If I had a nickel for every time I was asked this question, I would have about $15. As a university professor, this might be a bit of a controversial post. I encourage you to read the whole article to understand this point of view.
Question: “I want to start a company. Should I go back to school and get an MBA?”
My answer is always this:
An MBA could do several things for you, such as:
- Introduce you to a new group of business networks who could help you get a new job or a new lead
- Increase your salary at the current company you work for or increase your asking salary when you look for another job
- Allow you to use the career services of the school to help you find a new job
Do you notice the theme here? See – the simple truth is this:
GETTING AN MBA CAN HELP YOU GET A BETTER JOB.
Getting an MBA will probably not help you start a company; in fact, it might actually deter you further from starting your company. Here’s why:
- The average MBA in the United States will run you about $60,000 – that takes away from possible start-funds you may have available
- An MBA will take up a minimum of 20 hours of your time each week – that takes away from time you could spend starting your business
- When you get the MBA and get a promotion – that’s more incentive for you to stay in your job and not start that business
Here’s a typical example:
I have a good friend who wants to start a bakery. He has a great line of recipes from his grandmother and really wants to start a hip little bakery in a cute, urban neighborhood. He currently works in the entertainment industry. He asked me if he should go back to school because he has no business background. I told him, instead of wasting $60K on a degree, take half of that $60K and support yourself so you can work at a bakery for six months. Then take the remaining $30K and put it in the business.
Yeah, he thought I was nuts too.
But here is the hard truth: If you want to start a company in an industry – you need experience in that industry. That experience will help you:
- Gain credibility from everyone from your investors to your parents
- Help you uncover the problems in the industry that your company can solve
- Develop the networks you need in the industry to build a company
Don’t want to give six months of your life up pounding dough? Then I doubt you’ll want to spend the rest of your life doing it.
In my friend’s case, he can go be a baker and work along side the owner and learn what a day in the life of running a bakery is actually like. Anyone who tries this strategy out is likely to find that there is a big difference between what you think a day of an entrepreneur is like and what a day in the life of an entrepreneur is REALLY like. Just ask one.
The cool part is – you will have found out what you like and what you DON’T like, without ruining your credit. If you do realize you don’t want to be an entrepreneur, you’ll still have $30K to pay for half of your MBA so you can get a better job.
Categories: Entrepreneurship
Excellent insight!
Sometimes those who want to start their own businesses or acquire an MBA are motivated primarily by a desire to run away from aspects of their current situation that are not ideal. This is not usually a recipe for success on either new track.
For those who want to start their own business there should be a clear understanding that for a significant initial period entrepreneurs nearly always work harder and for less pay than anyone would tolerate in a regular job. Gaining some biz knowledge before taking the plunge might enhance their chances of success. What core business information have you found that many first time entrepreneurs lack, and what is the best way to acquire this knowledge?
Thanks PJ! What I find is that entrepreneurs normally do not anticipate true costs, sales cycles, or even how much time and energy everything takes. I’m not sure I know the best way to acquire this knowledge, but I’d highly recommend finding a mentor, working in the industry, or working in a startup.
Well said! Thank you.