The number of Americans quitting their jobs is at a 5-year high, according to the Bureau of Labor Statistics. Entrepreneurial activity has also been on the rise as of late, according to the Global Entrepreneurship Monitor. Could these trends be related? I’d say so.
During the recession, Americans were staying put in their jobs even if they were unhappy. Recently, however, people are feeling much more confident in their ability to find a soft landing if they jump ship. Some of those people are leaving for jobs at other companies, but many are moving on to build businesses of their own.
We’re currently in the midst of a major cultural shift—48 percent of Americans want to be entrepreneurs today. While past generations believed that the best and safest path was through a long career at a big, stable company, those in the workforce now don’t see it that way at all. The financial crisis called into question the entire notion of job security, as “stable jobs” were lost and “stable companies” turned out to be anything but.
Nowadays, many people are of the mindset that entrepreneurship is actually the more secure path. Instead of putting yourself at the mercy of layoffs and watching the heads of the company you work for make bad decisions, entrepreneurship means taking your fate into your own hands.
The millennial generation grew up with role models like Mark Zuckerberg, who proved that not only do you not have to go to work at a big company to be successful, but you don’t even have to finish college. A whopping 63 percent of 20-somethings want to start their own businesses, according to a recent survey.
And it’s not just the millenials who are finding entrepreneurship more appealing than the 9-to-5. According to the Kauffman Foundation, the 55+ age group is the fastest growing demographic of entrepreneurs. “Encore careers” are becoming more and more common, as retirees want to stay active and supplement their retirement income at the same time.
Even baby boomers who haven’t yet reached retirement age are leaving the corporate world and striking out on their own—a survey from the MetLife Foundation found that 25 percent of baby boomers hope to start a business or nonprofit in the near future. In all age groups combined, entrepreneurial ambitions have grown much stronger over the last decade, according to an ongoing survey by the Global Entrepreneurship Monitor.
Not only is the desire to pursue entrepreneur-ship more common now than it was 10 years ago, but it’s also easier to become an entrepreneur today than it was in the past. Barriers to striking out on your own are at an all-time low. It used to be that to start a business you needed hundreds of thousands of dollars in startup capital. Now, according to Intuit, it takes only $365 to start a business in the U.S.
We can thank technology for that—the internet has made starting a business from scratch extremely accessible. It costs almost nothing to build a basic web page, and you can set up a whole business infrastructure for under $100 a month. Virtual help desks, for example, allow small companies to offer world-class customer service without adding a whole customer service team to the payroll.
For types of businesses that require more than the bare minimum startup capital (a physical storefront, for example), there are also many more ways to raise money today.
Even though the credit environment could be better, alternative financing options abound. Aspiring entrepreneurs who have excellent personal credit and a solid business plan can apply for unsecured debt (i.e., no collateral required); for those with slightly less stellar credit scores, a merchant advance (fast cash, minimal paperwork, high fees) can be a good option; and those with retirement savings can make use of a Rollover as Business Startups (ROBS) transaction to invest their IRA funds into their own business.
By the year 2020, 40 percent of people in the U.S. will work for themselves, according to a study by Intuit. As the barriers to starting a business continue to get lower and the cultural shift away from the 9-to-5 lifestyle continues, we are entering into a new golden age of entrepreneurship in America.
50 years ago, the American dream was to find a stable job, have a long career, and retire with a pension at age 65. Today, that ideal feels awfully antiquated. What people want now is an opportunity to be autonomous and creative, to call the shots and make their own way. We see that it’s possible to change the world in ways big and small. And for many of us, entrepreneurship is the best way to do it.