Anyone desirous of starting their own business may find it quite a daunting task to decide on which field(s) of study to take up in college to increase the chances of success in their venture. Whichever the subject(s) chosen, study should ideally combine both theoretical and practical education.
In this article, we discuss, how 1) choosing the right education depends on business model, 2) theoretical useful things to study to become an entrepreneur, and 3) examples of entrepreneurs with different educational background, explaining how their educational background helped them.
CHOOSING THE RIGHT EDUCATION DEPENDS ON BUSINESS MODEL
It is advisable for a prospective entrepreneur to go for a degree in, or major in that subject which would align well with the intended business model or key product/service to be offered. For example, if the intended business is associated with the information technology industry, it would stand the person in good stead if he went for a degree in technology. Similarly if the planned business is in the accounting industry, an accounting degree would be beneficial.
In addition to choosing a degree that matches the planned area of business, a budding entrepreneur may take one or more additional but beneficial courses. This includes ones that would help him increase sales (such as marketing) or help him understand what’s legal or allowed and what’s not (business law).
Entrepreneurship education: An Oxymoron?
USEFUL THINGS TO STUDY TO BECOME AN ENTREPRENEUR
- Brief look at what it covers: The MBA or Master of Business Administration degree is a post-graduate course of study that assists students with acquiring or gaining more knowledge about business and management so as to make progress career-wise. These core areas are typically covered in an MBA degree – operations management, accounting, administration, marketing, human resources and business ethics. Common electives include entrepreneurship, international business, risk management and strategy.
- Benefits of the degree: The degree helps prepare students to handle all facets of a competitive and complicated business world. While the core education provides the student knowledge in a wide area of subjects from a single course, the electives provide the specific knowledge the student requires to succeed in his specific business model.
- Brief look at what it covers: A degree in communication is meant to make its students good communicators by encouraging the effective and ethical conveying of a message to other people. Depending on the nature of the course, some of the things that may be taught are business communication, the basics of media and presentation skills and interpersonal and group communication.
- Benefits of the degree: A communications degree will be of great help to entrepreneurs when they have to make a presentation to a group of investors, draft proposals or even do something as basic as deliver a speech in front of an audience among other things. It also helps them develop the skills of successfully influencing people or negotiating with them.
- Brief look at what it covers: Accounting courses are again of different kinds – Bachelor’s degrees, Associate degrees, Master’s degrees and even certificate courses and the subjects they cover depend on the course. However, whichever the course, by the end of it, the student would be familiar with money management, accounting systems, tax, legal and other obligations; tracking payroll, auditing, financial reporting, and so on.
- Benefits of the degree: Even if an entrepreneur has one or more accountants working for him, acquiring some knowledge of accounting himself would help him comprehend where his money is going and, to steer clear of tax problems. The knowledge gained from the course will also help safeguard his business from bankruptcy. The awareness about various kinds of financial reports, gained through the course, will help entrepreneurs prevent problems with the IRS.
- Brief look at what it covers: A business law degree offers education in legal principles that apply when it comes to making business decisions. It prepares students to identify and examine legal problems that may occur in the business environment. Topics that are typically tackled in this degree course include contract law, intellectual property law, real estate law and taxation.
- Benefits of the degree: One benefit from the degree is that by understanding the regulations, taxes and licenses that have a bearing on business profitability and of their rights, entrepreneurs can protect their business. Secondly, the degree may be of benefit when businesses have to work on tenders, proposals and contracts.
- Brief look at what it covers: A degree in marketing provides broad knowledge pertaining to a variety of business aspects including business management, supply chain management, accounting and information technology. Other topics covered include consumer behavior, marketing research, and marketing principles relating to the development, distribution, pricing and promotion of products.
- Benefits of the degree: Education in marketing can help entrepreneurs:
– Decide on what product or service to develop to fulfill consumer desires
– Identify their target customer
– Accurately evaluate the success of a marketing campaign
– Comprehend customer acquisition costs and ROI (Return on Investment)
– Learn how to get word out about the good or service
– Realize a key concentration of marketing which is, to make the right product available at the right time, at the right place and for a competitive price.
