A few years ago, I debated getting an MBA.
A lot of my friends were doing it, we have some world-class schools nearby (assuming they’d even let me in), and it seemed to be a solid investment in education.
I had this fear that without this extra credential or degree, I’d somehow be left behind.
For the most part, I’ve always been comfortable in school. I was a good student, and the structure of education made inherent sense: you show up, learn what you’re supposed to, and then pass a test.
If business is scary, school is safe.
But what would an MBA get me? Perhaps I’d look more attractive to potential employers, but I was already self-employed and had every ambition to stay that way.
Would the material I’d learn be so earth-shattering that it would skyrocket my business to new heights, moreso than investing those hours and dollars directly into the business itself?
Ultimately I decided not to pursue the MBA, but have become fascinated by the “is college worth it?” debate.
What’s a Degree Worth?
The Bureau of Labor Statistics paints a rosy picture of the value of education:
(And they may have good reason to. According to some Congressional Budget Office estimates, Uncle Sam could earn $100 billion or more in student loan interest over the next 10 years.)
But according to the government data, higher education graduates earn significantly more than their degree-less peers, and enjoy much lower unemployment rates.
Over a lifetime, those differences can add up to massive chunk of change, with college grads earning $1 million more than high school grads over the course of their careers.
And since no tuition (yet) costs $1 million, a degree is still a purchase that makes sense, right?
There are a couple potential problems with that argument.
Costs vs. Benefits
The first combines the spiraling cost of education — roughly $37,000 for a 4-year degree at a public university and increasing at 8-9% per year — with the flat-lining value of that degree.
Perhaps the rising tuition costs are merely a reflection of a marketplace inefficiency; they’re just catching up to what value they provide. After all, colleges aren’t suffering any enrollment shortages, and by definition, people wouldn’t buy something they didn’t think was worth it.
But what the BLS chart above doesn’t show is that while tuition keeps increasing, wages are flat. At a certain point, it’s a trade that no longer makes sense.
Maybe we’ve crossed that point already. Maybe we have a few more years to go. Either way, the trend can’t go on forever.
Meet the New Boss…
The second problem is the rise of the freelance economy, which is expected to encompass 40% of the workforce in the next 5 years.
I call this the “who you trying to impress?” dilemma. If a degree is a golden ticket to a traditional 9-5 corporate job (hey I can’t fault it — that’s the path I took), but people will increasingly be working for themselves, who’s going to care about your diploma(s)?
Employers may still value the degree, but if you’re going to be your own boss (by choice or by necessity), do you really need it?
But after that little preamble, what I really wanted to do in this post is get some expert opinions on the merits of earning an MBA vs. starting a business.
All Those in Favor
Chris Deardorff | The Market Compass
I self-funded my MBA (and still am via student loans) as I went back full-time. It was a fantastic experience and something I absolutely do not regret doing! It did payoff quite a bit in terms of ROI as it doubled my corporate job salary right out of business school.
If I were to do it all over again, I think I would have maybe tried to start my own business first for a couple years right out of undergrad and even gone through an accelerator (though they didn’t really exist back in 2005). I’ve heard a lot of people deciding to do this instead of an MBA. Interesting enough, my most enjoyable and valuable part of my MBA program was going through the entrepreneurial track so take that for what it’s worth.
Ultimately, I would still recommend an MBA for people trying to start a business as I do think it adds value (provides business fundamentals, frameworks, and case studies to learn from) and also lends credibility to your professional reputation.
In terms of it helping my specific startup, it’s hard to say at this juncture. I think it does help in some cases (i.e. credibility and already having that business background) but I know a lot of people in the startup world (my target market), and even the corporate world in some cases, are put off by MBAs because they automatically label them as being theoretical vs. having real-world experience. Now, there’s absolutely some truth to this but I don’t think it’s fair to automatically place this label on all MBAs.
All that to be said, I think there’s both pluses and minuses in how beneficial an MBA is in the startup scene but at the end of the day, I think it having one helps someone more than hurts them.
Sean Higgins | ilos
I’m Sean, MBA from the University of St. Thomas and a founder at ilos, a Techstars company.
The biggest point I can strive here is that these aren’t mutually exclusive paths.
