Have you heard of The Great Resignation? This concept began around March 2021 when Microsoft released its Work Trend Index report and an associate professor at Texas A&M University coined the phrase in a viral Bloomberg interview. The report stated that 41% of the global workforce is likely to consider leaving their current place of employment within the next year. Later, the U.S. Bureau of Labor Statistics recorded that more than 4 million American workers quit their jobs, confirming there is a mass exodus of workers leaving their jobs for other ventures.
Resignation rates continue to climb and, to this date, more than 7.6 million Americans have submitted their two-week notice. This unique situation raises the question about why employees are leaving their place of work, adding to the struggle to fill a record-high number of job openings throughout the country. A recent survey by Digital.com found that 32% of respondents who quit their job had done so to start their own business. Of those, 62% said their top motivation to resign was to be their own boss. As the economy fell, entrepreneurs rose to the occasion.
If you are considering leaving your job to test the waters of entrepreneurism? Follow these five steps to do it the right way.
- Have an emergency fund. It is no secret that starting a business costs money. Have a plan to ensure you have enough funds to cover your fixed and variable expenses. Find ways to reduce your personal expenses while you start your business. If you have loans, try to get those paid off before you quit your job. Try to sell things you do not need or rent an extra room in your house so you can have a nice cushion in your savings. You will be glad you did this.
- Create a source of income. Many small businesses do not start generating revenue to sustain operational expenses for about six months. It is common to start your side hustle while you have your job until your business starts to show positive returns. Explore revenue opportunities in the industry you selected and start brainstorming about what is required to make the jump as full-time business owner.
- Utilize your benefits. Take advantage of all your medical and retirement benefits while you still have your job. If you have put off doctor visits, get a full check-up before leaving your job while you still have medical benefits. Your health plan should include deductibles and discounts that will help you stay on top of your health and likewise for those who depend on you. As for your retirement benefits like a 401(k), a tax expert can help you roll over funding to invest in your business without having to make a withdrawal and continue your contributions as you grow.
- Stay connected with your network. Having the right people in your corner will be important because networking is a key contributor to business success. Make sure to make a list of important people in your personal and work life to keep in touch with. Talking to people who are in the business you want to be in is critical, as they can share their experience and lessons to help you grow.
- Have a plan. A business plan can save you money, energy and headaches. It helps you consider the path not taken by exploring different aspects of your business before you take the leap of faith. Many organizations in the Valley offer free classes for diverse groups who want to start a business. Working alongside a mentor and subject matter experts will guide you through obstacles and opportunities. Never underestimate the power of a plan and a mentor when you chase your dreams.
Millions have made the leap of faith to start a business and it is extremely rewarding to watch your hard work pay off. But starting a business also requires time, energy and motivation. Make sure to find something you are truly passionate about while serving a market need. If you are ready to start your dream business, gather your facts, do your research and run your numbers first.
EDGAR RAFAEL OLIVO is a bilingual business educator, economic advisor, and contributor for several media outlets. He’s a nonprofit executive who is passionate about education. He is certified in finance and data analytics and holds a business degree from Arizona State University.
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