U.S. Bank Survey Finds Gen Z Entrepreneurs Taking Bigger Risks and Investing More Aggressively to Fuel Business Growth
America’s small business sector continues to demonstrate remarkable resilience despite ongoing economic uncertainty, rising operating costs, and persistent market challenges. While business growth has become more difficult to achieve than in previous years, entrepreneurs across the country remain committed to expanding their companies, investing in innovation, and positioning themselves for long-term success.
Those are among the key findings from the fourth annual Small Business Perspective survey released by U.S. Bank. The nationwide study surveyed 1,000 small business owners, including an additional sample of 200 Generation Z business owners, providing insight into how entrepreneurs are responding to a rapidly evolving economic environment.
The report reveals a business landscape where growth remains a priority, even as owners face mounting pressures from inflation, competitive markets, and capital constraints. Perhaps most notably, the survey highlights a generational shift in entrepreneurship, with Gen Z business owners emerging as some of the most ambitious and growth-focused leaders in the small business community.
Although fewer businesses are reporting growth compared with a year ago, the overwhelming majority of owners continue to invest in their futures. According to the survey, 91% of small business owners plan to take at least one action aimed at expanding their businesses during the next 12 months.
This determination underscores the resilience that has long characterized America’s entrepreneurial sector.
Growth Slows but Entrepreneurial Confidence Remains Strong
Small businesses continue to operate in an environment marked by economic volatility and financial uncertainty. Inflationary pressures, changing consumer spending patterns, and concerns about economic stability have created challenges for companies across industries.
These factors are reflected in the survey’s findings.
While most owners still describe their businesses as successful, several key indicators show that growth has become more difficult to achieve.
Approximately 87% of respondents reported that their businesses are successful, a decline from 96% reported in the previous year’s survey.
Similarly, only 68% reported experiencing business growth over the past year, compared with 88% in the prior survey period.
Business optimism also softened, with 83% expressing confidence about the coming year, down from 93% previously.
Despite these declines, the results suggest that entrepreneurs are adapting rather than retreating.
Instead of reducing investments or postponing growth plans, many owners are actively pursuing opportunities to strengthen their businesses.
The survey found that:
- 91% plan at least one growth initiative.
- 60% expect to hire additional employees.
- 56% intend to invest additional capital into their businesses.
- 46% plan to introduce new products or services.
These figures indicate that while economic conditions may be challenging, business owners remain focused on expansion and long-term sustainability.
According to Shruti Patel, Chief Product Officer for Business Banking at U.S. Bank, the findings demonstrate the determination of small business owners to continue building despite economic headwinds.
Patel noted that although growth is not as widespread as it was a year ago, entrepreneurs remain committed to pursuing opportunities that will help strengthen their businesses and create future success.
Gen Z Entrepreneurs Are Reshaping Business Ownership
One of the most significant insights from the report is the growing influence of Generation Z within the small business community.
With more than half of current U.S. business owners now over the age of 55, younger entrepreneurs are increasingly becoming the next generation of business leaders.
The survey suggests that Gen Z owners are approaching entrepreneurship differently from previous generations.
Rather than adopting a cautious growth strategy, many younger entrepreneurs appear willing to take calculated risks to accelerate expansion.
According to the research, 24% of Gen Z owners reported pursuing bold growth opportunities designed to rapidly scale their businesses.
By comparison, only 21% of Millennials and just 13% of Gen X and Baby Boomer owners reported taking a similar approach.
This willingness to embrace growth opportunities appears to be producing results.
Nearly three-quarters (74%) of Gen Z business owners reported growth during the past year.
Even more impressive, 47% reported significant growth, outperforming every other generation included in the survey.
These results suggest that younger entrepreneurs may be finding new ways to identify opportunities, connect with customers, and leverage technology to expand more quickly.
Passion Projects and Side Hustles Drive New Ventures
The survey also highlights how Gen Z entrepreneurs are entering business ownership through different pathways than previous generations.
Historically, many entrepreneurs acquired existing businesses or built companies after years of professional experience.
By contrast, younger owners are increasingly launching ventures based on personal interests, creative ideas, or side projects.
Approximately 63% of Gen Z business owners said their companies originated from passion projects.
Meanwhile, nearly half (49%) reported that their businesses began as side hustles before evolving into full-time enterprises.
This entrepreneurial pathway reflects broader changes in how younger generations approach careers and income generation.
Advances in digital technology, social media, e-commerce platforms, and remote work opportunities have lowered barriers to entry, allowing aspiring entrepreneurs to launch businesses with relatively modest initial investments.
As a result, many Gen Z owners are creating businesses around personal interests, specialized skills, or niche market opportunities.
Personal Sacrifices Accompany Entrepreneurial Ambition
While the growth achievements of Gen Z entrepreneurs are noteworthy, the survey also reveals the personal sacrifices many younger business owners are making.
Building a business from the ground up often requires significant financial and personal commitment.
Among Gen Z owners:
- 30% reported delaying homeownership.
- 25% postponed having children.
- 21% delayed marriage.
These findings illustrate the tradeoffs that often accompany entrepreneurship, particularly for younger individuals who are still establishing financial stability.
Many entrepreneurs view these sacrifices as necessary investments in the future success of their businesses.
However, the survey suggests that balancing personal goals with business ambitions remains a significant challenge.
Financial Pressure Remains Significant
Despite their growth-oriented mindset, many Gen Z entrepreneurs continue to face financial vulnerabilities.