My MBA taught me more about communication than 30 investor pitch meetings (I’ve had them too). You also learn the essentials of being a business (5 forces, sustainable competitive advantage), and your way around a term sheet.
Startups teach you how to do things. Every day on the job you’re faced with undefined problems and need to create your own solutions. They are the ultimate testing ground for ideas and where you learn very quickly what you know and what you need help with.
Theory and Practice make a winning combination.
I went to get my MBA after about a year out on the job in corporate. I had a 90th percentile GMAT score and got a good scholarship to go back. My classmates went on to get 6 figure jobs at corporate, which would pay for their degree pretty quickly.
As for my ROI? Hard to put a value on waking up every morning excited about going into work, but I can tell you it’s pretty darn high.
In early 2008 I was in a corporate fashion role but was frustrated by the lack of growth opportunities and salary the company was able to offer.
And given the recession, opportunities for a new job elsewhere seemed grim so I decided to get an MBA at the University of Michigan and started in Fall 2009.
I was fortunate to ave my tuition fully covered by a grant, though I had to cover living expenses which I mitigated by completing my MBA in 1.5 semesters instead of 2. During my third semester I was offered a position with a salary that was over twice what I made prior to getting an MBA. This provided a strong baseline for negotiating future salaries and within 5 years have been able to make 3 times what I made in my pre-MBA role.
Money aside, the skills learned from the MBA program has helped me grow professionally and personally. For those considering starting their own businesses, I still encourage getting an MBA, not only for the skills but for the network you gain. Also, many programs offer startup incubation
programs with funding and mentorship.
Adam Kirsch | Yorango
In addition to studying full-time at Cornell University, I am CEO of Yorango, a developer of software for property management and leasing. Before Yorango, I cofounded Daily Beat
In my opinion, the MBA was definitely worth it and highly complementary to my startup. A formal business training gave me hard skills bolstering my self-teaching, and many of the things I learn in class I can try immediately in my business. Johnson, Cornell’s MBA program, was also highly beneficial in and of itself. I had access to dozens of subject matter experts in my professors, and the school’s accelerator program gave me credit, capital, and top-notch coaching from experienced entrepreneurs and investors to launch my business.
Tuition at Cornell is around $60,000 per year, and I did not have the benefit of a company sponsoring my education. I had only a small amount of debt from my undergraduate education and virtually no other debt, so I felt comfortable taking on the MBA’s financial burden.
Yvette Best | Best Services Unlimited
I had started my business before I received my MBA and my business did well. However, I went back to school and finished my MBA this year at Belhaven University, and my business is better. The education I received helped me work smarter at my company and I received better tax clients.
My tuition was $20K which included my textbooks. My full-time job paid $12K, and I paid the rest.
I believe a young entrepreneur should start their business and pursue their MBA part-time. The ROI is greater with this combination. They are pursuing their dream as well as investing in lifetime learning that will help sustain business longevity.
Ruthann McKenzie | Just Be Confident
I’m in school right now, and even though I’m the founder of my own company (we teach and train women to create and implement their big dream in order to move forward in life confidently), I’m excited by what I’m learning and implementing already.
Nothing fully replaces hands on training, but the MBA degree is still worth it. Currently, I pay $23k a year for my schooling and I am enrolled part time. The ROI I expect to receive will be invaluable as I am already able to help other start ups with the knowledge I have acquired.
Tyler Brooks | Analytive
I’m actually an MBA and an entrepreneur. I went back for an MBA after being finished with my undergrad for just one year. For me, it was an opportunity to help break into a new field (digital analytics).
The ROI long term is going to be fairly large, although it’s hard to quantify that exactly. However, working in a highly technical and quantitative field, I rely on the MBA a lot. It’s not been so much the skills that I learned, but mainly the credibility it adds during sales pitches and meetings.
I paid for the MBA on my own. If you can get an employer to pay for the degree, you should absolutely do it! As an entrepreneur, it’s hard to determine if I received a “pay raise”, but it has certainly helped me grow my business.
Scott Gabrielson | Oliver Cabell
I am the founder and CEO of a new fashion label focused on end-to-end transparency and challenging the way the industry prices its products.
