The Difference Between Running a Business and Starting One
Will an MBA make me a better entrepreneur?
Anybody can be an entrepreneur. Passion and tenacity is more of an indicator of entrepreneurial success than a college degree. There are even famous examples of successful entrepreneurs who had no college degree at all.
You don’t need an MBA to found the next Facebook or Twitter. The specialized training you receive, though, will make you a better entrepreneur. Here’s why.
The top venture capital firms will tell you that the founding team is the most important thing they look at when considering an investment in a startup.
Entrepreneurship is not a solo sport. MBA graduates learn to work with people from diverse backgrounds and skill levels. During their education, they’re often forced to collaborate with other students who have mismatched skills.
This learning experience is what can make or break a startup team.
Dealing with Impossible Deadlines
Anybody with an MBA can tell you at least one story about a professor who gave them an assignment with an impossible deadline. MBA professors aren’t sadistic. There’s a method to their apparent madness.
Impossible deadlines reflect what happens in the real world. Startups careen from one potential catastrophe to the next, and the only thing that keeps them moving forward is the ability to embrace the hard work caused by seemingly unrealistic deadlines.
This is an experience you want under your belt before you start a company.
Learning How to Fail Fast
As an MBA student, you’re taught to test an idea and quickly abandon it if it’s not viable. It’s all theory, so there’s nothing to risk.
Acquiring this mindset is crucial for entrepreneurs. In the real world, you can’t be in love with an idea that’s not viable. If it’s not working, you must let it go. Failure to do so can kill your company.
Do the Math
It’s required. By the end of your MBA education, you’re intimately familiar with financial statements. You can set up a business operation pro forma spreadsheet in your sleep. You’ve analyzed balance sheets, P&L statements, and cash flow spreads.
This skill is invaluable, and entrepreneurs without an MBA are at a distinct disadvantage if they can’t run the numbers for the business they’re trying to create.
Making the Pitch
There’s more to a business than developing the idea. Many entrepreneurs nail the product development aspect of a startup, but they’re incapable of moving it forward after that.
Developing an idea is the easiest part. Selling the idea to new team members, investors and customers is what will make it successful.
An integral component of an MBA program is the study of sales, marketing and distribution. All those practice sales pitches for theoretical companies prepares you and builds up your confidence.
By the time you get your degree, you will probably lose count of the number of business studies you’ve read and dissected. That time will not have been wasted.
You’ll have learned alternative ways a business can be structured to operate. You’ll have studied the thinking behind leadership at large companies. It prepares you to model success and avoid mistakes.
A Taste of What’s in Store
MBA programs are known for keeping you in a constant state of competitiveness. For many, it’s their first exposure to the sort of raw ambition that’s common in the world of business. The push to work and think harder by fellow students is valuable preparation. It germinates quick action, and it prepares you to win the big race.
The strong relationships you build with fellow MBA students will follow you long after you graduate. You should try to stay connected to as many of your classmates as possible.
In the future, they’ll act as resources, introducing you to others who can help you build your business. Maybe even the people who will fund your company.
There’s More to a Business than Founding It
What good is a brilliant business idea if you don’t have the education and skills to transform it into a successful enterprise? When you complete an MBA, you have the tools to do this.
You will clearly understand management theory and the essential concepts of business planning. You will understand what differentiates a winning strategy from a losing one. Entrepreneurial actions are only the first step. It’s the structured thinking of an MBA education that increases your opportunity to be successful.