Carey School of Business
If you are thinking of starting your own business, because you believe that you have an entrepreneurial spirit, then the MBA (Master of Business Administration) degree may be attractive to you. However, an MBA degree has an average price tag of $100,000, which means you are likely to saddle yourself with a significant debt. Some believe that people who have an entrepreneurial spirit do not need to complete an MBA, as they should have the natural skills and knowledge to be successful. However, the benefits of the MBA degree should not be ignored either. Jump to 9+ Top Online MBA Programs for 2017.
Reasons to Get an MBA to Launch Your Own Business
When you hold an MBA, you will have more clarity on every aspect of your business. It also enables you to have a better idea of what will happen in the future. The debt issue is significant, of course, and it is true that an entrepreneur who is already saddled with a huge debt will find it very difficult to truly start and grow a business, requiring much more financial sources than if there was no debt.
On the other hand, it is all about calculating your return on investment. With the degree, you will have greatly increased knowledge and skills, which in turn means you should be able to set up a business more quickly and in a better way, leading to greater financial returns in a shorter period of time. Many of the most successful new startups are headed by someone with an MBA. That is because these graduates have a far greater understanding of how to run a business, and make it more profitable.
Having an MBA puts you on an even playing field with many other professionals, such as marketing directors, hedge fund managers, and finance directors. It provides you with a valuable experience, and an education that also lets you obtain transferable skills that can be used in any enterprise you decide to go into.
Some believe that entrepreneurs need to learn “the hard way”. This means they should set up businesses and fail, learn from that experience, and try again. Others, however, feel they can gain similar experience in an MBA program, with the difference that they do not need to fail before becoming successful. The expense of starting a new business and failing is very expensive, perhaps as much as or even more than the student debt you may be left with after pursuing an MBA. In an MBA program, you will complete numerous case studies, which gives you the opportunity to truly learn what works and what does not, without actually losing a company.
What an MBA Course Teaches Entrepreneurs
A good MBA course, and particularly one with an entrepreneurial concentration, teaches:
• The functions of the financial markets
• Marketing skills
• Effective leadership
• Product development
• Strategy formulation
There are downsides to getting an MBA degree, even for those who want to start their own business:
• The tremendous cost associated with an MBA degree.
• The fact that even with an MBA, you have no 100% guarantee that you will be successful in your enterprise.
• Many successful startup ventures were created by those without an MBA.
• The MBA degree continues to be a degree that prepares you more for managing a business (for someone else), than to manage your own.
• Some suggest that the textbooks for MBA programs are out of date by the time they are used in school. They are rewritten every year, and they have to be submitted for print by spring, to be taught in the fall semester. This means that the information contained within them is often as much as two years old, which makes it almost irrelevant for entrepreneurs.
• Entrepreneurs are different from managers and leaders. This means that entrepreneurs learn more from experience than from classical education.
10 Reasons why an MBA Is a Great Idea for Entrepreneurs
There are pros and cons to every option. However, if you want to start your own business, then it is very important that you equip yourself with all the skills and knowledge possible to become successful. It is undeniable that you will learn some important things during an MBA degree. The top 10 reasons (but there are many more) include:
1. You Understand Business Management Theory
2. You Learn Different Ways of Running Your Business
3. You Make Lifelong Contacts
4. You Can Take Your Business Global
5. You Can Hire The Right Talent When Needed
6. You Can Write A Proper Business Plan to Attract External Funding
7. You Have a Professional Safety Net
8. You Could Become a Thought Leader
9. Your Alumni Connections Could Help Later
10. You Can Build a Solid Online Presence
Nobody would deny that you should be able to start a business without completing an MBA and saddling yourself with a lot of debt. However, by not doing so, you will never learn how powerful this degree is in terms of starting a successful business and shaping a new concept. This is also recognized by the various business schools across the country, which are attracting entrepreneurial professors, as well as launching entrepreneurial centers within the school. Across the board, schools are seeing an increase in the number of graduates who start a new business. About 18% of graduates from Stanford, for instance, start their own business.
Some examples of very famous entrepreneurs who have an MBA and used it to be successful include:
• South African-born Elon Reeve Musk, who is the founder and CEO of SpaceX, the popular space exploration company. He is also chairman of Solar City, and Tesla Motors’ premium electric cars’ founder and product architect. He previously founded PayPal and Zip2, and continues to come up with new ideas (including the colonization of Mars!).
• American-born Michael Rubens Bloomberg, who is the founder and owner of Blomberg L.P., was the 108th New York City mayor, the 7th richest person in this country, and the 13th richest person in the world
• American-born Phil Knight, the 15th wealthiest person in the world, who founded world-famous sports brand Nike
• American-born Scott McNealy, co-founder of Sun Microsystems
• American-born Frank Batten, co-founder of The Weather Channel. He was one of the first people in this country to complete an MBA degree, in 1952, when only Harvard Business School offered it.
• Larry Page and Sergey Brin, co-founders of Google