Starting your own company is exciting. Making your ideas into a real, functioning business and reaping the rewards are empowering thoughts, and startup success stories of recent years have shown what can happen when people fulfill a market need with the right company at the right time.
With that said, success is far from ensured in the world of entrepreneurship. If you want to give yourself the best chance for a positive return on your startup investment, you need to approach the founding of your new company with a serious and well-considered business plan. You can build the necessary knowledge and expertise in a variety of ways, but one of the most direct and potentially impactful is to receive an advanced degree such as a Master of Business Administration from a business school.
When you’re deciding whether to start a business, you may initially wonder whether there is value in earning an MBA. The practices described in MBA courses typically reflect the norms in the corporate world ― will they be similarly relevant and applicable in the fast-moving startup field? While there are fundamental differences between founding a company and joining one, the principles of good management do apply in both entrepreneurial and corporate contexts, which means MBA programs can teach principles that will serve you well as a founder.
It’s worth reviewing the steps that go into creating and running a successful business. With these processes in mind, you can study the material covered in MBA coursework and see how these concepts overlap with the principles of good entrepreneurship. Company founders with MBA degrees have already learned information that may ease their organizations’ early years and periods of growth.
How Do You Start Your Own Business?
The one constant of starting your own company is that the process will be hard work and demand commitment and planning on your part. No initial idea, however compelling it is, can survive mismanagement. While the digitally enabled business climate today has enabled entrepreneurs to reach larger audiences than before, you should not take anything for granted when building out your concept into a full-fledged company.
Steps for Entrepreneurs to Follow
Though every small company is unique, there are a few well-defined steps that lead to a stable beginning. The Small Business Administration suggests, for instance, that before even drawing up a formalized business plan, you should get serious about market research. Beginning your process by examining the data is a good way to avoid entering a saturated market or trying to reach an audience that doesn’t actually exist in significant enough numbers for profitability.
After that, it’s time to create your business plan, secure your funding, and choose where you are going to locate your headquarters. Each of these steps is complicated in its own right. When you’re working on your business plan, it can pay to have the involvement of other people in the field you’re considering. In fact, U.S. News & World Report describes business school as a great place to meet these helpful boosters for your entrepreneurial career.
You will have to go through legal processes to get your company set up officially, such as choosing which type of liability company it will be and officially registering its name. The SBA pointed out that in cases when a business has a name instead of you simply doing work under your own name, you need to file paperwork with the government to legally protect that trademark.
The SBA also describes the financial aspects of starting a company, such as establishing tax identification numbers and setting up a commercial bank account. Making mistakes in any of these steps could lead to serious liability for your company down the line. Being meticulous in your pre-planning will help you avoid any roadblocks to sustained growth and success that an unprepared entrepreneur might face. This is another potential reason to earn an MBA: Familiarity with the technicalities of running a business helps you spot mistakes in your company’s legal preparations.
Tips to Sustain the Growth of Your Business
Launching your business is a huge moment in an entrepreneurial career, the time when all your planning and careful preparation pay off. However, unless you have thought several steps ahead, the company could stumble in the months and years to follow. Achieving sustainable growth and increasing a business’s audience are demanding tasks, and focusing too heavily on the launch can obscure what it takes to secure a future for your company.
As with performing the essential legal steps that come with setting up your business, the knowledge from a formal MBA education can help you undertake steps for growth. U.S. News & World Report points out that making the transition from startup to lasting business requires far-reaching and diverse knowledge on a variety of business topics. Especially if your staff stays relatively small, you will be the person called on to develop products, think about marketing campaigns, seek out new investments, and more.
Hiring new people is an essential part of growing your business. You are a manager of people in a small company, with no large business structure between you and day-to-day oversight of team members across a wide spectrum of roles. The more you understand about the various functions that make a successful organization, the better equipped you’ll be to select reliable employees to handle these responsibilities, and to decide when to delegate or keep a duty for yourself. Whether you want to retain a high level of control for a long time or staff up relatively quickly, a solid business education will help you achieve your goals.
