The majority of MBA candidates come to B-school with hopes of launching their own business, yet few leaps making it into a reality. The low conversion rate is partly explained by the high opportunity cost of pursuing entrepreneurial ventures. On an average, a graduate from a top-10 MBA program earns $180,000 in their first year after graduation. So, a person going for entrepreneurship gets confused as he/she will be taking a lot of risks.
The relationship between MBAs and startups is very complicated. The value of an MBA is considered more in comparison to startups. Many people interested in developing their startup are turning to MBA programs to gain specific insight and skills. Here’s why.
An MBA can help ease the transition into entrepreneurship in many different ways:
Top B- school programs invest significant resources to help connect potential entrepreneurs with relevant resources both on and off-campus. An example of these efforts is school-run venture programs. MBA programs often include mentorship, and educational components and grants are given out through pitch competitions.
For instance, Harvard Business School’s Venture Incubation Program groups students by the stage of their venture and offers workshops and access to a wide range of experts to help them. Similarly, Columbia Business School’s Summer Startup Track allows second-year students to work on their ventures over the summer period, full or part-time, and then pitch for a $10,000 grant at the end of the summer.
Forming Technical Partnerships and finding a cofounder
College is the perfect place to find a cofounder. Business schools are a great place to find ambitious students. A highly social environment, career-focused clubs, curated class selections can help build a hyper-focused and supportive network of potential cofounders.
B-schools can help bridge skill set gaps in two ways. First, an MBA degree acts as a great connector for people from diverse backgrounds. Second, B-schools attempt to foster cross-disciplinary partnerships between MBAs and engineering colleges.
Classes, Professors and Academic Infrastructure
Some of the most popular courses in top MBA programs today are in entrepreneurship ventures. Many of these classes go beyond the academic arena and help students evaluate a specific business plan or idea.
Credibility, Investors and Angels
Raising capital is be one of the biggest challenges that new ventures face. B-schools makes the process of raising capital easier in several ways. These schools connect students with investors through programs such as accelerators or dedicated entrepreneurship centres. Leading venture capitalists teach investing classes in several B-schools. They invite their peers from the industry to speak and participate, offering students opportunities to pitch their businesses.
Extended Network and Reach
MBA network is a valuable asset and acts as a major factor in evaluating an MBA candidate’s abilities to start his/her startup. A robust personal and professional network helps every aspect of a business – from fundraising to sales and recruiting. B-schools curriculum also helps in setting up founders and their ventures for success.
Entrepreneurship training and the MBA
Graduates in B-school receive extensive training. The MBA program offers entrepreneurial training to those students who are interested in startups.
Here is a list of the specific entrepreneurial skills that an MBA student will attain during an MBA course:
- Framework for building a fool-proof strategy for the venture along with a structure for evaluating the viability of a startup idea
- Market research principles and how to apply them
- Financing plan with different sources of capital
- Marketing and product management
- Financial accounting
- Leadership, Teambuilding, and other organizational issues
The MBA program, specifically the entrepreneurship specialization track, allows students to experience hands-on and experiential learning. This learning prepares a graduate to handle the real challenges of founding and operating a startup.
Important knowledge of myriad domains
If you plan to start your own business, you need to know various disciplines that come together to make a venture successful. Providing students with a comprehensive look at various business practices, from finance to human resources to marketing and management, is imperative.
The MBA program will help you in making a solid and wide-ranging knowledge base. This knowledge will not prevent you from making any mistakes but will give you an advantage over the others.
MBA is a wholesome degree where you will also study business and corporate law, which you’ll be able to implement in real-life situations.
Improved communication skills
Communication skillset is one of the most vital yet overlooked contributions to an organization’s advancement. Success will be more likely for a company whose members can communicate well with each other and eventually with the client. Communication is not just verbal, which is a perceived notion. But, it also involves written communication which is carried through papers and presentations.
Support for entrepreneurship
In an MBA program, you will not be the only one with your own business goals and ambitions. Faculties are also aware that many students dream of becoming their boss, providing relevant help and resources. This support system and environment that an MBA course provides will not be found anywhere else or in any other alternative.
Thus, an MBA program can be regarded as a safe first step in their journey to business success.
Additional Advantages of Earning an MBA
The MBA program provides learnings that go beyond the material on the syllabus. B-school courses are good for making connections and networks and incubating their own ideas to pay off in your entrepreneurial efforts.
The connection built here can take multiple forms. Both your faculties and classmates will prove to be valuable as advisors and collaborators as you work on the concept of your startup. This remains true even in an online program of MBA course.
The MBA program will also help you identify your interest area and where does your passion lie acutely. As an MBA provides you with an array of topics in the curriculum, it will help expand your horizons.
It will enhance your personality, and you will become a more confident and experienced professional.
If you get yourself enrolled in an MBA program, you will benefit considerably to establish a successful business. Many B-schools provide you with the flexibility to work at a time that suits you best. Nowadays, the online MBA program is also in trend; they will not compromise on the quality and provide you with the best quality education. Relation between MBA and your startup is really important, as an MBA will take your venture success path to a new trajectory.
Author Bio: Abhyank Srinet is a passionate digital entrepreneur who holds a Masters in Management degree from ESCP Europe. He started his first company while he was still studying at ESCP and managed to scale it up by 400% in just 2 years. Being a B-School Alumni, he recognized the need for a one-stop solution for B-School to get in touch with schools and get their application queries resolved. This prompted him to create MiM-Essay, a one-of-a-kind portal with cutting edge profile evaluation and school selection algorithms, along with several avenues to stay informed about the latest B-School Updates.