I also just graduated from the full time MBA program at the University of Oxford. The decision to get an MBA before starting a company was a deliberate one. It allowed me to:
- Expand my skill set
- Expand my network
- Provide a nice Plan B if the startup does not work out as hoped!
Jesse Till | Chatter Buzz Media
I actually have an interesting story regarding getting my MBA. I first studied audio engineering and music production. Once I got my bachelor’s, I decided to take on a Master’s degree in Business because I wanted to know everything behind the music industry (writing contracts, copyright law, etc.).
It was there though that I began fine tuning my marketing and general business skills. Though I got my MBA on a full scholarship, it not only helped become a fundamentally sound entrepreneur, helping me in my musical career, it actually landed me my current job.
Though the pay raise isn’t there (yet), my intangibles with an MBA gave me clout in the office and having the MBA made me look like a cut above the rest of the resumes sent daily to the agency I work for.
In a nutshell, my MBA gave me working knowledge of how businesses work and landed me a sweet gig at a company I like to work for.
Bruce Ailion | Atlanta Real Estate
It’s an easy answer. If you have an entrepreneurial desire you should do both. In my case I have a BBA, MS in Real Estate and Urban Affairs and a JD and run a number of businesses. I am too independent, opinionated, risk taking to fit into the MBA corporate environment.
Increasingly I run across people like me. Last night I spoke with an MBA who just bought the auto body shop I was taking my son’s car to for repairs. His comments, “with an MBA I never thought I’d be running a car shop.” Harvard MBA’s are making money running Waffle House or owning and managing mobile home parks.
There is little job security, little control of your destiny in corporate America any longer. Applying the lessons learned in an advanced business education helps take the volatility out of small business and brings the management skills needed in small business.
My brother did not attend college. I assisted him establish a retail and manufacturing business. Over time it grew in size and complexity. From time to time I would assist him with business issues, at those times he said he wished he had received a more formal education rather than education from the University of Hard Knocks. Advanced business education helps avoid some of the bumps along the way to success in small business.
And Those Opposed
Tasha Mayberry | Social Media 22
I have great respect for education and think it’s important, but because of the high cost of education in our country I truly believe that starting a business is better than pursuing your MBA.
I am a perfect example…
I have a BA in Legal Studies – left school with $40k debt. For a few years before I started my business I could not pay the nearly $1000 a month payment so I foolishly deferred. Now I owe $70k for my loans! ($30k more in accrued interest.)
I started my own web design, marketing and PR firm after I was laid off from working as a Paralegal. I planned on going to law school but after over a year of getting not one decent offer, I had to think about my transferable skills and a new career path.
I love to write and am very creative and about 8 years ago social media was really getting big so I decided on marketing and PR…and I am so happy I did! I am completely self-taught and use self-discovered strategies that I would have never learned in an MBA program or any college.
The best way I learned was through following the blogs of marketing pros. Even their books and paid training courses added up to be a much smaller investment compared to another degree, and the material was much more actionable.
We are on our way to making $1M a year in revenue and have a team of 6 employees. In just a few short years we broke $500k in sales.
So again, I respect education and IF it was more affordable then my answer may differ but getting out there and starting a business with the amazing tools these days we all have at our fingertips, this is the best way.
Scott Trench | Bigger Pockets
So we’ve all seen those studies about how much more money those with graduate degrees (like MBAs) make over the course of a 40 year career.
But the MBA *only* makes sense if you are planning on having a 40 year career working to make someone else rich.
Investors and those considering becoming an entrepreneur are, in my opinion, sacrificing nearly a decade of opportunity in pursuing the MBA. In most cases, the education will result in a significant financial delay in the form of lost earnings or mounting debt, and will result in opportunity cost, as the only reasonable option for the vast majority of MBA graduates is to take a high paying job with long hours at a corporation.
It’s this mentality of setting yourself up for 10 years at a corporate gig that scares many of us who desire to be entrepreneurs or to truly succeed while we’re still relatively young. Think about this – if you get a $100,000 – $200,000 degree from an elite school, the best case scenario for most of those looking to pursue an MBA, you are backed into a mental corner.
Every single option you had prior to getting the MBA now makes less sense except one: work a high paying job with long hours at a large corporation.
