Why You Should Skip the MBA and Start a Small Business Instead
The number of degree programs and specializations in entrepreneurship has exploded in the past several decades, growing twentyfold between 1985 and 2008.
But in the age of information, with more resources available than ever, is investing in a degree like an MBA really necessary?
The proliferation of startup empires with MBA-less founders—including giants like WhatsApp and Dropbox—suggests not.
Rather than invest in a post-bachelor’s business degree, you may be better off starting your own business. While an MBA experience isn’t fully replicable, starting your own business can act as a launchpad for developing real-world business skills and furthering your career.
Why Start Your Own BusinessGoing back to school can lead to promising career opportunities, but it’s not the only path to success. It may be more worthwhile to start a business than get an MBA because:
- Launching your own company provides a business education in and of itself. Sure, having a big reservoir of knowledge can help, but then again, the information learned in business school doesn’t necessarily translate into starting a successful small business. By getting out there and actually trying it, you’ll be getting a hands-on education that a generalized curriculum wouldn’t be able to provide.
- MBAs come with a significant opportunity cost. In fact, Bloomberg Businessweek found that the total “real” cost of an MBA averages out to be $248,000. This figure accounts for two years of lost wages and the cost of business school itself, but there’s also work experience and potential career progression that could have been gained otherwise.
- By starting a company, you’ll have equity in a business instead of business school debt. The amount of capital required to start a home-based business generally runs between $2,000 and $5,000, making it far more affordable to invest in your own company than in an MBA. While there’s no guarantee your company will succeed, that’s a sizeable difference between a small business investment and taking out loans to pay tuition.
- The returns on an MBA vary based on your ultimate goal. MBA students generally see a boost in income after graduating, with an average salary of $142,000. However, for those looking to start a small business, an advanced degree doesn’t guarantee immediate returns or even returns at all. In fact, debt from your MBA might hurt by posing as a financial setback for your business goals.
How to Build Your Own MBA by Starting a BusinessThink of starting a company as a self-taught business education, with several means of gaining the same (or more) knowledge possible through an MBA. Here’s how:
Tap into free or inexpensive resources.Online classes like those offered by Coursera, Udemy and Khan Academy make it easy to learn the fundamentals of business on your own terms and for a significantly lower cost. Using these programs, you can even find specialized courses that match your business’s needs, such as digital marketing basics or data analytics. This will allow you to create a personalized business curriculum that’s tailored to your interests and runs at your own pace. In addition to these programs, there are plenty of self-taught business books at your disposal. Consider adding these to your reading list:
- The Personal MBA: Master the Art of Business by Josh Kaufman
- The Lean Startup by Eric Ries
- The Strategist: Be the Leader Your Business Needs by Cynthia Montgomery
- Never Split The Difference by Chris Voss
- The 80/20 Principle by Richard Koch
Connect with other professionals in your industry.Many point to the networking opportunities of getting an MBA as its biggest benefit. However, networking doesn’t only happen in business school. You can find other professionals to learn from and connect with in a variety of ways:
- Join Facebook groups focused on entrepreneurship, small businesses, and the industry your business is in. This niche is an active online community where you can interact directly with other budding entrepreneurs.
- Find relevant events on Meetup. You can use this platform to find local groups of like-minded entrepreneurs as well as potential clients.
- Consult your alumni network or former teachers and professors. Doing so can open doors to other contacts who are happy to provide guidance and mentorship.
- Join a professional association. By uniting professionals in the same field, these organizations are perfect for networking, learning about new industry trends, and even promoting your own business.
- Use a one-on-one coaching service like Clarity to talk to industry experts of your choosing. Priced by the minute, these services can be costly—but with wise budgeting and focused agendas, you can get the guidance you need in your designated amount of time.