This may sound like a contradiction, but a business degree really isn’t necessary to run a business. Despite all the well-meaning parents out there who strongly recommend it, entrepreneurs are not “cookie cutter” business majors.
If business ownership is your aspiration, it never hurts to have an education, but a true entrepreneur makes his or her own destiny. You will rarely need an impressive-looking resume; and for that matter you really don’t need a degree at all. Believe it or not, one of the best things college can do is teach you discipline. You might also meet some valuable business connections while you’re there.
One caveat with respect to college degrees: If you plan to start a business in a professional field that requires a license, it will be necessary to earn a degree from an accredited university and pass professional licensing tests.
How can you learn how to start a business?
Absent the customary college course, there are plenty of online courses that can teach you everything from business plan writing to tax preparation. If you’re serious about business ownership, make some connections within your desired industry and ask a lot of questions. Most entrepreneurs will be happy to share their opinions on which courses are essential to your success. You can also find articles online or take out books from the library to learn the basics of buying a small business. Be sure to check out the resources on the Small Business Association’s (SBA) web site, www.sba.gov.
Raising capital
Funding a small startup business can often be the most challenging part of any entrepreneur’s journey, but there are ways to get smart about this without a college degree. The SBA offers numerous resources for small business lending, as well as specific tax incentives available to certain industries and regions. However, be sure you know a lot about the financial side of running a business before taking out any loans.
Any successful business requires a certain amount of money to run and operate, but a new business owner must be conscious of each expense. This may require a new way of tracking expenditures and cutting spending, but it will be worth it when you have the money to expand later on.
A college degree never hurts
Many people may argue that a college degree isn’t necessary, but it can be very helpful to have one before starting a business. For example, the education you receive may help you write a business plan, navigate contracts, read a profit and loss statement, or manage the books. It could also help you think, learn, communicate and listen, all of which are important aspects of entrepeneurship.
According to an Entrepreneur Magazine article, “Do You Need a College Degree to be an Entrepreneur?” a college degree is useful in establishing yourself in the eyes of investors and customers, but it also depends on the type of business you are in. Procuring that first dollar of venture capital or a small business loan may be difficult without an undergraduate degree. If you don’t have one, be prepared to “sell yourself” in other ways.
If you find yourself in a position of hardship, where continuing with your education is impossible at the moment, then do whatever you can to establish yourself in a particular industry. Join the Chamber of Commerce, connect with experts who can introduce you to the power brokers, offer to speak at industry events, or do some pro bono work that will build your credibility. However, if you can finish your education, take advantage of the opportunity. It will be a lot harder to do it once you get started in a business.
The facts about business degrees
Before you jump at the opportunity to earn a business degree, consider some of the following facts.
According to the bestselling book, Academically Adrift, 45 percent of college students don’t learn much of anything in their first two years. In fact, the book also suggests that one third of all college graduates make no improvement in their analytical or writing skills. Three of the majors identified as being the least “educational,” were education, social work and business. However, the same study found that students who majored in social sciences, humanities and the sciences saw market improvements.
Another survey from PayScale ranks business degrees among the lowest-paying majors, in 56th place, which was worse than some of the less practical degrees, such as History and Philosophy. One possible reason for this is that as a business major you would hardly stand out from the crowd of job seekers. Some evidence of this is shown in a study of Harvard Business School grads, who received a surprisingly low “quality of life” score 15 years after graduation.
In short, you don’t need a degree in business to own a business, or even to work in the corporate world. Most of the employers surveyed by the National Association of Colleges and Employers said they most valued the three skills that usually accompany a liberal arts education: Analytic Ability, Communication Skills and Teamwork.
If you’re on the fence about whether a business degree is necessary, ask some of the most successful entrepreneurs you know what they majored in at college. You may be surprised how few of them actually possess a degree in business.
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