Entrepreneurial Gen Z to reshape the workplace
Originally posted by William McInnes @ afr.com
Armed with a professional-looking website in place of a store front and a social media account in place of traditional advertising, young entrepreneurs like Kevin Kaluarachchi are starting low-cost businesses with more ease than ever before.
The 20-year-old commerce student has taken his passion for sneaker culture and transformed it into a business, selling high-end shoes and apparel through his website Dollar Flex Club.
"When I started out, it was small. I'd line up for a whole night to buy a pair of shoes," he says. "At the start, I was selling on Gumtree and it was really small scale. I wasn't looking to make money, I was just fulfilling my own passion. It was more pocket money in a way."
The digital revolution means it is cheaper than ever before to start a small business. For Kaluarachchi and his Generation Z peers – those aged 18-25 – that means running a venture on the side of work or study is not just possible, it's increasingly common. And now as they join the workforce, a whole cohort of entrepreneurs who have been turning their passions to profit since high school will bring a level of business savvy their predecessors have often been severely lacking.
Kaluarachchi has more than 90,000 products sitting in inventory in his apartment with the most expensive item being an $1800 Supreme X Louis Vuitton T-shirt. He made $30,000 in revenue in the last quarter but said most of the money is being put back into the business.
"The whole website, over time it's grown more and more," he says. "I started noticing the upside and potential in an industry like this. I'm studying business at Melbourne University and [the business] is helping to consolidate my knowledge at uni.
"It's a small project at the moment but it's moving from a hobby to something we can transition into a business. We're still growing and looking to expand our reach."
Kaluarachchi is just one of many of his generation looking to create a business using social media. A 2016 NAB report showed that 44 per cent of Gen Z's believe having their own business was the best pathway to success while 49 per cent believe that a social media based business is the best way to go.
NAB chief customer officer for business and private banking Anthony Healy says Gen Z is particularly focused on being independent.
"We know the small to medium [SME] business sector in Australia is incredibly dynamic. They're agile and focused on innovation and growth," he says.
"Millennial or Gen Z business owners are particularly so. Sixty-six per cent of them intend to grow and expand their business in the next three years according to our research. I think there is a strong need for independence with this generation and a new awareness, particularly with digital technology, that new and attractive business models are emerging. Twenty-three per cent of Millennial SMEs are online-only businesses."
Marketing student Tania Bayat founded her small business potnotnot earlier this year with her brother Tomaj Bayat and friend Leila Tarakjian. The trio are selling small succulents and cacti through a website, and advertising their products through an Instagram account.
Tania Bayat's potnotpot business sells succulents and cacti. Supplied
"We get orders, I do the packing and then pretty much distribute from there," the 22-year-old says. "We're still trying to sort out our shipping. We've been putting in the hard yards to get things delivered ourselves. I've literally been driving to people's houses.
"It's still early stages and it's a lot of work with uni and a part-time job but you make it work. If you have the passion you'll 100 per cent put in the work."
She and her brother had been keen on starting a business and targeted a niche.
"My brother was thinking about how he has his own plants and how it's really important to have greenery, especially when you're living with other people," she says.
"It's really important, the aesthetic of a room, it's really in at the moment and there's no online platform for it either. We just really wanted to start something that could be marketed through social media."
Both Kaluarachchi and Bayat are looking to turn their respective "side hustles" into full-time businesses after university.
"In the future, we want it to be a big player in the game," says Kaluarachchi. "On the global scale, we're quite small. For us, we want to conquer Australia and then take it global."
Bayat say she is hoping to grow her business' customer base and collaborate with artists to create unique designs for her pots.
But even if they fail, as many start-ups do, or even if these mini-ventures were never meant to be built into large businesses, those Gen Z's who have slogged away at side hustles will enter their careers with a greater understanding of how business works. That could fundamentally reshape the workforce.
"There is no doubt that you need a range of skills to start and run a successful business," says NAB's Healy. "You need management skills, interpersonal skills, finance and marketing acumen. All of these capabilities are valuable in the modern workplace."