Julie Ann Wood | E-seedling
I started my first company, Check + Balances, an accounting system consulting business, when I was 27, and sold it 3 years later. I learned more about business in those 3 years than any other time in my life.
Learning how to run a business has so many complex situations and problems that can’t really be learned in school or during an MBA project.
Here are a 3 reasons why I believe that running a business is more valuable than a MBA.
- You are ultimately responsible for everything related to the business and in order to be successful you learn ways to exceed expectations of not only yourself but also your stakeholders, customers and employees.
- You learn how important cash flow is to keeping the business alive and in doing so learn ways to improve your cash flow turn such as invoicing faster and working with customers to find out when and who is responsible for payment.
- Every day as an entrepreneur is a learning experience, you never know what problems will arise that you will have to deal with so you learn to be flexible and how to solve problems creatively.
Shaun Walker | HEROfarm
I’m the 31-year-old creative director/partner at an ad agency here in amazing New Orleans. We understand the dire straits college loan debt can put students in. I, for one, would have twice as much debt if I had not received a simple out-of-state waiver.
I recommend jumping into the business world by starting a business, no matter how small, to get that incredibly valuable real-world experience that school can’t teach and you won’t learn any other way.
Of course, I’m not advocating the entire abandonment of college, as some are clearly still worth it. In addition, trade, specialty schools, and other 2-year programs are becoming more valuable, economical, and logical.
John Lyotier | Yo.com
I relayed this story over dinner last night when someone asked about my ‘story’ — curious about how I went from a degree in English and Art History to co-founding a tech company that now has a team of 80 and is on the verge of something special.
Back circa 1997/98, a few years post-graduation, I was contemplating going to get an MBA in a new and burgeoning field called “eBusiness.” I had a mentor at the time give me the following advice:
“Look at the syllabus for the MBA. For the fall semester, the books for the program have to be submitted in the Spring, which means that they have to have been written in the previous year, and by the time you actually get around to learning what is in the books the next year, the elements that you will be learning will be 2 years old.”
He then went on to advise me to take the 20 hours per week that I was looking at for the part-time program, and commit that as well as the tuition dollars that I had set aside and start a business. Any business. Read everything you can. Go to networking events. Learn while you live. Be willing to fail. And if I was to do all of that, for the next 2 to 3 years, I would be much further ahead.
For the past 15+ years, I keep contemplating going back to do an MBA, but every time I do. I just start a new business.
Kage Spatz | Spacetwin.com
The best education anyone can receive is through experience in the field.
If a person decides to get an MBA, that doesn’t change the fact that starting a side hustle is worth the time and investment. After 12 years of working with teenagers as a teacher, it is obvious to me that school is not for everyone.
There are many other ways to learn what is needed to become a successful business owner. The main point that needs to be made to someone considering an MBA or starting a business instead: consistently create the time to learn.
School or not, it’s time to hit the books, reach out to mentors and absorb as much as you can from those who are gracious enough to offer guidance in what you are looking to do some day.
Jessica Oman | Renegade Planner
I’m an MBA (2009) entrepreneur and I’ve been running my own business plan writing firm, RenegadePlanner.com, since 2010.
First of all, I believe that if someone is truly looking to have a good, secure job in a business field, an MBA is a safe choice. MBAs are marketed as leadership degrees, but they’re actually best for followers, who want to apply their skills towards the greater vision of a larger company. Nothing
wrong with that.
I don’t think an MBA is well-suited for entrepreneurial folk. Real-world experience is more valuable – plus, the skills required for entrepreneurship can mostly be learned for free or very cheap – through platforms like Udemy, through workshops, conferences, etc.
Tuition for my full-time program was $27,000. I received about $6,000 in scholarships and I paid the rest out of pocket.
Pay raise? Ha.
We graduated during the economic downturn, and our own career center staff were telling us we should take unpaid internships “just to get some experience.”
We were encouraged to work for $15 an hour or less to “get a foot in the door.”
We were told to “wait for opportunities.” As if.
Turns out entrepreneurship was the only choice for me.
Parker Stewart | Legendary Salsa
I am 26 with a BA in Management from Mississippi State University and an associate’s in Airfield Systems from the Air National Guard.