Computer Science and/or IT
- Brief look at what it covers: Subjects covered in a computer science degree include foundations of computer science, computer programming, data structures, algorithms, computer organization. Students of a Bachelor of Science in Information Technology (B.Sc IT or BSIT) can expect to study things such as these – software development, software engineering, software testing, web design, programming, computer systems, databases and computer networking.
- Benefits of the degree: A little technical knowledge can help entrepreneurs set up their own online store, market their products online, set up company intranet and so on. In addition, the common sense and critical thinking that they learn to develop by way of the course can help entrepreneurs succeed in their business.
- Brief look at what it covers: A degree in economics covers the two major elements of economics namely: microeconomics and macroeconomics. The former has to do with the interactions and behavior of individual agents such as companies, households, buyers and sellers. The latter examines whole economies on a global or national scale and observing issues such as inflation, monetary and fiscal policy, unemployment and economic growth. Other items of study may include demand theory and estimation, market structure analysis, international economics, inflation theory and capital budgeting.
- Benefits of the degree: Knowledge of economics is useful to entrepreneurs to better their performance with respect to managerial decision making. They develop a skill of being able to recognize what could occur or what opportunities would possibly be opened if their assumptions turned out to be correct.
- Brief look at what it covers: A psychology degree helps students understand themselves and their emotions as well as those of other people. Subjects of study in such a degree may include introduction to psychology, personal/individual psychology, abnormal psychology, social psychology, organizational psychology and learning psychology.
- Benefits of the degree: A psychology degree assists an entrepreneur with understanding his employees and business prospects better. The understanding of human behavior can help him create an ideal user experience for consumers. “User experience” may be defined as the overall experience, generally or specifically which a user, audience member or customer has with a good/product, event or service. The Usability field typically defines this experience with reference to ease-of-use.
- Brief look at what it covers: Education in entrepreneurship is frequently offered in the form of an elective/area of concentration in business administration degrees (B.B.A or M.B.A). However, there are business schools that offer separate degrees or certificate courses in entrepreneurship. The majority of entrepreneurial degrees incorporate the fundamentals covered in a typical business degree such as accounting, management and basic marketing. In addition, they specifically address aspects like creating business plans, building up startup capital and developing clients. Entrepreneurial students are also typically given a chance to apply their knowledge through competitions, projects or other avenues as discussed under “Practical Education.”
- Benefits of the degree: Getting educated in entrepreneurship before one actually jumps into the venture can help to reduce the chances of failure. It can also help a budding entrepreneur generate comparatively more average revenue than an entrepreneur without college education.
Entrepreneurship Education: Michael Marasco at TEDxHanRiver 2011
As the term indicates, “practical education” has to do with education that involves learning by action, practice or experience, rather than theory. This kind of education for people desirous of starting a business of their own can take any of various forms, some of which are discussed below through examples.
Competitions encourage students to put on their thinking caps and/or use their creativity – skills that would come in handy when they actually start a business. The Martin Trust Center for MIT Entrepreneurship, a U.S. business school for example, conducts competitions that call for the participants to do things like:
- to launch a business plan
- to come up with an original service project that benefits undeserved communities
Cash prizes are awarded to the winners of these competitions. The business plan competition is a feature in many business schools.
Hands-on experience provides for a real-world application of information students have gained from learning about entrepreneurship.
Several options are available to budding entrepreneurs to practice hands-on learning. The list includes, but not limited: starting or joining a student initiative, starting their own project or developing an application.
A budding entrepreneur can consider beginning with a small venture and gain confidence and experience from it before moving on to a bigger venture. For example, if he wants to open a bakery or restaurant business, he can consider starting with something small such as a lemonade or juice stand to gain valuable experience. Alternately, if he wants to open a retail/grocery store, he may want to try his hands at a roadside vegetable stand which is a seasonal part-time business with minimal startup expenses.
With respect to developing an application, an entrepreneur can consider joining hands with other entrepreneurs who have similar interests and thereby, gain from the team environment.
Hands-on experience helps entrepreneurs get a feel of what it is really like to run a business including aspects such as taking decisions, coming up with ideas and managing money. Knowledge of these aspects will hold the entrepreneur in good-stead for his own major business venture.
