.”
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