There’s a work revolution going on. Some call it the great resignation. Some call it the big quit. But for the millions of Americans who are quitting their jobs to start their own business, the appropriate term might be the great new beginning.
What is the great resignation?
The great resignation is a term that was coined by Anthony Klotz, an associate professor of Management at Texas A&M University, to describe the huge surge in people quitting their jobs in 2021. That surge, which was partly a result of the COVID pandemic, represents a major ground shift in attitudes about what work is, how it’s done, where it’s done, and for many, who calls the shots.
According to the U. S. Bureau of Labor Statistics (BLS), a little over 30% of the workforce (47.8 million workers) voluntarily quit their jobs in 2021. That’s the highest number of quits since the BLS started collecting statistics on the subject in 2001. And so far, there’s not a lot of indication that the quit rate is declining significantly. Another 4.5 million people quit their jobs in March 2022, setting a new record for monthly quits. The quit rate continued high into May 2022, when 4.3 million people voluntarily left their jobs.
Why are people quitting their jobs?
Fear of catching the COVID virus caused some to quit. But the underlying reason for most resignations has been job dissatisfaction. According to a Pew Research Center study survey, the top reasons people quit their jobs in 2021 were:
- Low pay
- Lack of opportunity
- Lack of respect.
- Scheduling flexibility
- Childcare issues
- Number of hours worked were also cited.
Most of the people who quit, the survey found, went on to take new jobs and believe their new positions are an improvement over their past jobs.
The Great New Beginning
Yet there are millions of people who quit and didn’t want a new job. They wanted a new beginning. Instead of working for someone else, they started their own businesses. Thus, along with the surge in people resigning their positions, there was a big increase in startups.
New Business Formations
Census Bureau statistics show there were nearly 5.4 million new business formations in 2021. This was an increase of more than 23% over 2020 when about 4.4 million started businesses. It was 50% higher than the number of business formations in 2019.
Hear from a Real ZenBusiness Customer
Kim Barnett, founder of Boost Your Business LLC, a company that provides business development services for consultants, is one of those newly minted business owners.
“I was tired of working so hard for a large corporation… tired of the rat race,” she says. “The pandemic caused a lot of people, including myself, to reevaluate our lives and think about how we’re spending our time and whether we’re enjoying the people we’re around and the work we’re doing,” she says.
Prior to the pandemic, Barnett had been too wrapped up in her job at a talent advisory firm to think much about her personal goals and preferences. But with a lighter workload and time to think, she realized that job wasn’t the right fit for her anymore. “Life’s too short,” she explains. I started thinking, there’s got to be something that I would like more out there. But I didn’t know what that was.”
About that time, the CEO of a boutique consultant managing firm reached out to Barnett through LinkedIn and recruited her to join their firm. The firm had only 5 employees and the job sounded ideal. So, Barnett quit her job, and went to work for the small firm. But she quickly concluded that job wasn’t the right fit, either so she quit after just 90 days.
What was the right fit? For Barnett, who has more than 20 years of experience in business development, the answer was to launch her own company. After researching how to launch the business, she chose ZenBusiness to start an LLC. As this article was being written, she was focusing on contacting potential clients, and getting her logo and website created.
One of the benefits of owning her own business, she says, is being able to choose how many hours a day and which hours of the day to work. “I can take the time to go to the gym in the morning, and not feel bad about it,” she says.
Barnett is optimistic that her business will really “take off.” But she knows it will take time and that she’s “taking a huge risk.” Like many other startups she’s discovering that” it’s hard to know exactly what the market wants until you start talking to potential clients and hearing what they need.”
Should you quit your job to start a business?
If you’re thinking of quitting your job to start a business, consider your options and resources carefully. Among the considerations is the financial impact quitting your existing job will have. When you quit your job, you’ll not only lose your guaranteed salary, but you’ll also lose health insurance and any other benefits you and your family depend on.
In addition to finances, there are other criteria for business success. You’ll need to be self- motivated and emotionally able to withstand the risks of a startup. You will also have to be good at what you do, be sure there’s a market for what you sell, and that you’re able to reach that market. Writing a business plan will help clarify your goals and focus on the steps you need to take to achieve them.
How to lessen the risk
If quitting your job to start a business seems too risky, there’s another option to consider. Depending on what you want to do and the policies of the company you work for, you may be able to start your business as a sideline while you’re still employed.
Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.