A Guest Post by Paresh Dhake
A lot of you might think an MBA is essential to be a successful entrepreneur, but the truth is a professional degree will get you only so far. If you ask any MBA about how their degree helps in running a business, they will tell you – an MBA is only useful if the business is up and running and not during its inception. It is also not necessary that an MBA will be able to execute a business plan effectively. MBAs do not have a clue about how to start a business from the grassroots because it is something that is not dealt with in the curriculum of most B School. They can only execute various strategic business plans, but he cannot turn an idea into a proper functioning business. The central focus of the early stages in all start-ups is the use of unique mind-sets and skills instead of executing tried and tested business plans.
According to studies, discovery and execution are the most important among all the stages of entrepreneurship. An MBA doesn’t prepare you for building a start-up. You will have to learn how to make a business plan and how to survive in the unstable environment of a start-up. Every step that you take as an entrepreneur will be a new challenge. Let’s break down the debate surrounding the need for an MBA to start a business into simple points.
Start-ups and established businesses need to be treated differently
In the early stages of a business, all business models have endless unproven assumptions. Factors like customer’s willingness to pay for a product, the customer segments, level of demand etc. are very hard to verify because the market size does not stabilize in the initial stages of a business. It might get frustrating for even MBAs because most of MBA education deals with how to execute your current business models and you learn things like cost accounting, marketing and economics which cannot solve the real world problems of a start-up. While you will find all the answers to management problems in the later stages of your business, you will not be able to manage the initial problems faced by start-ups.
An MBA is necessary after stabilizing your start-up
After you get through the initial stages of your start-up, there will come a time when you will need to take an objective look at your company and require guidance on what to do next. An MBA can show you how to identify losses and how to manage time better. All forms of future planning require strategic business plans that are tried and tested to be able to survive in the cut-throat competition. You can achieve more clarity on your day-to day operations and focus on the future very easily through professional MBA education.
There is an exception though. Niche programs like mba in fashion management, hospital administration, and business analytics tend to provide a much detailed knowledge about a sector. Generic MBAs have a well-rounded curriculum but for the same reason they lack the depth needed to hit the ground running in the job. Niche MBAs may help entrepreneurs trying to start a venture in that niche since they help the students acquire the much needed exposure in a short duration. These entrepreneur can save the time they will take to learn these concepts on their own.
An MBA program will help you create independent business models that will allow you to discover developments in your business and improve them further. You can implement various methodologies that are essential for the discovery stage of your start-up.
While ideas that are needed to form a start-up won’t come to you if you do not have the right mind-set and creative skills, an MBA will help you understand the importance of execution in all stages and the functions of your start-up.
How to start up a business without an MBA?
Now that we have discussed the different aspects of business with and without an MBA, we can come to a conclusion that MBAs will not help you start a business from nothing, but it will definitely help you gain momentum and maintain your business once it is properly set up. Let’s have a look what you will need to start up a business without an MBA.
- An idea: You do not need an MBA if you have the right skills and a great idea that is innovative and of the highest creative energies. You should know how to tap into the market and which products or services might open up your business. If your idea is the first mover in the market then you will surely have an advantage as your initial market will be near monopoly until your competitors tap into the same market segments.
- Team work: It doesn’t take leadership training in an MBA institute to form a great team. You simply need to find the right people who have domain specific knowledge and help you understand your business better.
- Risk taking: An MBA does not prepare you for taking the brunt of risks on yourself. You need to be audacious to start a business amidst all the uncertainty and survive until your make your business stand up to the competition. An MBA will only help you manage risks or avoid unnecessary risks, but a start-up is a completely different story. You need to jump right in and give your best shot to raise capital, create a market for yourself and also have backup plans in case your business fails.
- Passion and perseverance: Passion and perseverance are the two most important things you need if you want to take your business from ground zero to level one. An MBA will help you understand businesses as a system while passion and perseverance helps you treat your start up like your own child. You will stop at nothing to get your business on the map and that is something that cannot be taught in classrooms of an MBA school.
While an MBA can help you understand businesses better, it is definitely not necessary. 60% of all the top CEOs in India do not have an MBA degree to their names. No one knows your business better than yourself; if you gain the right knowledge through experience an MBA becomes irrelevant. However, no one can claim than an MBA is useless. It is one of the assets anyone can have in the business world. The ability to handle business plans after they have been created and understanding concepts like auditing, accounting, marketing and economics professionally is something that comes to an MBA naturally. Over time all start-ups will grow and require MBAs but an MBA is definitely not necessary when it comes to starting up a new business.