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OneFamily

Teenage entrepreneurship spikes since the start of the pandemic

Posted in: Corporate

  • The number of UK ‘teentrepreneurs’ setting up a company has increased by a fifth (19%) during the pandemic
  • Rise in teen startups driven by new tech companies, creative industries, or companies specialising in wellbeing and beauty
  • One in four (25%) teenagers are thinking of starting their own business in the future
  • Most teens aspire to Bill Gates, Steve Jobs, Elon Musk, Kylie Jenner and Karren Brady.

Adult responsibilities might not be on their to-do list yet, but a new generation of ‘teentrepreneurs’ are starting up businesses as a legacy of the pandemic.

This is according to financial services provider OneFamily, who are experts in child and young adult savings. The downtime experienced during the pandemic seemingly boosted teenage entrepreneurship, with an increase of 19% in the number of businesses opened by this age group1.

According to a Freedom of Information (FOI) request issued to Companies House, 10,264 UK teenagers (aged 16-19) have set up their own companies since the start of the pandemic, with 3,486 of these already registered in 2021 as at the end of July.  In 2020 the number of businesses with teenagers as company directors was 44% higher than ten years ago.2    

Meanwhile, a further one in four teens (25%) report that they would like to start a business. However, there are still challenges since over four in ten (42%) say that they do not have the money for the initial investment needed.

But all teens born between 1 September 2002 and 1 January 2011 have a child trust fund, and an average of just over £2,200 is held in these accounts. Paul Bridgwater, Head of Investments at OneFamily, said:

“While money put aside in a junior ISA or child trust fund is often earmarked for early life expenses, such as a driving lessons, it could also be used as a springboard for a young person to follow their passion and start up a small business. Running a business is a very hands-on way to learn about responsible money management and can also generate income that could be reinvested for their future.”

The most popular sectors of youth-run businesses are technology based (22%), design or creative (17%) and food or drink (15%). Meanwhile, wellbeing, fitness and beauty all saw an equal level of interest (12%).

The upward trend for entrepreneurship looks likely to continue. A quarter of teenagers (25%) say they are thinking of starting their own business in the future. More than one in four (28%) also consider themselves creative and say that they have unique ideas.

The freedom of having their own business is the biggest factor that appeals to budding entrepreneurs, with over half (53%) citing this as the main motivation to start a company. Following their passion and working on something they’re truly interested in is also at the top of the list (31%) for teens, followed by earning good money (29%) and turning their hobby into a business (28%).

Today’s young people are inspired by role models such as Microsoft founder Bill Gates (28%), Apple Founder Steve Jobs (27%), Tesla/SpaceX Founder Elon Musk (24%), Amazon Founder Jeff Bezos (21%), media personality and founder of Kylie Cosmetics, Kylie Jenner (15%) and West Ham CEO Karren Brady (13%).

Paul Bridgwater, Head of Investments at OneFamily, adds:

“Generation Z clearly has a strong entrepreneurial streak and having time on their hands during the pandemic acted as a catalyst for this group to bring their business ideas to life. With many more also showing an interest in owning a start-up in the coming years, the future of UK business is in good hands.

Top 10 entrepreneurs teens are inspired by
1 Bill Gates (Microsoft) 28%
2 Steve Jobs (Apple) 27%
3 Elon Musk (Tesla/SpaceX) 24%
4 Jeff Bezos (Amazon) 21%
5 Mark Zuckerberg (Facebook) 20%
6 Sir Alan Sugar (Amstrad/Other) 18%
7 Richard Branson (Virgin) 16%
8 Kylie Jenner (Kylie Cosmetics) 15%
9 James Dyson (Dyson) 14%
10 Karren Brady (CEO West Ham Utd) 13%

Notes to editors

1. In 2020 there were 6,796 companies registered by people aged 16-19, compared to 5,729 in 2019. That is an increase of 18.6%, rounded up to 19%.

2. Taking the most recent entire year, 2020, there were 6,796 companies registered by teenagers (16-19) by the end of that year. Compared to the start of the previous decade (2011), where the number of companies registered stood at 4,708, this is an increase of 44%.

Methodology

OneFamily issued an FOI request to Companies House. The FOI request and supporting data can be seen in full below:

1. How many companies have ‘directors’ (active or inactive) born between 19/07/2002 and 19/07/2005? – 11836 companies.

2. How many companies have active ‘directors’ born between 19/07/2002 and 19/07/2005? – 10358 companies.

3. How many of companies were first registered:

  • in 2021 by ‘directors’ born between 19/07/2002 and 19/07/2005 – 3468
  • in 2020 by ‘directors’ born between 19/07/2001 and 19/07/2004 – 6796
  • in 2019 by ‘directors’ born between 19/07/2000 and 19/07/2003 – 5729
  • in 2018 by ‘directors’ born between 19/07/1999 and 19/07/2002 – 5354
  • in 2017 by ‘directors’ born between 19/07/1998 and 19/07/2001 – 5303
  • in 2016 by ‘directors’ born between 19/07/1997 and 19/07/2000 – 5425
  • in 2015 by ‘directors’ born between 19/07/1996 and 19/07/1999 – 5196
  • in 2014 by ‘directors’ born between 19/07/1995 and 19/07/1998 – 5380
  • in 2013 by ‘directors’ born between 19/07/1994 and 19/07/1997 – 4542
  • in 2012 by ‘directors’ born between 19/07/1993 and 19/07/1996 – 4769
  • in 2011 by ‘directors’ born between 19/07/1992 and 19/07/1995 – 4708

4. How many of the companies considered in the question above are still active for each year from 2011 to 2021?

  • in 2021 by ‘directors’ born between 19/07/2002 and 19/07/2005 – 3403
  • in 2020 by ‘directors’ born between 19/07/2001 and 19/07/2004 – 6187
  • in 2019 by ‘directors’ born between 19/07/2000 and 19/07/2003 – 3500
  • in 2018 by ‘directors’ born between 19/07/1999 and 19/07/2002 – 2610
  • in 2017 by ‘directors’ born between 19/07/1998 and 19/07/2001 – 2339
  • in 2016 by ‘directors’ born between 19/07/1997 and 19/07/2000 – 2223
  • in 2015 by ‘directors’ born between 19/07/1996 and 19/07/1999 – 2351
  • in 2014 by ‘directors’ born between 19/07/1995 and 19/07/1998 – 2522
  • in 2013 by ‘directors’ born between 19/07/1994 and 19/07/1997 – 1844
  • in 2012 by ‘directors’ born between 19/07/1993 and 19/07/1996 – 1883
  • in 2011 by ‘directors’ born between 19/07/1992 and 19/07/1995 – 2019

5. How many ‘directors’ born between 19/07/2002 and 19/07/2005 are currently registered as a ‘director’ with more than one company? – 724 directors.

6. For companies with ‘directors’ born between 19/07/2002 and 19/07/2005, what is the most common sector named under the label ‘nature of business’? – Retail sale via mail order houses or via Internet – 870 companies.

OneFamily also commissioned Opinium to undertake market research amongst 1,000 UK teens aged 13-19. The data included quotas by age and gender and was weighted to be nationally representative. The research was conducted between 29th January – 1st February 2021.