Q. Dear Zenagos, I’m thinking about starting my own business, but I didn’t study business in school and I’m worried I don’t know enough to really run the business well. Do you think I should get an MBA? It would take a couple of years, but I’d probably learn a lot, and maybe it would help me avoid some common and costly mistakes?
You do not need an MBA to start your own business. Many successful entrepreneurs have started businesses without an iota of traditional business knowledge, much less an MBA. Steve Jobs and Bill Gates come to mind as two wildly successful entrepreneurs who dropped out of college.
Getting an MBA can provide a lot of positives. You will meet smart people – professors and fellow students alike – who might partner with you or otherwise give you great advice for your venture. You will build valuable relationships that may last your lifetime. You will learn the language of business – terms like “working capital,” “marginal cost,” and “return on investment” – that give you credibility in business conversations. You will also practice valuable skills in teamwork, negotiation, collaboration, and communication. And, if your business doesn’t work out, having an MBA will probably make it easier to find a job working for someone else.
If you are interested in a full-time (usually two-year) MBA program, you should definitely do the math to understand your “opportunity cost” (the two years of income you will miss while in school), in addition to the tuition cost and possibly the costs of relocating yourself and your family. If you are going to go into debt to pay for the degree, don’t forget the cost of interest, which can stretch for years.
If you decide the opportunity cost is too great, or if you decide you might miss the best timing for your business by waiting two years, then consider some alternatives. You don’t need an MBA to develop relationships with people who can help you. There’s nothing stopping you from starting now. For example, the U.S. Small Business Association is a reputable source that provides many resources to small business owners – from advice to online templates and videos. The SCORE program offers experienced mentors who are assigned to you for free.
Also, you would be surprised at how much is not covered in typical business school curriculum: sales and sales processes, how to raise money, how to manage employees, and much more. Some of these things you can learn about in books, by taking courses from experts, or by simply getting in there and trying. Yes, you will make some mistakes. But you’ll make mistakes with or without an MBA. If you already know which venture you want to start, it could be a better investment in your future to divert that tuition money to your business.
Related blog posts: “When is it worth it to get an MBA?”