Did you know that entrepreneurs think differently when faced with problems and opportunities? Research shows that their brains exhibit unique activity patterns associated with creativity, decision-making, and flexibility. As a result, they tend to be less inhibited and make decisions more quickly than others — investing effort at a later stage to resolve uncertainty and ambiguity.In a similar way, it might be time for community financial institutions (CFIs) to think differently about how they attract, support, and empower the next generation of entrepreneurs. More so than any generation before them, Gen Zers (born in the late 1990s through the early 2010s) are choosing entrepreneurship over the traditional “9-5” or corporate career path. In fact, research suggests that 50% of Gen Z want to start their own business, and 48% say they have a side hustle. Almost 1 in 5 business founders in 2024 were Generation Z. What’s more, these aren’t just sole traders — of those Gen Zers who are already running their own businesses, 39% have five or more employees. This presents a significant opportunity for financial institutions: Gen Z entrepreneurs are not only the business customers of tomorrow, but they are also potential customers of today, too. So, what drives this new generation of business owners, and how can CFIs position themselves to become their trusted financial partners?Understanding Gen Z’s Entrepreneurial DriveAs more Gen Zers reach working age, they are increasingly reshaping the landscape with their attitudes, values, and expectations. This generation is motivated by:
- Independence and flexibility. “Being my own boss” and having “scheduling flexibility” were the top two indicators of success in a study of Gen Zers running their own business.
- Balancing work and life. In one study, achieving a good work-life balance was rated as a key priority for 50% of Gen Z, alongside career growth and skills development.
- A sense of purpose and the opportunity to create meaningful impact. Nearly 9 in 10 Gen Zers say purpose drives their job satisfaction, and 40% define success as making a positive impact in their community and beyond. Many choose to pursue ventures that have a social or environmental impact.
- Achieving job security. In contrast to previous generations, many Gen Zers regard having their own business as a way to achieve job security in an unpredictable economic environment.
In addition, this digitally-native generation makes the most of the accessibility and relative ease of entry to business ownership provided by digital and social media platforms, with 80% either starting a business online or starting a business with a mobile component.While the ambitions of Gen Z are high, the practicalities of starting a business remain — and CFIs are well placed to help these businesses of the future. Many report that the biggest barriers they face are not having enough money (39%) or knowledge to start (29%). In fact, 45% of Gen Z business owners are using their personal savings to fund their businesses. A lack of financial experience is also evident, with 94% of Gen Z business owners saying they do not feel well-equipped to handle financial tasks. Five Ways CFIs Can Attract Gen Z EntrepreneursGen Z is values-driven, tech-savvy, and community-oriented: all strengths CFIs can leverage and appeal to. Here are five suggestions to help CFIs attract this younger group of entrepreneurs and business owners
- Offer startup-friendly financing options. Traditional bank loans don’t often meet the needs of early-stage entrepreneurs, who cite financing and cash flow as major hurdles. CFIs can fill this gap with microloans, flexible funding options tailored to business growth, fast approvals, and personalized support.
- Provide “beyond banking” support. Gen Z entrepreneurs want more than just funding — they’re seeking guidance, mentorship, and a sense of community. CFIs can help by hosting local events, connecting them with experienced business owners, and offering perks like coworking space memberships to help foster a thriving entrepreneurial ecosystem.
- Offer accessible and engaging financial education. This generation is eager to improve their financial skills and confidence. CFIs can support them by offering engaging, shareable financial content, hosting workshops on key money topics, and providing online coaching with advisors who understand the realities of starting and growing a business.
- Provide a strong digital banking offering. A strong digital banking experience is essential to meet Gen Z’s expectations. CFIs should provide seamless payment and ecommerce integrations, location-based rewards for supporting local businesses, and digital tools that help entrepreneurs manage their cash flow, accounts, invoicing, and more.
- Champion local initiatives. To resonate with Gen Z, CFIs should align with the causes they care about. This could include sponsoring local events focused on sustainability and inclusion, partnering with purpose-driven local businesses, and launching programs that spotlight positive community impact.
By leveraging their strengths and appealing to the specific needs and values of a new generation of entrepreneurs, CFIs have a valuable opportunity to attract, empower, and partner with the business leaders of the future.
