Despite stereotypes of laziness and entitlement, millennials are entrepreneurial and ambitious — and they’re running the UK small business economy. New research by Xero, the global small business platform, has revealed that 38% of UK small business owners are under 35 and nearly half (44%) of all accounting and bookkeeping services provided to the small business market last year were provided to this age group.
Key takeaways include:
– Millennials enjoy running their businesses but have different ideas about what defines success. Success is about making more money (for 46% of millennial business owners surveyed), hiring more employees (28%) and expanding the company into new areas or markets (16%)
– Quality of life is also important — taking more holidays and being less stressed was a measure of success for 30% and 19%, respectively. Just 2% see selling their business as their goal for 2020
– 83% are confident of reaching their goals, even with the current market uncertainty around Brexit.
Millennials want more service from their accountants and bookkeepers
The Xero research revealed millennial business owners are not satisfied with their existing accountants and bookkeepers, with more than 39% of owners actively looking to replace their existing advisor in the next year. Small business owners gave their accountants and bookkeepers an average Net Promoter Score (NPS) of -3.0; among millennial business owners, the number was much worse, with an NPS score of -8.8.
Much of this dissatisfaction is due to the lack of attention and advice they receive. For younger business owners, an advisor is someone who knows their business and is truly accessible. But 23% said they rarely, if ever, receive any ideas from their advisor. Only 6.5% of advisors in the UK regularly ask their clients for feedback.
Rachael Powell, Chief Customer Office at Xero comments: “Millennial small business owners aren’t the future of the UK economy — they are operating it now. Advisors are undoubtedly the unsung heroes of small businesses across the UK, but our research shows there are areas they can improve their client relationships, especially for younger small business owners.
“This generation has higher expectations than previous generations, and they’re looking for advisors to work collaboratively with them and provide insights behind the numbers and make recommendations that have a positive impact on their business. Accountants and bookkeepers who keep in regular contact with their customers are likely to have happier clients and greater opportunities to grow their own business.”
With advisors deriving more than 80% of all new clients from word-of-mouth referrals, customer satisfaction is vital to the continued growth of accounting and bookkeeping practices. Xero recently launched an industry-first customer feedback tool giving advisors an easy way to privately collect feedback and enabling them to use the insights to build on their strengths and improve any weaknesses.
For advisors taking part in the pilot program, the new tool will survey their clients, collecting industry-standard information to help practices better understand their customer advocacy. Xero is also working to better equip and educate the industry to up-level their service standards.
Xero’s research found business owner happiness correlates strongly to their technology adoption. Those using spreadsheets and desktop accounting software were more likely to provide negative NPS for their advisors at -11.8 and -11.9, respectively, while those who used cloud accounting were much happier and more likely to recommend their advisor at +20.2.