Turning an idea into a startup is step one of a small business’s lifespan. Step two, its growth and eventual path to sustainability, is where a small company becomes simply a company. The fundamentals of business come into play during this phase, with the concepts explored in an MBA program becoming directly applicable to your organization’s success. Many companies don’t make it to this step, or falter here and do not make it further. By acquiring knowledge about business leadership, you can help boost your startup’s odds of making it as an established company.
How Does Having an MBA Relate to Starting Your Own Business?
Drawing direct lines between an MBA program and the success of your small company is important, as it can help you decide your career path for the next few years. Should you find your company immediately or build your knowledge base with a graduate-level education? There are plenty of reasons to take the latter path, some of which are focused on the MBA curriculum and others centering around other features of earning a degree, such as the connections you’ll make along the way.
Relevant Parts of the Curriculum
One of the primary defining characteristics of MBA programs is the broad spectrum of business topics they cover. Investopedia notes that a typical MBA graduate will understand management, statistics, economics, communication, and more. As the person with authority for your growing organization, understanding all these concepts can pay off overwhelmingly, especially in the earliest stages of your startup’s life, when all decisions go through you.
In addition to gaining value from a general and wide-ranging business education, you can take courses directly relating to the ins and outs of entrepreneurship. Investopedia adds that startup founder is one of the paths today’s MBA graduates are being prepared for, with entrepreneurial classes existing alongside traditional topics such as accounting. U.S. News & World Report adds that the human resources, business law, and finance courses taught in MBA programs are especially helpful for students, as they assist graduates in avoiding legal entanglements that may impact their less-prepared competitors.
Mar-Dat founder Love Hudson tells Forbes contributor Robyn Shulman it is worthwhile for entrepreneurs to be MBA graduates, due to the need for solid business knowledge. Without formal education in company management and leadership, it’s possible for good ideas to become derailed by a lack of practical decision-making. No matter how appealing it is to be someone who disrupts an industry and introduces new concepts, this approach should be accompanied by a sensible background in management, finance, and more.
It’s common for many of the concepts covered in an MBA program to be delivered through case studies of real-world organizational histories. According to U.S. News & World Report, this is beneficial for aspiring company founders. Learning how organizations have navigated the business world can give you an especially clear view of the pitfalls and opportunities awaiting your own organization. By studying enough historical examples, you can emerge into the world of entrepreneurship feeling experienced and prepared.
Additional Advantages of Earning an MBA
The learning associated with an MBA program goes beyond the material on the syllabus. Business school courses are good for making connections and developing your own ideas that can pay off in your entrepreneurial efforts.
The connections made in MBA programs can take multiple forms. Both your classmates and faculty members may be valuable as collaborators and advisors as you work on the concept for your startup. This is true even when you study in an online program. Top schools’ digital programs encourage collaboration and teamwork, despite the physical separation. U.S. News & World Report adds that when you make strong connections with professors in MBA courses, you can reach out in the future to recruit talented employees from the next class of students.
MBA studies may also help you discover which areas of business suit you best or reflect your passion most acutely. Mar-Dat’s Hudson stated that he and his entrepreneurial partner each learned about their enthusiasm for working with data while studying in MBA programs. Exposure to the wide variety of topics in the MBA curriculum can expand your horizons and help you chart a suitable path for your young company.
Trying out concepts for your business could be another major benefit of earning an MBA. According to U.S. News & World Report, business schools have become top locations for entrepreneurs to test out their ideas with a receptive audience of students and faculty on hand to guide their thinking. If a bold concept is going to fail in its current form, it’s important to learn that information in the low-stakes world of hypotheticals rather than after you have invested capital in a new company.
A stint in an MBA program can transform you into a more confident and experienced professional, with a network of contacts and experience both assessing others’ ideas and proposing your own. Learning about the fundamentals of entrepreneurship and the practices that can transform a small business into a long-lasting institution is now a featured part of the business school experience, and the personal connections and breakthroughs you make outside of class can similarly build your readiness to found a company. While earning an MBA isn’t the only path to entrepreneurship, it is one with unique advantages.
What Should You Know About Earning an Online MBA?
