COVID-19 and the Millennial Entrepreneur: Recovery and Building for the Second Wave
Over the last few years, millennials have become a major growth engine for Canada’s small business economy. While this demographic has often been characterized as lazy and entitled, our team conducted research that found millennials have started two in five new small businesses in Canada over the last two years.
The research also reveals millennials currently own and operate 21% of all small businesses across the country. The picture of the modern small business is quickly changing in Canada, and millennial business owners present a significant growth opportunity for Canadian accounting professionals.
However, the findings also reveal younger small business owners aren’t necessarily satisfied with their advisors. With half of those surveyed saying they’re likely or very likely to look at replacing their existing accountant or bookkeeper in the next year. One third (33%) of the entrepreneurs surveyed said they receive insights from their advisor twice a year at most, and in their view, this is not enough.
Entrepreneurs face a number of challenges running their business. With the COVID-19 pandemic, the large majority of millennial business owners in Canada are experiencing their first major financial crisis. As they weather the storm and embark on recovery, Canada’s ecosystem of accountants and bookkeepers have a clear opportunity to become true advisors and mentors to this new generation of small businesses.
Here are three ways Canadian accounting professionals can support and effectively serve millennial business owners through COVID-19, and beyond:
Reconsider cloud technology to manage finances
Despite being deemed the most tech-savvy of all previous generations, our research found that only 7% of millennial business owners use cloud-based technology to manage their finances. In particular, COVID-19 has shown businesses the importance of having accurate financial records so you can make informed decisions about your business. Using cloud-based tools like Xero to automate finances and accounting can help show what the health of your business looks like now or several weeks into the future.
Adopt a mindset shift
Over the last few months, many millennial business owners have probably experienced shifting the focus of their business from growth to survival and back to growth again. However, business owners don’t have to choose one path over the other. In fact, they should be prepared to manage both growth and survival especially with COVID-19’s inevitable second wave.
Now is the time to help your clients adopt this mindset shift so they can take the necessary steps to evaluate their business model, preserve capital, or get a grasp on their cash flow. As newer business owners, millennials are in a good position to adapt their business since they’re not tied to doing things the same way year after year. Advisors can help millennial businesses see the opportunities that will help them not just survive, but thrive during future times of economic hardship.
Focus on relationships
For advisors to demonstrate their value, retain and grow their base of millennial clients, I believe it always comes down to relationships. Take the time to truly understand your client’s goals — both personally and professionally. Listen to them, become a sounding board, and provide advice when it’s needed.
As advisors, we can recommend technologies, workflows or how to best automate processes, which will all work behind the scenes. But, it’s the human-to-human connection that is hard to replace. The single thing to focus on with millennial clients is the art of conversation, listening and engaging because that’s what forms the heart and core of a strong relationship between client and advisor.
For more information on Xero’s findings about millennial business owners in Canada, download the full report here. Millennial business owners in Canada can also access additional COVID-19 resources on what government support to access, learning new skills, taking your business online and more.
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Source: Xero Blog