Entrepreneurship is incredibly vital for any country’s economy and success. The world is thick with renowned entrepreneurs who thought of creative ideas and launched startups, which later flourished into million-billion dollar organizations. A few of these most influential and outstanding entrepreneurs include Richard Branson, Jeff Bezos, Steve Jobs, and Bill Gates. The success stories of all these famous entrepreneurs elicited from small and modest beginnings and advanced to the highest level of the corporate world.
While many individuals share the dream of starting a business, it’s relevant to note that stories of failed businesses transcend the successful ones. According to the 2018 SBA Office of Advocacy data, approximately half of startups (45.4% – 51%) managed to survive the first five years. And only 1 in 3 businesses was able to cross the 10-year line. The staggering statistics depict that entrepreneurship is somewhat risky. While the reasons why enterprises didn’t get to tell the tale are several; however, the most common one is failure to prepare.
Nonetheless, the good news: a master’s in business administration can be a significant asset for entrepreneurs. An MBA imparts leadership and management skills crucial for professionals belonging to various career pathways, either working in multinational firms or as entrepreneurs. However, this begs the question: are the skills acquired from MBA highly needed for startup owners? Answer: a resonant “yes.”
To better understand the significance of the MBA in the startup realm – whether ambitious or well-established, here we’ve jotted down some of the benefits:
Gain business knowledge
A master’s in business administration degree delivers comprehensive knowledge about various core business functions. The degree includes multiple courses such as operations management, data analytics, supply chain, human resource management, and financial management. These areas equip individuals with the abilities and knowledge to run a business swimmingly from day one.
Prospective students can enroll in AACSB online MBA programs to develop strategic agility, acquire global awareness, and learn how to inspire and manage change. The AACSB-accredited business schools ensure the commitment to quality education, strategic management, and learner success. This way, aspiring entrepreneurs can graduate with the knowledge that can assist them in developing effective business models from the beginning. And this, in turn, gives the individuals a competitive edge and an opportunity to draw the attention of potential investors.
Besides, out of all the main benefits of the MBA degree for entrepreneurs, the one that stands out the most is online learning. Online degrees allow individuals to manage their studies and keep up their career momentum with slight lifestyle disruption.
Learn financial literacy
Undeniably, launching a small business is an exciting idea that fills an individual with feelings of pride. And the freedom of being your boss is no longer a pipe dream for individuals. However, setting up a small business involves more than providing exceptional products and services. The startups must outlive for at least a year, or sometimes even more than this duration, without any profit margins, irrespective of how excellent the business model is.
One of the reasons why startups suffer from failure is insufficient financial knowledge. As a result, business owners come up with innovative ideas. Still, they lack the capabilities to stick to a budget and showcase their products or services appropriately. Not only this, but these professionals also succumb to the temptation of over-investing, meaning they spend a great deal of money to earn money.
That’s where the role of an MBA degree comes into play. The degree furnishes the individuals with cost-analysis skills and financial literacy, which are critically important to maintain balances and checks. Additionally, the courses in the advanced degree lay a firm institution for sound financial decisions, which are of paramount importance during the initial years.
Develop core skills
Often, small businesses are profitable; however, they fail to survive during the first few critical years of operation. And the cause for this failure doesn’t originate from the lack of a firm grasp of financial knowledge. Instead, startup owners hesitate to ask the clientele to pay them when the expenses are payable.
One of the many grounds entrepreneurs concur with such payment methods is they think they have no options left. While it’s true that the early years of a business venture are perhaps the critical ones, business owners don’t wish to turn away the clients by creating stringent payment policies. However, agreeing to prolonged payment collection methods won’t help a startup remain sure-footed.
Individuals who wish to set about the startup world single-handedly should first acquire vital skills. And therefore, the MBA courses can help individuals learn the significance of managing cash flow and develop negotiation skills. The courses also teach how to hold meetings and objectively state the business terms.
Opportunity to network
It’s generally agreed that a business degree doesn’t only provide individuals with educational credentials. It also provides a complete ecosystem where students can cultivate their skillsets during their careers. In simpler terms, an MBA degree grants students the opportunity to meet with like-minded people such as classmates, mentors, alumni, professional acquaintances, and guest speakers.
Even some individuals who choose to pursue MBA in an online format can reap the benefits of networking. Virtual education allows students to interact and stay in touch with peers, teachers, and other professionals.
Networking holds considerable importance in the entrepreneurial journey. Although startup owners, by no means, are immune to risks; however, these professionals count on reliable data and educated guesses before coming to terms with a business deal.
And that’s the reason why the famous proverb “it’s not what you know, but who you know” sounds true in this case. The network of classmates can not only prove to be great advisors. These individuals can also turn out to be potential investors or business partners. The connections you develop while pursuing an MBA can impart professional inputs and fruitful insights.
Is an MBA a worthwhile investment for entrepreneurs? The answer to this question is a reverberating affirmative, specifically if you possess the determination and perseverance to stick with your startup once you have launched it. An MBA is perhaps the best route for aspiring business owners to understand how to turn their idea – a light bulb above the head, into a reality, run it, and make it reach unprecedented heights.
This advanced degree offers heaps of advantages. Some of which encompass skills development, networking, and hands-on experience. And although MBA is beneficial, it’s never an alternate option for a startup’s exceptionally critical prerequisites. Meaning: the self-confidence to take chances. Nor does it render the passion required to bring an idea to life.
Remember, every startup comes with its fair share of challenges and pitfalls. Setbacks are inevitable, and there will always be adversities. Nevertheless, an MBA degree equips you with the right resources and tools to resolve issues and stay dedicated. Not only this, but it also allows you to hone your leadership skills.