I contemplated heavily on whether to get my MBA or start a business out of college two years ago, and I ultimately decided to pursue the entrepreneurial route. My business is a gourmet food company called Del Viejo Gourmet, and we make the best damn salsa you will ever have in your life!
I have found that actual hands-on experience with starting from just an idea and creating something that people would love and trade their hard-earned dollars is infinitely more helpful to business acumen than out-of-touch case studies and theoretical reviews.
Jason Savedoff | RVA Advisors
I faced this decision and started a business, then several others. Never looked back… the reasons:
1. Value. I would have sought out a well-regarded (read: expensive) program and taken on something in the realm of $200k in debt. Sure, I probably would have increased my salary upon graduation, but instead I used the $200k to buy my first rental property. Now, 15 or so years later, it’s almost paid off and equates to a $20k salary increase without having to do much work at all.
2. Lifestyle. After stints in Investment Banking, Wealth Advisory, REIT’s, etc. I was through with miserable managers. Most folks get an MBA because it’s increasingly helpful in corporate America, which, to some degree, ties them to that path, and thus, quite possibly, to many more miserable
I enjoyed working in/with small businesses so much I founded a small business consulting and brokerage company!
Maimah Karmo | Tigerlily Foundation
I previously held the assumption that I had to have an MBA in order to climb the ladder and be successful; so, I began pursuing an MBA.
After being diagnosed with aggressive breast cancer, I had to focus on my treatment. Everything else became secondary. While in chemotherapy, I found that there were several gaps in young adult oncology – education, diagnostics, treatment and survivorship, and I started my non-profit, which
is now nationwide and going global.
I realized through my experiences that I didn’t need to have an MBA. A lot of very successful entrepreneurs haven’t even finished undergraduate college. I believe that while there is a lot of
value in pursuing a college degree or an MBA, the success factor is driven by one’s passion and commitment to the vision, not school name or level of education. I have also written a book (Fearless: Awakening to My Life’s Purpose Through Breast Cancer), publish a digital magazine, run a successful consulting business, and travel the country, speaking and empowering women.
No MBA needed.
Christopher Charles | Molding Money for Your Family
Unless there is a high probability of tangible benefits, use your time and money to start something on the side instead of getting a MBA.
At this point in time I regret getting mine. There’s no real opportunity for advancement with my company, and, to date, all of the interest I’ve gotten from other companies is for the same title I have now (at less pay).
It wasn’t terribly expensive since I went to a smaller state school — only about $13k and my employer did pay half of it. But I’m still not sure it was worth it. My bosses haven’t even acknowledged verbally that I graduated and I’m not the type to bring it up. I went back part-time since I have all of the usual adult responsibilities including two kids in high school.
In spite of the time and expense, the market is getting over-saturated with MBAs.
And Those on the Fence
Jeremy Schifeling | Break into Tech
I’m a recent Michigan MBA grad AND an entrepreneur – so I think the answer to your question is a definite maybe… :) What I mean by that is it all depends on where you’re coming from and where you want to go.
For me, the MBA was a huge boost because I started my career as a kindergarten teacher and wanted desperately to break into the tech industry. But no amount of applications or networking could get me anywhere close to that goal since recruiters just wrote me off as unqualified. And
yet, a few weeks into my MBA program, those same recruiters were now ***asking*** me to apply, even though I was the exact same person I’d been all along.
Because those three little letters next to my name suddenly signaled that I was qualified. And sure enough, I ended up getting offers at all the same companies (Amazon, Microsoft, Apple, LinkedIn) that had once rejected me without a second glance.
On the other hand, I’ve been asked by dozens of younger colleagues in the tech sector whether they should get an MBA. When I ask them where they want to go in the future, they usually say, “I want to stay in tech.” And so my response is always the same – “You’re already where you want to be, so you don’t need an MBA to break in.”
And you won’t even rise up the ranks any faster given that the two years you spend in business school would be two years that you’re gaining valuable industry experience, which is even more important to recruiters. So save $300,000 (tuition + your salary) and just keep doing what you’re doing!
