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It is no secret that the coronavirus pandemic has uprooted and reshaped the world of business. In the past twelve months, people have been unable to find work in industries they have decades of experience in. Careers have stalled, and firms thriving pre-pandemic have been forced to rethink their entire way of operating.

It’s been an incredibly difficult year, but out of the coronavirus chaos comes a generation of exciting entrepreneurs leading a new business boom – what some are calling covid-preneurs.

The rise of the lockdown-preneur

Whilst the 31-40 age group are still most likely to set out as sole traders, and have been for the past five years, the most significant level of new business growth is among 16–20-year-olds. The literal age of entrepreneurialism is decreasing rapidly.

Who are the lockdown-preneurs?

Since 1st February 2017, there has been a 206% increase in 16-20-year-olds registering as sole traders, showing the ambitious nature of Gen Z. Today, those under 30 account for four in 10 new businesses, versus 30% of new businesses three years ago.

Sole-trader age when starting a business (as a percentage of the total for that year)

Business started 16-20 21-30 31-40 41-50 51-60 61-70 71+
1 Feb 2020 – 31 Jan 2021 3.9% 35.3% 35.5% 16.4% 7.7% 1.1% 0.1%
1 Feb 2019 – 31 Jan 2020 2% 31.9% 39.0% 16.57% 9.0% 1.5% 0%
1 Feb 2018 – 31 Jan 2019 1.7% 33.3% 34.4% 20.0% 8.4% 1.5% 0.1%
1 Feb 2017 – 31 Jan 2018 1.9% 31.6% 35.0% 21.2% 8.3% 1.8% 0.2%
1 Feb 2016 – 31 Jan 2017 1.8% 28.2% 38% 20.8% 9.7% 1.4% 0.1%

 

In 2020, 72% more 16-20-year-olds started a business than the previous year, while all other age groups experienced fewer new businesses.

The current era of uncertainty, characterised by fewer job vacancies and the disproportionate impact on sectors which typically employ younger people, has encouraged Gen-Z to take their earning powers into their own hands.

Age of sole traders starting a business shown as a percentage change from the previous year

Business started 16-20 21-30 31-40 41-50 51-60 61-70 71+
1 Feb 2020 – 31 Jan 2021 72% -5% -22% -15% -27% -33% 0%

 

Age of sole traders starting a business shown as a percentage change between 2017 and 2021

Business started 16-20 21-30 31-40 41-50 51-60 61-70 71+
1 Feb 2017 – 31 Jan 2021 206% 72% 29% 9% 9% 14% 100%

While there are rapid shifts in the age make-up of entrepreneurs, the gender split is static with men more likely to start a business. Males make up 71% of new sole traders in total, and this is reflected in every age group. In 16-20-year-olds, women are 80% less likely to start a new business than men.

Why Gen Z is experiencing a business boom

The barriers to starting a business are lower than ever, especially for Gen-Z – the first digitally native generation. The ease of buying and selling products online, with little initial cost, is helping propel Gen-Z as a generation of entrepreneurs harnessing the power of social media to create businesses.

Social media has become a petri-dish of new business start-ups. Of the business started in 2020:

Ecommerce platform, Shopify, on which 10.6% of businesses were started, saw a 71% growth in merchants in Q2 2020. Even established businesses are looking for ways to ramp up their online and eCommerce activities.

 

Startup business accountancy services

Where start-ups are starting

Last year, almost half a million (468,371) new businesses were registered in the UK, with retail, management consultancy and real estate making up the top three most popular start-up sectors. London, Birmingham, and Manchester are home to the highest proportions of 2020 start-ups.

Most popular start-up sectors

Most popular start-up sectors

Top UK cities for new business registrations

Infographic explaining your eligibility to use postponed accounting
  1. London: 26.3%
  2. Birmingham: 2.3%
  3. Manchester: 2.1%
  4. Glasgow: 1.3%
  5. Leicester: 1.2%
  6. Leeds: 1.1%
  7. Bristol: 1.0%
  8. Liverpool: 1.0%
  9. Nottingham: 0.8%
  10. Ilford: 0.7%

Learn more about our online accounting services for start-up businesses. Talk to the team on 020 3355 4047, or grab an instant quote online

About The Author

Elizabeth Hughes

A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible.

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The rise of the Lockdown-preneur – Gen-Z behind almost 350 new IT consultancies · EMSNow
24th February 2021 10:57 pm

[…] to new data, the Covid-19 pandemic has propelled enterprising Gen-Z’s into starting almost 350 new IT […]

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