Why small businesses should care about backing young founders

Almost a million young people in the UK are not in education, employment or training. That number is up 37% between 2021 and 2024, according to the Department for Work and Pensions. 

Thousands of others are already running side hustles, freelance operations and digital-first ventures before they turn 25. Our own research shows that Gen Z demonstrates notably higher entrepreneurial intent, particularly those aged 18 to 24 (50%). They grew up on Depop, TikTok and Shopify and don't need convincing that self-employment is possible.

However, the support system around them is still mostly designed for a different question: How do we get young people into a job? 

What the government has announced 

In March, the government announced a £2.5 billion youth employment package over three years, with £1 billion of new money added to the existing Youth Guarantee.

Founder of Youbee Media and Enterprise Nation adviser, Rebecca Hopwood, said:

"From my perspective as an employer, I see huge value in giving young people that first step into the workplace, where confidence is built, standards are learnt, and real experience is gained. So I actually think the government’s focus on supporting employers to take on young people is a positive move.

"If anything, we need more businesses willing and able to invest time into developing talent properly. We also need to make it commercially viable to hire and train people with little or no experience, especially with rising employment costs.

"Entrepreneurship absolutely has its place, but in many cases, it’s better, more fun and sustainable when it’s built on experience, not instead of it."

The headline measures for employers are a £3,000 Youth Jobs Grant for hiring 18- to 24-year-olds, who have been on Universal Credit for six months, a £2,000 apprenticeship incentive for SMEs taking on apprentices aged 16 to 24, and an expansion of the Jobs Guarantee from 18-21 to 18-24. 

Our COO, Polly Dhaliwal, welcomed these measures:

"They will make a real difference to small firms deciding whether to take a chance on a young person."

What is missing 

Every headline measure helps a young person become an employee, an apprentice or a subsidised placement. None of it is designed to help a young person start a business. 

Enterprise Nation adviser, Leisa Pickles, said:

“We don’t have a shortage of young entrepreneurs; we have a shortage of practical support that helps them sell. From what I've seen working with early-stage founders, the ambition to start a business is already present. They’re quick to spot opportunities, test and learn, and change direction when needed.

“The challenge is that most government support is still built around getting young people into jobs, not helping them build businesses. What founders actually need is access to customers, buyers and real-world opportunities to prove demand. That’s what builds confidence and, ultimately, sustainable businesses.”

That matters because plenty of them are trying. The barriers they face are different from those of getting a job, such as access to finance, customer trust, confidence, business skills, and the administration of running a company for the first time. 

Employer hiring incentives do not touch any of that. 

What exists for young founders today 

There are routes, but they are thinner than the employment offer. 

The King's Trust Enterprise Programme supports 18 to 30-year-olds with training, mentoring, grants and start-up funding. It is a charity programme, not a government one.

The British Business Bank's Start Up Loans offer personal loans of up to £25,000 at a fixed interest rate of 7.5% from 6 April 2026, with 12 months of free mentoring. They are age-neutral, but a meaningful share of recipients are under 25. 

Between them, they reach thousands of young people a year. Useful, but modest next to £2.5 billion on the employment side. 

Read more: A guide to funding and support for young entrepreneurs

What we have called for 

Rebecca pointed out:

"The reality is that many young people haven’t yet had the opportunity to develop the fundamentals that come from being in a workplace, like how to communicate effectively, how to sell, how to handle feedback, how to work as part of a team, and what 'good' actually looks like in a real business environment.

"Without that grounding, we risk encouraging people to go straight into self-employment without the skills, resilience or commercial awareness needed to make it work. That doesn’t just affect the individual; it can lead to a more fragmented market with lower standards, and ultimately, more people struggling to build viable businesses."

Enterprise Nation has thus argued that the UK should embed enterprise education across the curriculum, most recently in our 2025 autumn budget submission. 

Every young person should leave school having had at least one structured encounter with how a business works, how to spot a customer problem, test an idea, price a product, handle money, and deal with risk. 

This does not need a new agency or fund. It means using the existing curriculum, bringing founders into classrooms, and making enterprise as normal a career conversation as university or apprenticeships. 

What good support would look like 

 Co-founder of PR agency, BE YELLOW, Hayley Knight, advised:

"Though there are broader policies available, such as R&D tax relief, innovation programmes and a youth employment package, gaps remain. Youth unemployment is still high, and many young people lack resources, tools, networks and digital experience needed to start and scale a business. Support is often fragmented and difficult to navigate and access, particularly in smaller parts of the UK.

"To help bridge this gap, platforms such as Enterprise Nation, Digital Boost and Media Trust play a crucial role by offering free mentoring, tools, networks, events and training. Greater coordination, accessibility and long-term support are now needed to unlock the full potential of young entrepreneurs across the country."

A serious youth entrepreneurship offer would put enterprise on the table at every career decision point, not buried behind university and apprenticeships. It would include finance routes designed with young people in mind, not only age-neutral products.

It would link structured mentoring from founders to local business networks, so young people have someone to turn to when things get hard. And it would signpost existing programmes like the King's Trust and Start Up Loans, so young people know they exist. 

Polly said:

"None of this is expensive relative to the employment package. It is a question of where the policy attention sits."

Why this matters for the wider ecosystem 

Young founders are future customers, suppliers, employees and competitors. Every small business has a stake in how the next generation enters the economy. 

Polly continued:

"If the policy answer to youth unemployment is only 'become an employee', the pipeline narrows. 

"The £3,000 and £2,000 incentives are worth using. If you are thinking about hiring, read the details and see if they fit. But the bigger prize is a system that also backs young people to build something of their own.

"A stronger SME pipeline starts with treating enterprise as a real route, not an inspirational quote."

Tell us what you think 

What would have made the biggest difference when you were starting out? Drop us a line on the platform. We want to hear from founders of every age, but especially those who built their first business young.

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• A guide to funding and support for young entrepreneurs

• Join the conversation: Next generation entrepreneurs

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