More Gen Z entrepreneurs launching businesses 'but many will go bust'

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 reported by Newspage shows that more than one in ten of the company directors who have registered through it 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 more than 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 of Your Company Formations , said: "For 10 years and for hundreds of thousands of customers, the typical person starting a company with us has been in their late 30s, 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 11pm 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 wasn'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.