How earning an MBA will help you as an entrepreneur
An MBA continues to be one of the most respected and most sought-after professional designations out there. It is also an education to which a great many entrepreneurs attribute their success. An MBA can be done either online or in-person, and it provides many of the foundational skills necessary for starting and running your own business. Below are some of the many ways in which earning an MBA will help you throughout your entrepreneurial journey.
Budget management
Entrepreneurs, especially when they are first starting out, tend to have very limited budgets. All financial decisions are high stakes because there is no corporation or institution to fall back on. Bad money decisions as an entrepreneur mean you don’t get paid. What this means is that to be a successful entrepreneur, your money and budget management skills must be excellent. Budgeting skills are not ones that people are born with; they are taught and ingrained in us, if we are lucky, by our family, and certainly by how we are educated. You can even opt for an MBA in accounting.
An MBA will equip you with the knowledge of budget management necessary to manage your finances as an entrepreneur and make wise decisions with the limited capital you have. Being able to manage and create budgets will also help you put together proposals and business plans that you will use to raise capital. A bank that is considering lending you or your business money will want to see a budget that details where and how you will spend their money.
Specialization in entrepreneurship
One of the most direct ways in which an MBA can help you as an entrepreneur is if you choose an entrepreneurship specialization. These specializations allow you to start your entrepreneurial journey even before leaving the program and are designed to provide students with hands-on experience and guidance while they learn about entrepreneurship and explore their business ideas.
Coming out of an MBA entrepreneurship program, you will have both an intensive entrepreneurship education under your belt, not to mention a professional network of fellow entrepreneurs to rely upon and consult, but also a working business plan and even a full-on business.
Leadership
Entrepreneurs are, by definition, future leaders. You might start out on your own or with a business partner, but once you begin bringing outsiders on board, you, as the owner and founder of the company, are now a manager and leader. Being a good leader of people is important as an entrepreneur because it determines whether or not people will buy into your company goals and mission, your ability to manage personalities, and your ability to get the most out of your employees.
The bottom line is that, regardless of whether you start out your entrepreneurial journey as a lone wolf, you will eventually have to start managing people. You can’t do everything by yourself, and you certainly don’t know everything. With an MBA, however, what you will know are the fundamentals of leadership, what people want and need from a leader and how to maximize your human capital for the success and growth of your business.
Negotiation
One of the most important takeaways from an MBA is the negotiation skills with which you will come away. Being able to negotiate and advocate on behalf of yourself and your business is imperative if you are an entrepreneur.
As an entrepreneur, you will, at some point, have to negotiate better terms on loan; negotiate for better terms with a supplier; negotiate the terms of a buy-out with a business partner who no longer wants to run the business; negotiate the terms of a raise with an employee who is doing an exceptional job and would like more money and responsibility. These negotiations are crucial, and the skills and knowledge to approach them with your and your business’s best interests at the forefront are taught to MBAs.
Credibility
Credibility is important as an entrepreneur because the odds are that most entrepreneurs start their journey having to combine their own and other people’s money. Whether that capital comes from the bank, from private investors, or even from friends and family, having that MBA title signals to potential investors that you have the training and technical business understanding to run a company. Having the knowledge and successfully running a business are two different things, and there is no substitute for experience, but if people know you have a master of business administration, it will make them much more comfortable.
Having an MBA shows people that you have put in the time and effort to accomplish something impressive, that you have been exposed to high-level business administration theory, and have a holistic knowledge of enterprise operations. And that you take running and owning a business seriously.
Conclusion
An MBA program is not a guarantee of entrepreneurial success, but it will help instil and hone many of the skills and technical knowledge you need to make starting and running a business a success. From budget management to credibility to negotiation skills, leadership theory or even specialization in entrepreneurship as a discipline, choosing to get an MBA can underpin a lot of your success as an entrepreneur and self-starter.
Keep the above in mind when contemplating your MBA, and don’t forget that knowing what to do as an entrepreneur is a lot of the battle. Going into business for yourself armed with the knowledge and experience provided by an MBA will make you a more effective business owner.