Exploring Generational Differences among Small Businesses Owners

Panelists and Hosts

• Carol Roth (host) introduced the Small Business Social Series hosted by Bank of America.
• Rob Hilsen (Bank of America Small Business Executive) emphasized local networking through Chambers of Commerce and the bank's mentorship support for women via the Tory Burch Foundation.
• Steve Strauss (USA Today columnist) highlighted that mentorship requires assertiveness and that both parties must derive value.
• Dan Schaubel (Generational Expert) noted that individuals must invest in themselves before expecting others to invest in them.

Co-Mentorship Dynamics

• Millennials can add value to Boomer-led businesses by identifying and leveraging new technologies to drive growth.
• Boomers provide value to younger generations by advising on risk avoidance, fundraising strategies, and long-term success tips.
• Advisory boards should ideally include mixed generations to prevent repeated mistakes and access diverse customer bases.
• Older business owners should recruit younger advisors for their technological competence and access to younger consumer markets.
• Successful mentorship often begins with informal interactions, such as taking experienced contacts to lunch, leading to formal advisory or board roles.

Financials and Credit Availability

• Millennial Credit Gaps: Millennials are less established in business (typically less than five years), making credit history a primary concern for lenders.
• Credit Building Strategy:
  • Small business owners must establish business credit separate from personal credit.
  • Millennials often lack personal credit history; 41% reported having no personal credit card, while 78% actively use debit cards.
  • Lenders prioritize cash flow and track records; simply having a card open is insufficient without responsible usage.
• Funding Priorities: Most businesses, regardless of generation, prioritize personal funds, followed by family/friends, venture capital, and finally banks.
• Funding Sources by Generation:
  • Millennials are nearly five times more likely than Gen Xers to receive funding from peer-to-peer networks.
  • Older generations tend to prefer traditional lending due to familiarity and risk aversion regarding unregulated lenders.
• Banking Relationships: Business owners should build relationships with bankers early in their lifecycle to vet plans and understand future financing requirements, rather than waiting until credit is needed.

Technology Adoption and Advantage

• Technology has largely leveled the playing field, allowing small businesses to compete with large enterprises via web presence.
• Millennials and Gen Xers rate themselves as more tech-savvy, with higher adoption rates of tablets and cloud-based solutions.
• Boomers hold a distinct advantage on LinkedIn for business development and professional networking.
• Millennials dominate usage of Facebook, Snapchat, and Instagram, making them critical for younger customer acquisition.
• Steve Strauss noted a "lag time" for Boomers in mobile search adoption compared to younger generations.

Hiring and Workforce Management

• Generational Self-Identification:
  • Millennials identify as "confident and creative."
  • Boomers and Gen Xers identify as "hardworking and dedicated."
• Millennial Motivations:
  • Require meaningful work, transparent leadership, and a casual, fun environment (e.g., flexibility vs. suits).
  • Value free-flowing information and results-driven cultures.
  • Leverage social networks (average 700 Facebook friends) for crowdfunding and networking.
• Boomer Motivations: Primarily seek job security.
• Gen X/Gen Y Motivations: Seek transferable skills, growth opportunities, training, and compensation.
• Management Strategy: Owners must identify individual motivations; offering a suite of benefits (flex time, medical, retirement) is more effective than personalizing for every individual.

Alternative Lending and Diversification

• Non-traditional funding sources now include crowdfunding, factoring, microfinance, and business plan competitions.
• Banks can act as conduits to community development financial institutions (CDFIs) and alternative lenders if they cannot provide direct capital.
• Older generations can guide Millennials on pitching and relationship building, while Millennials can assist older generations with technology and crowdfunding mechanics.

Forward-Looking Statements and Final Takeaways

• Dan Schaubel: Business is too unpredictable to be overconfident; owners should drop their ego and learn quickly from other generations to avoid past mistakes.
• Steve Strauss: Entrepreneurs should avoid reinventing the wheel and instead create multiple profit centers (e.g., selling beans, lattes, and merchandise) to ensure long-term stability.
• Rob Hilsen: Mutual learning is essential; Boomers must seek Millennials for tech and market access, while younger owners must seek Boomers for experience and mentorship.