Top business school programs such as the online Master of Business Administration from the University of Alabama at Birmingham’s Collat School of Business provide an environment where you can hone your skills and build entrepreneurial knowledge. Online programs allow you to keep up a full-time career alongside your studies, building work experience while you learn essential concepts from an expert faculty.
Spending time collaborating with fellow students and completing coursework covering all aspects of business can prepare you for the challenges and rewards that come with founding a company. Rather than launching yourself into the world of entrepreneurship with insufficient preparation, you can come in with an extensive background in business planning, finance, management, and more, as well as a network of contacts and connections.
Entrepreneurial Elements of the Online MBA Curriculum
Courses such as Management and Organizations contain information that may direct your efforts in the early days of your business and beyond as the company grows and changes. This course describes the multitude of factors that affect organizational success from legal frameworks and social norms to ethics and internal policy decisions. When seeking to run a company in a compliant manner, with a structure that will help the business succeed even as it grows, you should internalize the information in this class.
Targeted courses such as Economics for Managers and Accounting and Finance for Managers can be essential when you are responsible for the monetary leadership of your firm. In the early days, before you have a full finance department on staff, these reporting and management requirements will be especially important.
The functional core of the degree program includes concepts such as supply chain management, cost analysis, and marketing, all of which will likely be your responsibility directly following the establishment of your new company. Information technology is also a topic of great relevance in today’s startup sphere. Even businesses designed around opening physical storefronts and cultivating local clientele rely on technology for marketing and promotional purposes, and a high level of comfort with IT can make your first years in operation smoother.
You can earn an MBA with a general focus or take one of four concentrations. Though the Health Services concentration only has overlap with a very specific class of startup, the others ― Management Information Systems, Marketing, and Finance ― can prepare you to take on specific duties with your new business as it grows.
The Process of Earning Your Online MBA
The time it takes to earn an online MBA is determined by your schedule. The number of classes you take each semester is flexible, allowing you to set a pace that fits alongside your full-time work. You can complete the program in as few as two years, allowing you to gain helpful business knowledge and move on to starting your own company in a relatively quick time frame.
Even if your schedule is relatively complicated and you will not be able to attend virtual lectures at the same time each week, you can succeed in the online MBA program at UAB. Courses are delivered asynchronously, so you do not have to set aside a specific block of time for studying. Wherever you are located, and whatever the demands of your personal and work life may be, you may fit these classes into your business schedule.
Entering a graduate program in management often requires the Graduate Management Admission Test, but there is a GMAT waiver available for Collat School of Business applicants who have built a relevant history of academic and professional experience. UAB also accepts transfer credits, which means you may switch to this program from another graduate school. The Collat School of Business is one of only 176 universities accredited by the Association to Advance Collegiate Schools of Business, demonstrating the high quality of education available to students.
The Experience of Starting a Business with an MBA Degree
While a degree cannot eliminate the complex nature and the hard work of starting a company, an MBA education can equip you with skills and knowledge about aspects of business you may have otherwise overlooked. This sense of preparation, built from hours spent reviewing case studies and trying your own ideas in a classroom setting, can make you feel more confident and empowered when it’s time to turn your idea into a reality. Coupled with the valuable connections you can make among faculty and fellow students, the utility of an MBA comes into focus.
The semesters spent earning your online MBA at the Collat School of Business are a form of preparation for your new position as the founder of a company. From information about intelligent IT use to a thorough grounding in business law, you’ll pick up numerous pieces of information that can pay off as your company starts out in the marketplace and expands.
To learn more details about UAB’s 100% online MBA, visit the program page.
Recommended Readings:
Is An Online MBA Degree Worth It?
Executive MBA vs. MBA: Which one is right for you?
Sources:
Small Business Administration – 10 Steps to Start Your Business
Investopedia – When is an MBA Worth It?
Houston Chronicle – Business Ideas for People With a Master’s Degree in Business
U.S. News & World Report – 3 Reasons Future Entrepreneurs Need an MBA, and 1 Exception
Forbes – Should You Get An MBA If You’re An Aspiring Entrepreneur?