Entrepreneurs are often experts in their particular niche. Whether you’re a baker starting your own bakery, or an engineer starting an engineering consulting firm, you know how to do what you do to earn money.
However, most small entrepreneurs are not as well versed in the business side of running their own business. While there are many routes to gaining more business knowledge, perhaps the best is earning a master’s degree in business administration. Here are five reasons why more business owners should consider getting an MBA.
It prepares your business for the future
You may know tried and true techniques for making products or handling customers. However, that may not work forever.
You need to know how to create business plans to pitch the expansion of your business to lenders and investors. You need to have a rational basis for deciding which new stores to open or products to develop. This is why an MBA increases the odds that you’ll be able to secure funding for your new business or next phase of expansion.
Here are some of the skills you’ll learn on an MBA programme:
- Business administration
- Human resources management
- Best in class business practices
A side benefit of attending an MBA programme is that you’ll read case studies that could give you ideas for improving your own business. You might learn from the mistakes others made or identify companion products and services to offer to your clients.
“An MBA programme that is well designed will very much be like a laboratory,” says MBA programme director Robin Frkal. He also added that MBA professors are usually very accomplished and are able to share their wealth of expertise with students.
These case studies and business theory classes could help you determine when and where you can automate your business while maximising the return on the investment, for instance. It could give you the knowledge you need to set up a profitable online store or outsource production to international suppliers. And, you won’t have to suffer losses trying to learn through trial and error either.
It teaches you how to manage people
Part of the core material in any MBA programme is learning how to head teams, manage projects and choose the right people for the job. In short, it teaches you how to manage people. You learn the applicable rules and regulations regarding hiring and firing while becoming familiar with the best ways to give constructive feedback. Learn how to inspire and empower people instead of managing by fear.
It can reduce your stress level
Once you’ve earned your degree, you’ll be able to reduce your personal stress. For example, you’ll have learned how to hire middle management and delegate work so that someone else is supervising the front line employees.
Or you’ll learn how to hire people with complementary skills and delegate tasks to them. Now you aren’t struggling to do everything yourself or do your job while trying to supervise everyone else. Note that this is essential if you want to successfully scale up your business.
The best thing is that you don’t have to put your business on ice to do so. Online MBA programmes like the one offered by Aston University allow you to earn your degree while continuing to manage your business. You’ll also be able to apply new principles into your business as you learn them. If you want more information about Aston University and their online MBA programme, you can click here.
It can improve your profitability
Perhaps the biggest benefit of earning an MBA is that you get an education in business management theory. You’ll learn how to create the financial reports investors require. You will know how to calculate your profit margin and determine which products or services are the most profitable.
You’ll learn how to create budgets and financial projections so that you don’t take on unnecessary debt and improve the odds you’ll be able to make all your payments. Knowing how to value and track assets can reduce losses to theft and spoilage. Track inventory levels relative to predicted burn rates, and you won’t invest money in materials that just sit on the shelf. That money can then be put into inventory or equipment that has a higher ROI.
And while you could learn some of these principles on your own, nothing beats having a predetermined curriculum where subjects are prioritised and presented in a meaningful way. “This is very difficult to do at home on your own,” says associate finance professor and dean Urs Peyer. “When you go at it this way, you end up spending more time thinking about what you’re going to learn instead of actually learning.”
It gives you a professional safety net
Depending on the study, anywhere from seven to nine out of ten start-ups fail in the first two years. Having an MBA gives you a professional safety net. With an MBA, you’ll be a stronger candidate when you apply for a management, marketing or business analyst position after your small business failed. You’ll also have a stronger professional network that includes classmates, programme alumni and professors. Most of them will be able to help you find a new job as an MBA.
What should you do to find the best MBA programme for your goals?
- Look for programmes that are flexible, so you can attend classes that fit your schedule. Then you’re more likely to keep up with, and finish, the degree.
- Don’t over-commit. If they won’t let you take a break for family commitments or just one class at a time, look elsewhere.
- Choose one with name recognition, especially if you will use it to get a backup job or as a point in your favour when seeking funding.
- Don’t accidentally sign up for a diploma mill. Real programmes won’t give you an MBA in a couple of weekend seminars.
- Don’t overextend yourself. Take electives relevant to your profession, but don’t push yourself to earn a second MBA or otherwise take on too much work.
An MBA may give you more career flexibility, too. Perhaps you could work as a business consultant while you try to get your prototype working. Or you might find a full time job in finance or management that only requires 40 hours a week. This frees up weekends and evenings to work on your business idea, while you have a decent salary that pays the bills and may help fund your start-up.
Many entrepreneurs would benefit from completing an MBA. A master’s degree in business administration offers them a high return on the investment, if you make the most of the programme. So, consider expanding your knowledge base by attending one, and look for a great programme that will fit your needs and expectations.