Starting a business without a Master of Business Administration (MBA) is like embarking on a cross-country road trip without a map or GPS. You might make some headway on intuition alone, and there’s a chance that you will reach your destination successfully, but it’s more likely that you’ll get lost, waste money on gas and, ultimately, end up turning around.
An MBA degree is not a prerequisite for starting a small business. However, obtaining one can help save you time, money and frustration on your entrepreneurial road trip, helping improve the odds of success for your small business.
Why Are More People Turning to Entrepreneurship?
The New York Times notes a “tidal wave of entrepreneurial activity” following the coronavirus pandemic. Furloughs, remote work and the threat of contracting a deadly virus have prompted the re-examination of life and career choices by many. Ranjay Gulati of Harvard Business Review has dubbed this transition “The Great Rethink.” People are quitting their jobs en masse to lead more purpose-driven lives, and some are turning to entrepreneurship.
Information from the U.S. Census Bureau shows that Americans collectively started 4.3 million new businesses in 2020. This amounts to a 24% increase from 2019. It’s also the highest figure in the past decade by far. Here are just a few reasons people are pursuing entrepreneurship:
It’s purpose-driven: Successful businesses are focused on improving other people’s lives. This motivation gives the entrepreneur a more intimate sense of purpose, rather than being a cog in a larger corporation.
Control: As an entrepreneur, you are the boss of your work schedule. As the business grows, you’ll be able to outsource manual tasks and free up your own time.
Financial incentive: When you start a business, your income becomes scalable. There is theoretically no limit to the number of products you can sell. On the other hand, you are limited in the number of hours you can work in a day. There’s also a cap on the salary that you can reasonably expect to be paid, especially for mid- and lower-level employees.
With that said, starting a business isn’t easy. Even a company with one employee (freelancing) comes with a mountain of challenges.
Roadblocks to Starting a Small Business
If you don’t have a partner or sufficient funding to outsource some of the work, then you will be responsible for every facet of your business to start out, including items like:
Web design: Almost all businesses require a website of some sort. Unless you have the money to pay for one, you will have to design, build and maintain your own.
Accounting: You’ll have to learn how to file your business entity, record your financial figures and pay taxes on time.
Sales: To start, you will be the lone salesperson for your business. It will be up to you to land every single client or customer.
Marketing: You’ll need to market your business in some form. Most likely, this means learning about Google/Facebook ads, email marketing, content marketing or whichever form you choose. You’ll also have to learn how to effectively brand your business.
Social media: Similar to a website, social media pages are vital for small businesses. Having a social media presence means learning the intricacies of creating content and building a following.
Time management: It will be up to you to ensure that you stay focused and productive each day.
Decision-making: You would have to weigh the pros and cons for every single decision for your business.
Suffice it to say, starting a small business comes with a hefty learning curve. Fortunately, obtaining an MBA can help entrepreneurs flatten the curve.
How Can an MBA Help Me?
An MBA program is designed to prepare you for a management track. Through an MBA program, you can learn how upper-level management analyzes a business and makes decisions. Coursework includes information on the planning, marketing, organizing, financing and management of a new business venture. You’ll essentially study the map of the road that you are going to take before you depart on your trip. Some programs go one step further.
To ensure that students are fully prepared to launch their own venture post-graduation, the coursework in some programs requires students to develop business plans. This exercise helps students test the feasibility of their business concepts. The result: Students graduate with a blueprint for a potential start-up venture. A degree program that uses this methodology is Longwood University’s online Master of Business Administration.
Graduating with a proof of concept alone can save you time and money that might otherwise be wasted on launching unsuccessful ventures.
Additionally, an MBA teaches you high-level concepts that are difficult to learn on your own. Topic areas include managerial accounting, economics, data management, information technology, entrepreneurship, team building, negotiation, conflict resolution and strategic marketing.
Last, candidates in the market for an MBA program must consider the connections they will make while in a program. Enrolling in an MBA program creates an opportunity to network with like-minded individuals. Relationships that you create could open doors down the road in the form of business partners, financing and mentorship.
The biggest roadblock for most candidates is cost. MBA programs do not come cheap. According to MBA.com, The Economist’s 2020 Executive MBA Rankings highlight data available from 70 business schools with costs ranging from $62,000 to $213,000 for an executive MBA program.
Pursuing an online MBA is one way to sidestep the high cost while still enjoying access to all of the same benefits of a business degree. Longwood University’s online program has an affordable cost that enables students to earn the degree without racking up debt, helping them travel light as they embark on their entrepreneurial journey.
Learn more about Longwood University’s online MBA program.