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Starting a Business: Is an MBA Indispensable?

On this site, we often discuss about being the best employee you can be, but we also cover starting a business too. We recognize that not everyone makes the best employee with a boss to worry about. Also, it’s quite possible that at some stage in your working life you’ll have a business, and other times, you might accept a job working for someone else. Both are equally valid choices and have their place when willing to risk more or accept a steady paycheck.

In this article, we consider whether or not you must have an MBA to start a business.

First of All, what is an MBA?

A Master of Business Administration (MBA) is an advanced master’s degree. It covers a number of topics and usually some elective subjects that the student can personally select.

The core subjects usually include financial management, operations management, strategic planning, communications, and other useful topics. The idea is to provide a complete business education that’s useful when involved at higher levels within an organization or as a business owner.

To get a better idea about which colleges have an MBA course, you might be interested in attending The MBA Tour. Here is list of programs that can help you begin your research journey.

Is the Financial Knowledge Indispensable?

Financial know-how is not to be easily dismissed. Many businesses run into trouble early on because of mismanaging their finances.

New founders overspend on the office lease, furnishings, office equipment and more. Then sales fail to materialize as quickly as their overly optimistic projections and suddenly they’re facing a very real cash crisis where there’s almost no money left. At that point, finding new investors or a bank willing to lend money with no profits to show in the business is a tall order. Many companies don’t survive this moment in their short history.

Not having any financial knowledge is a bad approach to take with a business. An entrepreneur at least must have taken a short course focused around the basics of company financials or specifically relating to starting a company. However, is that enough?

The type of subjects that are covered within an MBA does include company finances. It is admittedly more focused around larger companies and may even discusses bond issuances on the bond market, finding investors, and other related topics. However, it still is extremely useful to provide a fully fleshed out understanding about how to manage company finances.

Will a Lack of Strategic Thinking & Effective Planning Make or Break My Business?

Most people don’t know how to think strategically, especially not from the perspective of a business.

Competing with other experienced companies when you’re getting started and don’t have the funding to challenge them on a level playing field is no picnic. From this perspective, acquiring knowledge about how to think in a completely different way to outsmart your competition is invaluable. Even indispensable.

The lack of strategic planning to predict what will happen in the future and plan for it is the downfall of many businesses. Similarly, being unable to create a solid plan and then execute it leads to analysis paralysis while the business’s financial state worsens with inactivity.

Exposure to smart educators who can clearly articulate how to think in a strategic manner and its applicability to business situations is where much of the value from an MBA is received. Indeed, their discussion of case studies that go over business problems, marketing challenges and other recent business situations is an eye opener for many students.

Do People Skills Matter as Much as People Say?

Learning to be a better communicator with people from all walks of life is an acquired skill for people who aren’t gregarious by nature. Even a natural introvert can learn to be selectively more outgoing to relate and communicate better with new people. That applies even if they climb back into their protective bubble in between spurts of necessary communication.

Having ideas as the owner of a business is great. But when needing anyone else – an employee, a service provider, a supplier – to do something for you, it’s necessary to communicate it. And while it’s said that some millennials are so used to digital communications that they lack something in the person-to-person realm, that won’t cut it in business. Deals are still done in-person at least some of the time.

An MBA will also teach business lingo in a way that’s hard to get from books alone. Sounding like you know what you’re talking about is often about a combination of (projected) confidence, being knowledgeable and presenting your points persuasively.

Ultimately, it’s fair to say that an MBA is not totally indispensable for an entrepreneur to have. However, it will go a considerable way towards bridging any gaps in either knowledge or business experience. Also, the confidence it provides has a knock-on effect in convincing others that your company is worth doing business with.

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