In this article, Katerina Parpa, an MBA holder and former retail entrepreneur, discusses her experiences of applying her education to the management of her enterprise. She talks about the pros and cons of doing an MBA and, ultimately, if it is worth doing from the perspective of a business owner.
Drawing from personal experience, I often think about what I would have wanted to know before starting my own business, and how this led me to pursue an MBA. Therefore, I will look at the assorted pros and cons of obtaining an MBA degree, and the ways in which it can – and can't – help an aspiring entrepreneur.
At this point, you're probably thinking, "what can I learn about my own startup goals from someone whose venture didn't pay off?" Well, would you trust a business consultant who has never ventured out, taken risks, or never experienced failures?
They say that a positive attitude and a strong vision are more powerful than knowledge when it comes to succeeding in business. I had both.
I had a strong vision and the optimism to make my unique idea for a gallery/concept store a reality. I already had experience in media, retail and brand management. So, at 28 years old, I quit my steady job as a lifestyle journalist and stepped out to realise my dream. I had a clear vision of how the space would look, a defined brand strategy, and a collection of the artists and designers I wanted to represent. I even knew how I wanted people to feel when entering the space, and the unique shopping experience I aimed to offer them. It seemed I had all the ingredients for a successful startup. And it was... for a little while.
The launch party was a huge success, packed with guests and local press. My previous experience in media and communications equipped me to promote the business and gain support from various magazines, journalists, and influencers. The mayor of the city even came to give a speech commemorating the event.
So, what went wrong?
Well, the unexpected external factor of a global economic crisis didn't help. The biggest component, though, was allowing the negativity around me and in my head to take root – a critical factor that can block so many entrepreneurs from thinking of creative solutions and being open to opportunities.
Would an MBA have helped in this regard? It's difficult to say. Many things contributed to my startup venture closing its doors after only four years. But would it have helped fill in key gaps of knowledge and skills? And would these skills and expertise have guaranteed a better outcome before starting a business? These are altogether different questions.
Is an MBA Worth It?
According to Investopedia, 45% of new businesses fail during their first five years due to business owners not investigating the market correctly, their business plan not preparing them for crisis, or poor choices in regard to location, online presence, and marketing strategy. Can an MBA help to mitigate these factors?
Although an MBA mostly focuses on business theory, attaining one can help you to cultivate a genuine business mindset, think strategically, avoid mistakes, and make well-informed decisions. During the course, you will be studying the successes and failures of other businesses, and this can allow you to gain insight on mistakes to avoid in your own venture.
Things to Consider Before Doing an MBA
Before committing to an expensive and time-consuming MBA degree, though, you should first take stock of your existing knowledge and experience. What are your strengths and weaknesses? What are you hoping to learn? For instance, it was only after launching my business that I realised I needed more guidance on cash flow management and crisis management. I thought my business plan and feasibility study were enough, but, alas, a feasibility study doesn't always prepare you for a crisis.
Make a list of these strengths, and also make a list of what knowledge and skills you believe you need to gain further. Then closely research the curriculum of your chosen MBA course. Ask yourself, "are these skills only going to be taught and developed through this course? Or is there a different way to gain these skills?"
How Can an MBA Help You?
MBA curricula can vary depending on the institution, yet most cover the same basic topics. There are compulsory modules and elective modules you can choose from, depending on which skills you want to strengthen. As a result, an MBA will undoubtedly help you to gain a good understanding of business management and leadership, the essentials of planning a business, and the core concepts of creating a successful strategy. Having an MBA under your belt also improves your chances to be approved for funding when approaching investors, as picky loan managers will view you as a lower-risk investment.
Through your MBA studies, you will also gain a wealth of information on resources and tools, such as software and other new technologies, that can improve everyday business tasks. Leadership and staff management skills are also sharpened through an MBA. You will gain knowledge on trending leadership methods that can help you mentor and encourage your staff in their professional development and keep employees motivated. It will also help you to build a network of like-minded ambitious businesspeople that you could partner with down the line, using your newly acquired communication and collaboration skills to build potentially important relationships.
What Does an MBA Not Include?
An MBA will give you a well-rounded and general overview of how businesses work – and the theories and structures that support them – but it won't train you on the specifics of the business you want to start, especially if it is a niche or pioneering business. This is an important point to consider; an MBA is not a step-by-step manual by which to navigate your own individual circumstances.
There are many practical skills that you will need to start and run your business, too, which will require further training or are not included in most MBA curricula. In the context of your particular sector, consider what additional training you may need and what will be relevant to your business, and weigh up if these skills will have a bigger impact on your ability to run your business than an MBA would.
The Challenges of Doing an MBA
When considering signing up for an MBA, you should also pay heed to the day-to-day demands of studying for a postgraduate degree. Some people have the luxury of studying full-time without working, fast-tracking their studies to reach their goals faster. Most, however, work either full-time or part-time while studying for their MBA – complete with a massive student loan to pay off afterwards. If you are unemployed – as I was – and juggling a number of freelance gigs while studying, then this can be hugely difficult. The stress of balancing a freelance workload to pay the bills, and committing to study, can ruin the joy of the academic experience.
Harnessing Knowledge from Failure
Looking back, I realise that all the "little failures" of my startup were steppingstones to growth and success. It was my failure to stay optimistic in the face of difficulties and others' negative comments that drove my interest in organisational behaviour and healthy leadership habits. It was the economic crisis that motivated me to learn about crisis management, better budgeting, and cash flow management. And, it was the realisation of my strengths – my love for detail, writing and communications, and going the extra mile for clients – that helped me to carve out a new career path. This is another key point to consider: if all else fails, an MBA will help you to bounce back faster, and open up more doors for your career if your business doesn't make it.
If you do decide to take the plunge, then this, based on my own experiences, is what you should bear in mind:
- Don't second-guess your vision, but be open to adjustments and developments.
- If someone hasn't succeeded in what you are trying to do, then they have no place criticising your efforts and goals.
- Don't drag out your MBA studies for more than two years as it affects your momentum and motivation.
- Do take full advantage of every module offered and enjoy the academic experience.
Was this article helpful? What do you think? Is it worth doing an MBA as a business owner? Or is it a waste of time and money? Join in the conversation, and let us know your thoughts in the comment section below!