Marc Prosser | FitSmallBusiness.com
I used to work for a company that had an informal no-MBA rule. The CEO tended to think most MBAs were know-it-alls that had trouble learning from actual experience. But as the company grew, and especially as the finance side of it expanded, that rule broke.
MBAs are not necessarily the best for starting a company where you need to be constantly reacting and reorganizing. In that case, you’ll often have to rely on your gut feelings rather than learned knowledge. However, there are certain skillsets MBAs are terrific at. Those skillsets tend to be valuable at larger companies.
With MBAs costing around $100k, you could easily spend the same money to start a company and gain valuable real world experience, as well as the hands-on skills that many employers value. But there are situations where an MBA might be valuable. If you’re working at a big company and your career has stagnated, an MBA might be the right move to jump-start your career and get people to look at you differently.
Zack Pennington | Collabra Music
I started 2 companies while in the Entrepreneurship MBA at UofL and am now working on a 3rd startup. All three businesses are still up and running.
I have mixed feelings about the value of the MBA program. I met a lot of wonderful people (including my girlfriend and my co-founders) I traveled the country pitching and winning business plan competitions, and I learned the vocabulary and concepts needed to explain my business at a high level.
But I’m not sure any of that really prepares you for the ups and downs of running a company. Starting a business is like jumping out of a plane and trying to design and create a parachute on the way down.
If your ultimate goal is to start a company, do that first. Then, if it makes sense later, get your MBA. And get it from a highly competitive program, because the network is where most of the value comes from, not the letters at the end of your name. I don’t even put MBA after my name in most situations because it’s more common now.
My tuition was $31k, I was on a work scholarship with the university that covered my tuition and a small stipend. I started working on my first company, US Chia, full-time after graduation and have been an entrepreneur ever since. I recently joined Collabra, a music-education software startup as their CMO.
Adelaida Diaz-Roa | Ruffit Dog Carriers
The safe route would of course be MBA, but… if you’re thinking of being an entrepreneur you probably wouldn’t be thinking about the safe route!
In terms of pure learning, you learn WAY more actually starting a business yourself than in any class. My suggestion would be to start a business your senior year of college and give it a few months after graduation before deciding on getting an MBA. If you can make your business successful then stick with it and maybe start another down the road.
How I see it is that MBA are only worth it if you want to go into corporate America or if you go to a top 10 program for networking purposes (which is my plan).
A little about me: I started with my first startup my freshman year of college, started the second one last semester of my senior year and now I’m on my third one. I’m planning to apply for an MBA next summer but my reasons are 20% for what I’ll learn and 80% for networking.
I believe if you’re wanting to learn about business the best way to do it is to create or join a start-up to apply everything you teach yourself online. This will help with retention and will most likely get you to learn more in depth about the subject since you’ll be needing to fully understand it when applying it.
Not only will you be able to use the things you want to learn but you will also learn as you go about things you never even knew about before, owning a business is definitely the best way to learn in my opinion but equally important is knowing the right people to help you along the way which is where an MBA in a great program may help.
Norma Dompier | Red Bike International
I do not have an MBA – am an entrepreneur. I have had 3 different businesses and currently do business coaching/consulting.
My recommendation, instead of an MBA, is to take a really good Leadership program. It helped me develop the skills and mindset I needed to run my consulting business – and I teach these principles now to many of my clients (some who are business owners and some who have MBAs).
I wish I had taken the course earlier in my life! I know a lot of MBAs that aren’t able to take their learnings and put them into the context of running their own business because they didn’t learn the mindset that’s needed.
Greg Archbald | Greasebook
I’m the founder & CEO of an oil and gas tech company known as GreaseBook. We work with dozens of oil & gas companies of all sizes.
I attended a top-ranked global MBA program on scholarship in Barcelona, Spain.
Let me first start by saying this: you’re absolutely, 100% correct. There is no better business education than starting your own business. That said, upon beginning my MBA program, while I knew enough of the right things to say to get accepted, I had no clue what I actually wanted to do upon graduating…
However, only when faced with choice of internships over summer break with consulting companies and investment banks OR starting my own business (and log a little extra party-time while in Barcelona ;-P), did the answer become undeniably clear.
