My journey to owning my own business began about a decade ago. After finishing high school, I went to college to study business. I graduated, landed a job as a financial analyst, and completed my MBA with a focus on Finance about five years ago.
Following this path seemed logical: finish high school, go to college, get a job in your field, and then earn an MBA to boost career opportunities. It was a straightforward route that I didn’t question much. I pursued my MBA thinking it was essential for success in corporate finance.
Now, I’m a full-time blogger.
People often ask if I regret spending so much time and money on my degrees (three in total). It did take a lot of time and led to significant debt. I didn’t learn about blogging in college, and an MBA doesn’t specifically cover starting a niche business. I pursued the MBA to enhance my career prospects, not to start my own business.
There are 28.8 million small businesses in the U.S., making up 99.7% of all businesses. Many people are starting their own ventures and working for themselves. But do they all need an MBA?
An MBA isn’t required to start your own business. But does having one make a difference?
I looked into the value of an MBA and found data from the U.S. Bureau of Labor Statistics on unemployment rates and earnings by education level for 2016. It shows that having a Master’s degree can lead to lower unemployment rates and higher median weekly earnings. However, it doesn’t specify those who have started their own business.
Interestingly, a Harvard Business Review report found that most top business leaders don’t have MBAs. Only 29 of the 100 best companies had executives with MBAs, and less than half of those were from elite business schools.
Here are some successful entrepreneurs without college degrees:
– Walt Disney, founder of the Walt Disney Company, dropped out of high school at 16.
– Richard Branson, founder of Virgin Group, also dropped out of high school at 16.
– Rachael Ray, Food Network star, never attended college.
– Michael Dell, founder of Dell Computers, started his business in his college dorm but later dropped out.
– Larry Ellison, co-founder of Oracle, dropped out of two colleges.
Conversely, many successful people do have MBAs, like Elon Musk, Michael Bloomberg, Sheryl Sandberg, and Dr. Oz.
So, should you get an MBA if you want to start your own business?
MBAs can be expensive, ranging from $5,000 to over $100,000 depending on the school. The cost continues to rise, with top schools like NYU, Harvard, and Stanford costing over $200,000.
I attended a moderately priced state university for my MBA, which I found to be a great value. However, if it had cost over $200,000, I’m not sure it would have been worthwhile. That’s a lot of money for limited real-world experience applicable to a specific business idea.
Earning an MBA also takes time. Some students focus on it full-time, which means no income or significantly less income. Others work full-time and take a smaller course load. I did both, which left little time for anything else.
An MBA surrounds you with determined people, helping you build a network that can be valuable for your business. Networking is crucial, and an MBA can help in that area.
However, an MBA won’t teach you everything about starting your specific business. It provides a well-rounded business education, but you’ll need to learn about your specific business elsewhere. For example, an MBA won’t teach you about blogging or other niche markets.
Through my MBA and career as an analyst, I learned about business accounting, law, management, economics, finances, marketing, and advertising. These are all important when running your own business. My analyst job also taught me about running a profitable business, which has been invaluable.
According to Investopedia, around 30% of new businesses fail within the first two years, 50% within five years, and 66% within ten years. Common reasons for failure include not investigating the market, problems with the business plan, and poor marketing. These are areas covered in an MBA program.
Real experience is the best teacher, but an MBA provides a well-rounded education that can help launch a successful business. It teaches you how to manage a team, understand business finances, and research the best business plans.
Does everyone need an MBA? No. Everyone’s situation is different, but my MBA has helped me manage my own business effectively.
What do you think? Should someone who wants to start a business get an MBA? If you’re already a business owner, do you have one? Why or why not?