Or click Continue to proceed without making a new backup.

Enter the password you use to log in to your Mac, then click OK. Erase Assistant opens and asks you to sign in with your administrator credentials.From the System Preferences menu in the menu bar, choose Erase All Content and Settings.From the Apple menu  in the corner of your screen, choose System Preferences.

Otherwise, you'll see a message explaining that other volumes need to be erased before you can erase all content and settings on this Mac.