So, 6 figures later what did my MBA buy me? My new network isn’t really suited to help me in my current endeavor (I’m from Oklahoma and work in oil & gas…), nor was I able to capitalize on a 6 figure salary upon graduation. But, it did grant me clarity. And fluency in a second language. And an intimate knowledge of another culture, country, and city.
Could I have gotten all this for less than 6 figures? Without question. But, my MBA also bought me confidence… confidence in knowing that if my business ever failed (which it won’t), I’ve positioned myself to be extremely competitive in any type of job environment anywhere in the world (Europe, US, or Latin America).
Maybe the best avenue for your readers would be to hedge their bets. Take the money they’d spend on an MBA and sink it into 3 or 4 business ideas. Go in with the expectation that you’re going to lose this money, that it’s money spent toward the best business education possible: starting your own business.
That said, if you’re really cut out to start your own business, the savvy entrepreneur will quickly realize it doesn’t take money to start a business and most of the risk can be removed… unfortunately, from what I know, no MBA includes this type of info in its curriculum.
Rob Marsh | Logo Maker
I have an MBA and have also started a business.
I think the answer to your question depends on the goals of the person asking it.
If you want to work at a big “safe” corporation like Microsoft or GE, you’re much better off getting an MBA. In my experience (I worked for HP for 5 years) big companies don’t respect the kinds of skills and learning you get from starting and running a small business. And that’s too bad, because so many large corporations could use some entrepreneurial thinking.
If you want to have an impact at a smaller level, or run your own business, you’ll learn by doing. Getting an MBA will teach you a lot of theory and help you make some great connections, but the real education is in executing your business idea.
I’ve done both. I paid for my MBA (from money I got from a successful startup exit). I did it (part time) thinking I needed the education to start and run a business. I don’t have any regrets earning my MBA, but I was wrong in thinking I needed it to start a business.
Given how expensive an MBA is today and how inexpensive starting a business can be, my advice to someone thinking about an MBA as a pre-requisite for starting a business is simply—skip school and get to work.
Bill Fish | ReputationManagement.com
I am the founder and president of ReputationManagement.com. I got involved in the world of entrepreneurship rather quickly after college, so I did not get a MBA. Many of my colleagues and friends have gone that route, and I’ve always been a bit envious, so I tend to have plenty of discussions about the process and the value.
My consensus is that it never makes sense directly after your undergraduate degree. You need to get out an immerse yourself in the work force. Yes, you can learn about aspects of business in college, but you only truly learn business by being in the day to day grind.
If after being in the job force, your employer would be willing to pay for you to go back to school, this could be an excellent opportunity for you to better yourself with someone else footing the bill.
However, there is a caveat. Male or female, if your family is planning on having a baby during the time you would be earning that MBA, it doesn’t make a lot of sense for the marriage. I’ve personally seen one marriage end over it, and one came close.
There are only so many hours in a day, and working full time as well as going to school doesn’t leave much time for family, and having a child should be the most special time you can spend with your spouse.
Beyond that circumstance, if an employer is going to pay for your education, its difficult to say no, and something that can be used to your advantage in your career.
Peter Cuderman | PR Zebra
An MBA is completely worth it, but maybe not today.
I am both an entrepreneur and a recipient of a Masters in Business Administration. I graduated undergraduate in 2 years and went right into my MBA before starting a business so my situation is a little unique. However, I see many people stuck with the choice between the two.
My MBA cost approximately $50,000, which is far under the typical cost for individuals paying out of pocket. My immediate ROI was a job that paid me over $100,000 after bonuses, but I was the kid who grew up with lemonade stands and trying to sell newspapers. I was eager to start a business.
Today, two years outside of B school, I own a successful Public Relations practice where I implement a lot from what I learned in school. Most of what I actually took from B school was the success stories of individuals.
My point is that you can learn everything you need to know about business with a high school diploma and zero debt. Heck, one of my largest clients owns an Air Conditioning business, never went to college, and has been on CNBC for a television show.
Side Hustle Nation Weighs In
Finally, I posed the question in the Side Hustle Nation Facebook group to get some insight as well. Here’s what came back…
Robert Farrington | The College Investor
MBA here – I recommend starting a business.
