Depending on whom you ask the question, “Does an entrepreneur need an MBA,” you’ll get a different answer. Starting a business requires many skills that can be taught in school and many that can’t. A lot of successful entrepreneurs earned MBAs before starting their businesses, and while some of them say their degrees gave them important skills that contributed to their entrepreneurial success, others emphasize the importance of being able to think in unconventional, unteachable ways.
What Do You Learn With an MBA?
An MBA is an advanced, specialized degree that demands creativity and intelligence from students, but the classroom can never be anything more than a test run for aspiring entrepreneurs. For example, MBA students take classes on how to prepare and write a business plan, but they also learn that a business plan is already obsolete by the time it’s been printed, because the series of events that actually occurs when a business is started can’t be predicted, according to Entrepreneur. MBA students learn valuable analytical techniques for understanding statistics and testing hypotheses, and data analysis is one area that many entrepreneurs with MBAs say is lacking among business founders without formal business training.
One tool that is especially valuable for analyzing all of the uncertain variables that go into starting a business is the Monte Carlo simulation, which is a mathematical model of the numerical values that a business needs to predict accurately, such as costs, profits and market variability. The Monte Carlo method uses probability distributions to forecast a realistic scenario for a startup so that the owners can properly allocate resources and plan for contingencies. A strong understanding of math and business statistics can make the difference between outcomes that somewhat resemble the predictions and those that require an excessive amount of reaction and readjustment, putting the business owners on the back foot.
Alternative Routes
A lot of the skills learned during an MBA are real-world skills that students could learn through the process of starting a business. For example, teamwork skills, meeting deadlines, reacting to unexpected events and networking are all skills that are honed with an MBA, but a master’s degree isn’t necessary to acquire these skills. The experience of going through a graduate education is transformative for most people, but it costs a lot of money that could be invested in a business startup instead.
An MBA is usually a requirement for a career in corporate executive management, and an entrepreneur can benefit from getting an MBA by using it to convince investors and other loan providers that a business plan is sound. However, if you still haven’t finished your bachelor’s degree, you may want to consider an undergraduate degree in the field of your interest instead. For example, if you want to create mobile technology, you might consider a degree in engineering or computer science. If you want to start a fashion line, a degree in art or visual design would be a good foundation. A business major or minor could also give you a lot of useful perspective.
Related Resource: How Entrepreneurs are Different From CEOs
Starting a business is one of the most challenging and potentially rewarding careers available, but being passionate about your area of interest doesn’t guarantee success. An MBA raises you to a new professional level, which is something to consider when asking, “Does an entrepreneur need an MBA?”