An internship is on-the-job experience which a student gets when he is able to work at a firm for a limited, fixed period of time.
Available options for internships
Local vs. global – People looking for internship opportunities can choose between local and international internship opportunities. While the former means they have to work within their country of residence, the latter option means they can work abroad.
Startup, SME or Corporate – Budding entrepreneurs can also choose from these three options for their internship – corporate, startup or SME. Interning at an established company offers the candidate a prominent brand name and education with respect to the functioning of large organizations. There are great perks as well as the possibility of the company of other interns. On the other hand, interning at a startup provides for more transferable, practical experience while enabling the candidate to observe the inner workings of a small company in its entirety. Startups and SME’s are marked by greater flexibility, a requirement for employees to wear different hats and easiness to really make a difference compared to the corporate environment.
Based on Preferred Function – A third criteria of selection is based on preferred function whether Marketing, Product Development or Finance. The choice depends on where the entrepreneur’s interest lies.
How to make the most of an internship
Much can be gained from the different aspects of internship.
Networking helps to develop connections which can be leveraged in future whenever required. At an internship, there are great opportunities available to meet people in different functions of the organization. This network can be useful in the future when setting up their own business.
The mentoring aspect of internship means that the intern has someone who is willing to share his knowledge, skills and expertise with him. In addition internship-related mentorship provides benefits such as assistance in coping with personal challenges that may crop up in the course of the internship and advice and encouragement for the potential transition to employership. Internships are also offer a great opportunity in exposing budding entrepreneurs to other entrepreneurs who they can learn from while on the job.
In addition, the information gained from an internship can help the intern decide which area of a business is more in line with his or her interests (whether it is HR, Marketing, Admin, Sales or some other area).
Research and Projects
Research and projects provide students an opportunity to further their knowledge or gain additional skills pertaining to a particular subject(s). The school of psychology of The University of Queensland, Australia provides successful applicants with a research project of 4 to 6 weeks’ duration during their June-July semester break. The program enables scholars to acquire valuable professional and academic skills, be able to develop links with industry and academic contacts, and test drive research prior to beginning higher degree research projects or further research studies.
EXAMPLES OF ENTREPRENEURS WITH DIFFERENT EDUCATIONAL BACKGROUND
Lawrence “Larry” Page, an American business tycoon and computer scientist, co-founded the very popular search engine – Google, along with Sergey Brin. He also co-invented Google’s “PageRank” (again with Brin) which is the basis of the search engine’s search ranking algorithm. The business magnate holds a Bachelor of Science degree in computer engineering which he earned from the University of Michigan with honors, and a Master of Science degree in computer science which he earned from Stanford University.
It was following his enrollment into a Ph.D program in computer science at Stanford University that Page (and fellow Ph.D candidate Brin) came up with the idea for Google and created the PageRank algorithm. The beginnings for this brilliant invention were Page’s investigation of the mathematical features of the World Wide Web, comprehending its link structure as a giant graph. No doubt, his computer science background had led him to great things.
Phil Knight is another American business tycoon and philanthropist. He is the chairman and co-founder of Nike, Inc. He holds a Master’s Degree in Business Administration which he earned from the Stanford Graduate School of Business (Stanford GSB) in 1962. Previous to that (1959), he had earned a journalism degree from the University of Oregon.
It was during his course of study at the Stanford GSB that Knight realized he wanted to be an entrepreneur. In a small business class for the course, Knight had to come up with a business plan. His paper entitled “Can Japanese Sports Shoes Do to German Sports Shoes What Japanese Cameras Did to German Cameras?” was in essence, what laid the foundation for his entry into the business of selling running shoes.
Frederick Wallace “Fred” Smith is the chairman, founder, CEO and President of FedEx, the first ever and also the world’s largest overnight express delivery company. He earned a Bachelor’s Degree in Economics from the Yale University in 1966. The beginnings of FedEx can possibly be traced from a paper he wrote for an economics class. The paper outline presented an outline of overnight delivery service in an age of computer information. He founded Federal Express in 1971 (the old name of FedEx).
Armed with the right education and experience in hand, the would-be entrepreneur can confidently enter into a career that is probably more rewarding and flexible than working as an employee within the restrictive walls of his company.