I got my MBA but my employer paid for it. Is it worth it? If I had to pay for it out of pocket, no. But since it was free – sure, it was worth it.
But I learned a hell of a lot more starting and running my side business than anything taught to me in MBA. And, for reference, my MBA was focused on entrepreneurship, lol.
The most valuable part was the network.
I tend to agree w/ Gary Vaynerchuk when he says that MBAs and degrees in entrepreneurship are the biggest wastes of money. It’s ridiculous to spend $60k + to get an MBA for a $3000 a year pay raise.
And we shouldn’t fool ourselves into thinking it’s about the connections either. You and I met at a conference almost 2 years ago and spent the cost of a single college class (or less).
I’ve got an MBA and an MS in Software Dev. It helps me get jobs and promotions, but I really didn’t learn that much. I basically got my MBA while I was trying to figure out what I wanted to do… it is helpful for teaching as a side hustle at the local colleges and universities, I guess I’ll get my ROI from that.
I paid for the MBA myself, but I overloaded and did it in 1 year full-time so it wasn’t too bad. The MS was paid for by my employer, so it was free. I will always recommend free school, if for nothing more than the networking.
Candice Marie | Young Yet Wise
I had been invited to one of my dad’s friend’s dinner parties. Mid-way though stuffing stuffed shells into my mouth, a man to my right asked, “So… Candice, when are you getting your Master’s degree?”
“I don’t plan on getting my master’s degree,” I responded.
He was a little surprised by my response. A sense of shock, or disbelief as if I were a five-year-old telling him that I didn’t believe in Santa Clause.
The only time I thought about getting my master’s was when I graduated and I didn’t know what I would do next. It would of cost me $38,000. I didn’t do it.
I believe that you can learn more by doing. It’s even said that people only remember 5% of what they learn when they’ve learned from lecture.
I completed my MBA in management and strategy in 2012. I was self-employed at the time( I still am) and was in a transitional period in my life. I took out 40 K in student loans to complete the program. I chose a 100% online program as that allowed me to continue to work full time while I completed my degree.
The pros: I thoroughly enjoyed the program and I will say that getting my MBA changed everything about how I look at business. I can’t walk into a retail store, restaurant, or any other business without thinking about the supply chain, marketing etc.
The cons: It was only after I completed my degree that I discovered many of the online teachers in the area of information products, digital marketing and passive income. Knowing what I know now, I could’ve spent about $5K on education in very specific areas to accomplish the goals I have now set for myself.
So, in my opinion, is it worth it? If your employer is paying for it? Absolutely yes. If you have to go into further debt to receive the degree? Absolutely not.
In the corporate arena I think the piece of paper of a degree is still valuable, however if you are an entrepreneur like myself, I would strongly consider the specific knowledge that you wish to acquire that you think he will acquire with your MBA and investigate other educational resources that will save you a lot of money. I would be debt free now if not for that additional student loan debt!
My employer paid for my MBA. After 5 years, I don’t think it was worth it.
Have an MBA. Paid for it myself, slogged it out for two years to do it while working full time. Got me a promotion and a substantial raise but not sure it would help me start a business.
We always hear about highly successful entrepreneurs that say the MBA was a waste of time. But, in the corporate world, I wonder if it isn’t required to climb the corporate ladder.
Shawna Newman | SkipBlast
Mine was a waste of time and money. Sure, it got me a raise when I was working a cubicle job, but I make more now working from home.
My main hustle is making authority niche websites, which is basically just loads of content creation + making the actual sites.
I also have an MBA. Paid for it myself but I did the ASU online program so not as expensive as full-time. I enjoyed the program and don’t regret getting my MBA one bit.
But I can’t say it’s helped all that much in either my corporate or solopreneur careers beyond giving a little bit of extra credibility!
I am planning to get an MBA. This is primarily because I see myself moving into larger business in hopes to take my family overseas in the future. It’s much easier to emigrate with the backing of a larger company, particularly to the developing world. Not to mention the fact that I want to work within larger companies to reform what I often see as a ‘Toxic Culture.’
At the end of the day, the question is about where you want to arrive.
Do you have an MBA? Is it worth it?
Please feel free to share your thoughts below on whether young professionals should get an MBA or start a business — or both!