Do I Need An MBA to Start a Business?
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- Getting an MBA can help you avoid many of the pitfalls associated with starting a business.
- About 23% of entrepreneurs hold an advanced degree.
- Around 45% of new businesses fail within five years.
- Entrepreneurship is among the most in-demand MBA concentrations.
While there are definite advantages to getting an MBA before starting your own business, an advanced degree is not a requirement. Millions of business owners and entrepreneurs around the world have successfully launched businesses without an MBA. According to a recent Kauffman Foundation Trends in Entrepreneurship Report, only 22.6% of the entrepreneurs surveyed had an advanced degree.
Starting a business can be fairly straightforward or very challenging depending on the type of business. If you're planning on launching a small business from home, an MBA might be overkill. But if you're planning on launching a new product or service with aspirations of disrupting an industry, an MBA could be your ticket to success.
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Why Get an MBA to Start a Business?
Starting a business in today's fast-paced digital economy can be challenging, and getting an MBA can help you navigate those challenges. An MBA from an accredited business school that offers a specialization or concentration in entrepreneurship or a similar area can provide you with the skills and knowledge needed to launch a successful business while avoiding the pitfalls often associated with business startups.
People in the United States fill out around three million business applications per year. According to the Bureau of Labor Statistics, 45% of these businesses are likely to fail within the first five years of operation.
Poor research and planning, lack of sufficient capital or cash flow, poor financial management, supply issues, bad customer service, poor marketing, and launching a product or service that lacks consumer demand all contribute to business failure.
MBA programs that offer extensive coursework in entrepreneurship and business management concepts can help you turn your business startup dreams into reality. Entrepreneurship is among the most in-demand MBA concentrations.
Not only will you learn what it takes to be an entrepreneur, you'll also dive into business operational areas like finance, operations, administration, marketing, information technology, and risk management.
An MBA can definitely help you achieve your goal of starting a successful new business, but is it worth the investment? Decide for yourself by reviewing some of the pros and cons below.
Pros of Getting an MBA to Start a Business
Many MBA programs in entrepreneurship offer courses taught by people who have actually been through the process of launching a new business. These professors and teachers can be a valuable resource for your future startup.
Many online MBA programs offer concentrations or specializations in entrepreneurship, business management, or a closely related field, making it easier to launch your business from anywhere in the country while furthering your education.
If your business startup fails, having an MBA can make it easier to land a job with an existing company. You'll be able to apply your expertise to a variety of industries and business sectors.
MBA programs help you develop great leadership, collaboration, communication, and negotiating skills. These soft skills will be invaluable when working with clients and vendors.
An MBA program can help familiarize you with many of the technical tools and software you will need for sales, operations, accounting, human resources, e-commerce, and marketing.
Most MBA programs offer an extensive alumni network that you will be able to tap into for advice and support when launching your new business venture.
An MBA will give you instant credibility, which can be helpful during business negotiations.
MBA programs give you the opportunity to present business ideas and get valuable feedback and advice from faculty and peers.
Many business schools have entrepreneurship clubs and organizations where students can access entrepreneurial resources, network with community entrepreneurs, and share ideas.
Cons of Getting an MBA to Start a Business
You don't need an MBA to start a business. Many of the most successful businesses were launched by people without an advanced degree. You can always hire consultants or rely on the advice of experts when you find yourself in unfamiliar territory.
Pursuing an MBA requires a significant amount of time and financial resources. You may be better off applying the time and money to your new business venture while taking online certificate courses in the areas of business that you're unfamiliar with.
An MBA doesn't guarantee that you will be able to successfully launch a new business. An accredited MBA program will provide you with the skills and knowledge needed to start a business, but it's up to you to successfully execute your idea.
Work experience in the business field that you plan to start a business in can be just as valuable as earning an MBA. If you have the opportunity to be mentored by another business owner, you should take advantage of it.
Alternatives to Getting an MBA
There are a variety of alternative paths you can take to pursuing an MBA, including getting a master's degree in a business-related field, taking online business courses, earning an online business certification, or earning a business certificate offered through a graduate business school program.
Frequently Asked Questions About Getting an MBA to Start a Business
Will an MBA help me start a business?
An MBA can definitely help you start a business by providing you with the skills, knowledge, and connections needed to successfully launch and grow a business.
Is an MBA worth it for an entrepreneur?
An MBA is a worthwhile pursuit for any entrepreneur lacking skills and knowledge in key business areas like accounting, economics, human resources, marketing, strategic development, and product development.
What is the best MBA to start a business?
The best MBA for starting a business depends on what type of business you want to start. Generally, an MBA with a concentration in business management or entrepreneurship provides the most comprehensive education related to starting a business.
Krystal Covington, MBA
Krystal Covington, MBA, is a business growth strategist with 15 years of experience in marketing and public relations. Her company, Go Lead Consulting, provides clients foundational tools to build new client and customer relationships. Covington founded Women of Denver, one of the largest privately held membership organizations in Denver, Colorado. Her program helps women increase their business acumen, sharpen leadership skills and connect with other high-achieving women. Covington received her MBA from Western Governors University in 2012.
Krystal Covington is a paid member of the Red Ventures Education freelance review network.
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