The survey found that approximately 38% of Gen Z-owned businesses generate less than $100,000 in annual revenue.
Additionally, 87% said that a three-month decline in revenue would directly affect their personal finances.
These statistics highlight the close connection between business performance and personal financial wellbeing for many small business owners.
Unlike large corporations with substantial financial reserves, many entrepreneurs rely heavily on business income to support their households.
As a result, economic disruptions can have immediate consequences.
The findings underscore both the opportunities and risks associated with entrepreneurship, particularly for younger business owners who are still building scale and stability.
Economic Challenges Continue to Test Small Businesses
The survey identified several factors that continue to place pressure on business owners across all generations.
Among respondents:
- 90% cited broader economic conditions as a challenge.
- 88% pointed to inflation and rising costs.
- 82% identified competitive pressures.
- 71% reported difficulties related to accessing capital.
These concerns reflect a business environment where managing expenses and maintaining profitability require constant attention.
Higher operating costs have affected nearly every aspect of business operations, from labor and inventory to transportation and technology investments.
At the same time, access to financing remains a critical issue for many small businesses seeking to fund expansion or manage cash flow.
Despite these obstacles, relatively few owners are considering exiting their businesses.
Only 3% reported plans to sell their companies within the next year, indicating that most remain committed to long-term growth.
Growing Businesses Show Distinct Advantages
The survey revealed notable differences between businesses that are growing and those that are struggling.
Companies experiencing growth were generally less likely to report severe economic pressures.
Compared with non-growing businesses, growth-oriented companies were:
- Less concerned about economic conditions.
- Less affected by changing consumer spending habits.
- More confident in accessing capital.
Perhaps most importantly, growing businesses were significantly more likely to embrace emerging technologies.
This suggests that innovation and adaptability may be important factors contributing to business success.
Artificial Intelligence Becomes a Core Business Tool
One of the strongest trends identified in the survey is the rapid adoption of generative artificial intelligence.
Approximately 75% of small business owners now report using AI within their organizations.
Business owners are leveraging AI for a wide range of functions, including:
- Marketing and sales activities (56%)
- Data analysis (51%)
- Content creation (51%)
- Process automation (44%)
The overwhelming majority of AI users report positive outcomes.
Among businesses utilizing AI:
- 98% reported positive impacts.
- 89% said AI delivers measurable business value.
- 84% reported cost savings.
These findings suggest that AI is becoming an increasingly important tool for enhancing productivity and operational efficiency.
Challenges Remain Despite AI Benefits
Although AI adoption continues to rise, not all business owners have embraced the technology.
Approximately one-quarter of respondents reported no AI usage whatsoever.
Among non-users, common concerns included:
- Uncertainty regarding return on investment.
- Questions about relevance to their business.
- Concerns regarding trust and reliability.
Even among AI adopters, enthusiasm is not universal.
More than half (53%) reported experiencing some negative impacts associated with AI, including increased complexity and unrealistic expectations surrounding technology capabilities.
These findings suggest that while AI adoption is expanding rapidly, businesses continue to navigate the practical realities of implementation.
Technology Investments Focus on Simplicity and Efficiency
Beyond artificial intelligence, business owners are increasingly investing in technologies designed to streamline operations and reduce administrative burdens.
Popular tools include:
- Payment processing systems (60%)
- Digital payment platforms (53%)
- Accounts payable and receivable solutions (53%)
As businesses evaluate new technologies, predictable pricing has become a major consideration.
The survey found that:
- 92% prefer solutions with transparent and consistent fees.
- 78% say fees influence payment decisions.
- 65% identify fees as a major frustration.
At the same time, 83% indicated they are willing to pay fees if those costs provide meaningful convenience and value.
This reflects a growing emphasis on efficiency and cost management within small business operations.
Expectations for Financial Partners Continue to Evolve
Business owners increasingly expect financial institutions to provide more than traditional banking services.
Respondents identified several essential features they seek from banking partners:
- Human support and guidance (91%)
- Mobile banking access (90%)
- Fraud protection capabilities (88%)
These expectations reflect the growing complexity of running a business in a digital economy.
Entrepreneurs want financial partners that combine technology, security, and personalized support.
Digital Currency Adoption May Accelerate
The survey also explored attitudes toward emerging forms of digital currency.
While only 28% of business owners currently accept digital currencies such as cryptocurrencies, stablecoins, or tokenized deposits as online payment methods, interest is growing.
Among businesses that do not currently accept digital currencies, 53% said they would likely do so within the next five years.
This suggests that digital payment ecosystems may play a larger role in future business transactions as technology adoption continues to evolve.
The 2026 U.S. Bank Small Business Perspective survey paints a picture of an entrepreneurial community that remains optimistic despite facing significant challenges.
While economic uncertainty, inflation, and access-to-capital concerns continue to pressure business owners, the overwhelming majority remain focused on growth.
The survey also highlights the growing influence of Generation Z entrepreneurs, whose willingness to embrace calculated risks, invest aggressively, and leverage technology is helping redefine modern business ownership.
As the next generation of entrepreneurs assumes a larger role in the economy, their growth-oriented mindset, digital fluency, and willingness to innovate may become increasingly important drivers of small business success.
Ultimately, the findings reinforce a central theme: even in a challenging economic environment, America’s small business owners remain committed to building, innovating, and creating opportunities for the future.
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