MORE aspiring Gen Z entrepreneurs are launching their own businesses at scale, new data reveals, as technology and specifically AI democratise entrepreneurship.
But experts caution that many of the businesses being formed, whether as a side hustle or a sole focus, will go bust — and that the trend may be an indictment of the current jobs market as much as an inspiring view of the future.
Data from Your Company Formations says that more than one in ten of the company directors who have registered through them so far this year are under 25 and, for the first time, under-25s are starting companies at the same rate as their share of the adult population.
The figures, drawn from over 10,000 director records held by Your Company Formations since the start of 2026, show that 10.6% of directors registered between January and August 2026 were under 25, up from 8.4% in the years before the pandemic.
The data shows that many Gen Z entrepreneurs are registering businesses linked to clothing, e-commerce, beauty and digital, and that a third of under-25s give their company a one-word name.
Additionally, it found that young founders are more likely to start their business outside the 9-5, whether that’s due to side hustling around a job or an impulsive decision in the evening.
Under-25s are almost twice as likely as the over-65s to register their business between the hours of 10pm and 6am, and are more likely to start their business on a weekend.
Robert Engeham, Founder at Your Company Formations, said: “For ten years and for hundreds of thousands of customers, the typical person starting a company with us has been in their late thirties, but now starting a company has stopped being something you do at a particular age.
“Younger people these days are founding at the same rate as everyone else, and Gen Z is creating a business boom.
“They’re building studios, clothing brands and e-commerce stores, often at 11 pm on a Sunday, around another job. It’s a sign that side hustle culture is booming.”
Amelia Brooke, Career Coach at Amelia Brooke Career Vision, said she isn’t surprised by the findings and that they may reflect a weak and uncertain jobs market.
She added: “With businesses reducing entry-level roles and offshoring entire departments, it makes sense to explore entrepreneurship.
“That said, I do wonder how many of these registrations are essentially CV gap fillers.
“Setting up a limited company as a consultancy or agency is a classic CV gap-cover story, turning a period of unemployment into a freelance strategy consulting gig.
“Many of these businesses will likely fold or be abandoned the second the job market thaws out. We’ve all seen LinkedIn profiles where someone is suddenly ‘Founder & CEO’ for six months, then it vanishes after a decent corporate offer.
“Time will be the real judge of whether this new wave of registered companies is a strategic career filler or a genuine business venture.
“Either way, the fact that people are defaulting to creating something of their own, for however long it lasts, is an impressive and proactive move.”
Paul Denley, CEO at Oakham Wealth Management, said he applauds the ambition and that tech is a great enabler, but the reality of business formation is altogether different.
He continued: “A limited company takes ten minutes and a few pounds to register. Building a business takes years.
“Companies House counts incorporations, not trading, whereas the Office for National Statistics (ONS) only records a business creation once it appears on the VAT or PAYE register.
“Around 4 in 10 that clear that bar survive five years. Nobody publishes survival by director age, so we can’t predict how many of these clothing and beauty brands become businesses rather than Instagram shopfronts.
“Still, a laptop, some AI tools and little capital can now get an idea to market: a real democratisation of entrepreneurship.
“Some may be necessity, with youth unemployment high and entry-level roles scarce, but necessity and entrepreneurship have always been close cousins.
“I applaud the ambition: even a failed venture teaches cashflow, tax and customers faster than unanswered applications.
“For UK plc, what matters isn’t how many under-25s form companies in 2026, but how many are still trading, growing and paying their first employee in 2029.”
Astrid Davies, Founder CEO at ADCL, a leadership consultancy, works with a lot of Gen Z business owners and said “we’re seeing more and more entrepreneurs going it alone, both in their traditional professional niche or in one of the new markets that are springing up every day”.
She continued: “I have asked several of my clients about their reasons and there’s two that come out on top. First, freedom: there is a clear perception that the traditional workplace is past it and has had its day for the current group of ambitious workers.
“Even if they become embroiled in red tape, that’s by choice, not by obligation. That means everything to them.
“Second is opportunities: there simply aren’t the jobs that universities are implying are still out there. Markets are shifting with the current UK economy and it’s much tougher to get a job that suits your skills straight out of university.
“An indictment of the current market, or an inspiring future view? Personally I feel it’s a bit of both.”
Like Denley, Tony Sanchez, Founder at Bridging Loan Directory, a publisher, said “it’s encouraging that more young people are prepared to turn an idea into a company, but registration is the beginning of entrepreneurship rather than proof of a business boom”.
He added: “The more useful measures will be how many start trading, employ people and survive beyond their first few years. AI, e-commerce platforms and social media have reduced the cost and technical difficulty of testing an idea.
“A young founder can now create a brand, website, content and basic business systems without the capital or team previously required.
“Necessity may also be involved. If entry-level employment is harder to secure, starting a business or side venture becomes an alternative route into work.
“That does not make the entrepreneurial intent less genuine, but it changes how we should interpret the figures. The opportunity is lower barriers to entry. The challenge is helping young founders build durable businesses.”
Andrew Montlake, CEO at Coreco, a mortgage broker, said it’s “hugely encouraging to see so many younger people backing themselves and building something of their own”.
But he added the mortgage market has yet to properly adapt to this new way of life: “AI and technology have lowered the barriers to starting a business, but the mortgage market still finds PAYE income far easier to understand than a Gen Z entrepreneur with variable earnings or limited trading history.
“If this boom continues, lenders need to get better at understanding the modern world of work. Otherwise, we risk cheering young people on for creating businesses, only to tell them they do not fit neatly enough into a mortgage affordability box.”
Your Company Formations’ Engeham gave some practical tips for Gen Z business creators.
He said: “Whilst you can start a business in a weekend, it’s still important to remember to keep up to date with your requirements as a business owner, like filling out the necessary paperwork and your confirmation statements, or you could quickly fall foul of hefty fines.”
