The “Great Resignation” has workers leaving their jobs in droves. Yet they aren’t all looking for a new company to work for — many have opted to go into business for themselves.
In fact, there was a surge in new business formation last year, with applications hitting a record 5.4 million, according to the Census Bureau.
Chelsea Kidd, 34, was one of those who walked away to strike out on her own. It was something she had prepared for while she was still working, developing her plans with SCORE, a program that offers mentoring and educational sessions for entrepreneurs.
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In January 2021, she quit her job in the corporate wellness industry and started SiteWell Solutions, a wellness consulting business focusing on remote workers. The timing was perfect, since the pandemic caused a shift towards employee wellness.
“I wanted to be on the forefront of that movement,” said Kidd, who also relocated from Florida to Bozeman, Montana, for her husband’s job.
“I had the opportunity to go full-time and all in. I didn’t want to wait any longer,” she said.
In Kidd’s case, she was fulfilling a dream. Others started businesses out of necessity, in order to earn income after losing a job, said Bridget Weston, CEO of SCORE.
The organization, which has programs across the country, saw a 30% increase in people seeking out their services in 2021 over the prior year. There was a more than 10% increase in mentor requests.
“Entrepreneurs are resilient and creative and when they see a need they are willing to step up and fill that gap,” Weston said.
Those needs have shifted throughout the course of the pandemic and so has the response by entrepreneurs. In 2020, for instance, new business creation was driven by the retail sector, as businesses adapted to the shift to e-commerce, said Luke Pardue, an economist at payroll and benefits provider Gusto, which services small and medium businesses.
In 2021, there was a tilt towards new business creation in the transportation and warehousing sector, he said.
“With ongoing pandemic-related disruptions, new economic needs and opportunities arising each month, individuals are continuing to meet the moment and create new businesses — a trend that shows no signs of slowing down as we head into 2022,” Pardue said.
To be sure, not all businesses are successful. Typically, about 20% fail within the first year, according to the U.S. Bureau of Labor Statistics. There is no hard data available about how many small businesses permanently shut down during the pandemic. However, the Federal Reserve found that about 200,000 more businesses (of all sizes) than is typical closed from March 2020 to February 2021.
Like every entrepreneur, Isaac Medeiros, 24, hopes for long-term success. He began selling miniature Japanese swords, called katanas, out of his Los Angeles apartment in December 2020 as a side hustle.
His business took off quickly, so he quit his job in January 2021. The company had $2.5 million in sales last year and is projecting $5 million this year, Medeiros said. He has expanded MiniKatana and also sells full-sized and foam swords, as well as keychains — all marketed online through social media.
Medeiros also moved into an office and warehouse space. He is making “well into six figures,” up from his previous salary of $55,000 per year, he said.
“Being able to own your own time and being able to place a value on your time, I don’t think you can trade that for anything in the world,” Medeiros said.
“I feel incredible every day,” he added. “I love my job.”
Meanwhile, Jennifer Sutton understands it will take time to build her business. Burned out, the 37-year-old mother of two quit her job as an advertising executive last March to open a juicery, Guest Haus Juicery & Matcha Bar in Park City, Utah.
She hasn’t looked back.
“This is the happiest I’ve been in this sort of second phase, since I was fresh out of college in New York and kind of hitting a stride and single without kids,” she said.
“It feels like, wow, I’ve really started to hit on my next chapter here,” Sutton added. “But the letting go of that part is a little scary.”
She’s learned things along the way, like knowing when to increase offerings, like smoothies and salads, and when to pull back on others. The response by her customers has been great, she said, but she also knows there isn’t really such a thing as overnight success.
“Having patience because you believe in what you are building is a lesson I am learning everyday,” Sutton said.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.