Younger generations such as Millennials and Gen Z are quickly becoming the dominant force in the small business landscape of Australia, accounting for 63.3 percent of new business accounts opened at Commonwealth Bank (CBA) in 2023. The number of new business accounts at CBA grew by 10.4 percent from 2022, with millennials responsible for 48.5 percent and Gen Z opening another 14.8 percent. Women opened 43.2 percent of all accounts.
A strong motivation for starting new businesses is the desire for additional income, with around 51 percent citing this as the reason, while 23 percent are pursuing career independence and control. According to Small Business Banking Manager Rebecca Warren, younger Australians are eager to create something that is theirs and want to take control of their career futures. She also observed that young people today are finding unique ways to market their businesses and attract customers.
The study showed that while women were more motivated to start small businesses for the need of more income, men were more likely to do so because they saw a gap in the market. The most common types of startups were online businesses, reflecting Gen Zās unique approach to business in a fast-paced, digital world.
However, small business owners faced several challenges, with the top ones being finding and retaining customers, followed by needing more time to run the business. Mr. Tubman pointed out the effect of climbing interest rates on the spending habits of older Australians, who are more likely to own their homes and have savings buffers. Conversely, younger Australians are cutting back on spending on products to fund travel and experiences.