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For this event planner (and millennial) her small business debt is ‘an investment in the future.’
Small Business
August 9, 2016

Millennial small business owners: Using credit to grow

For this event planner (and millennial), business debt is not a weight to be avoided but “an investment in the future.”

When you think about a successful small business, you might picture one that was born in someone’s imagination, came to life in a basement, and then graduated to a storefront on Main Street. But many small business owners choose to purchase a company — taking advantage of its local ties, brand value, and an established clientele.

That was the case for Jennifer Braun, a millennial who is also an event planner in Minneapolis. She decided in 2009 to purchase an existing party and event services provider called Festivities.

Jennifer, an event planner and millennial, considers her small business debt “an investment in the future.”
Jennifer, an event planner and millennial, took on debt to expand her business.

“I really like to touch all aspects of a project,” says Jennifer. “And when you work for other companies, sometimes you feel like things get held up or you don’t know where the bureaucracy comes from or why decisions were made. So it’s very appealing to be an entrepreneur and blaze that path.”

With the help of Wells Fargo, Jennifer secured an SBA loan to cover the purchase of Festivities. And she’s not alone: According to a recent Wells Fargo study of millennial small business owners, about two-thirds (63 percent) say taking on debt is necessary for growth; only about half of older small business owners share that view.

“Our research shows millennial small business owners to be thoughtful about credit, and their attitudes toward taking on debt have likely been shaped by the Great Recession,” says Lisa Stevens, Wells Fargo’s head of Small Business. “At the same time, it is encouraging to see them investing in their businesses and looking at entrepreneurship as a way to secure their future.”

Through more than a thousand interviews, Wells Fargo’s Millennial Small Business Owner Study identified similarities and differences between millennial small business owners and older small business owners — and how millennials are potentially affecting the business landscape.

Doubling down

The purchase of Festivities was just the first step into entrepreneurship for Jennifer. After starting with three employees, her company grew quickly and she also started a “sister” company called Type A Events, which focuses on corporate meeting and event planning.

“With Type A, we’re planning an entire conference, from the registration site and the marketing of the event to planning all the speakers and the session content,” she says. “And when a client hosts a welcome reception that first night, Festivities creates and supplies all those elements to showcase the customer’s brand. So the two businesses really dovetail, even though they have different focuses.”

Running two companies resulted in more employees and the need to showcase a variety of design offerings, which led Jennifer to realize she needed a bigger space to house her businesses. And that brought her back to Wells Fargo.

John Thwing, a Wells Fargo business development officer, had worked with Jennifer in 2009 when she applied for her first SBA loan, and the two teamed again to help secure funding for a new 30,000-square-foot warehouse.

“I do think that millennial small business owners are probably a little more used to hearing about capital and raising capital, whether it’s from ‘Shark Tank’ on TV or hearing about initial public offerings in the marketplace,” he says. “So an SBA loan is just one flavor of capital, and for a small business entrepreneur it may be a very attractive type. Jennifer was not at all intimidated by the use of credit to grow her company, and I’d say that’s pretty common with a lot of millennials.” 

Jennifer secured an SBA loan to cover the 2009 purchase of Festivities, which now coordinates about 3,000 events a year.
Festivities coordinates up to 35 events on Saturdays during peak wedding season.

Now Jennifer’s two companies have the space they need to showcase all their services. As of 2016, Festivities is coordinating about 3,000 events a year, including up to 35 events on Saturdays during peak wedding season. Meanwhile, Type A Events is managing 20–25 large corporate conferences around Minneapolis.

“You’re taught as a kid, ‘Don’t go into debt!’ And I hear that from some other small business owners,” Jennifer concludes. “But I look at how I can leverage our cash assets to make the most out of my businesses — an investment in the future.”

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