Want to start a business but don’t have a degree?
The good news is you don’t need a degree to start a business. A full 56% of entrepreneurs didn’t graduate from college — and their businesses succeed and fail at roughly the same rates as everyone else.
Still, starting a business is challenging. That’s why I recommend the lower-risk path of starting as a side hustle.
In this article, I’ll share:
- Myths and realities about starting a business — with or without a degree
- How to find and validate business ideas quickly — and set yourself up for success
- Alternative resources for business education — that cost way less than a degree!
Ready? Let’s do it!
Starting a Business without a Degree: Myth vs. Reality
Starting a business without a degree can seem daunting, but it’s important to remember that many successful entrepreneurs don’t have one.
People love to point out uber-wealthy college “dropouts” like Bill Gates and Mark Zuckerberg as proof that education is overrated.
And with the cost of college skyrocketing, I can’t blame them. Besides, most degree programs focus on theory and strategy, rather than specific skills.
Instead, you could take even just a fraction of your would-be tuition money, and use it as seed capital for your business.
But whether you have a degree or not, starting a business is still a challenge. You still have to learn the skills of an entrepreneur, or what Nathan Barry calls “The Ladders of Wealth Creation.”
Most of us start at the far left ladder, trading time for money at a job.
The most common next step is to run your own service business, usually starting as a side hustle. As your skills and income expand, so does your earning power.
How to Find and Validate Business Ideas
One of the biggest challenges of starting a business is coming up with an idea. (If you already have your idea, feel free to skip this section!)
Otherwise, here are some exercises that can help:
- Look for problems people are already paying to solve. Look for pain points in your own life, or talk to friends, family members, coworkers, and business owners to see what issues they’re facing.
- Identify gaps in the market. What products or services are in demand but hard to come by?
- Take inventory of your skills and expertise. What do you know more about than the average person? What do other people ask you for help with?
- Use your passions or hobbies. What do you enjoy doing in your spare time?
- Tap into trends. It’s easier to catch a rising tide of demand, rather than create demand all on your own. We call this “The Piggyback Principle.” Take a look at sites like Exploding Topics to see what’s trending.
You don’t need a never-before-seen idea. In fact, something like that can be risky since there’s no precedent or validation in the market for it.
In that sense, competition is actually a good thing because it means another company has already proven that people will pay money for it.
Execution matters far more than coming up with the world’s most unique idea.
Do You Need a Business Plan to Start a Business?
While every business should have a rough “plan of action,” you probably don’t need a formal business plan. Business plans are most commonly presented to bankers or investors if you’re trying to raise startup money or take out a loan.
Since the vast majority of businesses — especially side hustles — are bootstrapped, an “official” business plan is unnecessary.
Instead, consider the simple CPSO planning framework from Dane Maxwell’s book, Start from Zero. It stands for:
- Customer — who do you serve?
- Pain — what problem to you solve?
- Solution — how to you solve it?
- Offer — how much does it cost?
While a college degree program may teach you how to write a business plan, it’s more important to test real offers with real customers.
At the end of every episode of The Side Hustle Show, I ask my successful entrepreneur guests for their “#1 tip.” The most common response?
In over 500 interviews, not a single guest has ever mentioned “write a formal business plan” or “get a degree.”
Solve problems and figure things out as you go.
The Customer Test: Do Your Customers Care Where You Went to School?
Think about the last 5 products you purchased. Did it matter if the creator of those products had a degree?
Think about the last 5 services you paid for. Did it matter if the service provider had a degree?
If I’m going to the doctor, yes, of course I care that they had a good education. But if I’m hiring a house painter, I really only care if they can do the job well.
Put yourself in your customer’s shoes to see if a degree is really that important. In most industries, your customers don’t care whether or not you have a degree, only whether or not you can solve their problem.
From Zero to Launch
Once you have your business idea, the next step is to validate it — with real dollars — as quickly and as inexpensively as possible.
Pro Tip: Give yourself a tight deadline here. Procrastination can kill a business idea before it even gets off the ground.
What does that look like in practice?
For service businesses, it means finding your first client.
For product businesses, it means finding your first customer. You may even be able to pre-sell the product before you create it. (I’ve done this with a couple digital products — it reduces the risk of building something nobody wants!)
For content businesses, it means finding your first email subscribers. Start with your own network to see if anyone is willing to opt-in.
One exercise I’ve found helpful is to convince myself that every new project is “just an experiment.” I tell myself, “I’m going to test this out and see what happens.”
Apply the same mentality to your new business, and it will lessen the sting of the inevitable failures and setbacks along the way.
Get Real World Experience
I remember a conversation with my well-meaning college advisor. She was encouraging me to take more classes in the entrepreneurship program, since I’d expressed interest in that area.
But doing so would have:
- delayed graduation
- cost thousands of extra dollars
- eaten into the time I had for internships and other projects
I decided to skip those classes, reasoning I could probably learn more about entrepreneurship faster by actually running a business.
By doing so, I learned how to:
- Connect with customers in-person and online
- Price my service
- Negotiate better terms
- Work with vendors and team members from all around the world
- Build standard operating procedures
- Manage the business’ finances and make strategic decisions
- Navigate the ups and downs of entrepreneurship
The real world offers valuable lessons that no textbook or degree can teach you. You can learn more about business by starting a business than you ever could in a classroom.
Alternatives to a Degree
Most of my business education has come outside the classroom. (And sadly, I had to learn a lot of lessons the hard way!)
But the cool thing is, there are tons of resources to help you learn the skills you need, including:
- Books (I mentioned Start from Zero above; $1,000 100 Ways and The Side Hustle are a couple of my titles.)
- Podcasts (Check out The Side Hustle Show!)
- YouTube videos
- Online courses (This “Entire MBA in 1 Course” is a popular class on Udemy.)
- Mentorship programs
- and more
And they ALL cost way less than a college degree!
Pro Tip: Practice “just in time learning.” This is where you learn the skills you need as you need them, rather than filling your brain with information that might be useful someday, but isn’t relevant at the moment.
The bottom line is you don’t need a degree to start a business. If you can solve problems and provide value to your customers, you can build a successful business regardless of your educational background.
Ultimately, success in business requires hard work, persistence, and a willingness to learn.
A degree is simply an unnecessary (and super expensive!) permission slip. Instead, give yourself permission to take action and adjust course as needed.
If you have a passion for entrepreneurship, don’t let a lack of a degree hold you back. Hustle on!
Serious About Making Extra Money?
- Start Your Free $500 Challenge. My free 5-day email course shows you how to add $500 to your bottom line.
- Join the free Side Hustle Nation Community. The free Facebook group is the best place to connect with other side hustlers and get your questions answered.
- Download The Side Hustle Show. My free podcast shares how to make extra money with actionable weekly episodes.
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