Formal Business Education – Do You Need It?

You want to start your own company but don’t have a “business” background or education. Do you need it, or can you just learn as you go? Then again, can entrepreneurship really be taught in a classroom?

With classes for would-be business owners now a trend on college campuses nationwide, it’s time to take a fresh look at the value of a biz-ed.

Traditionally, business schools were attended by students intent on a career in corporate America, with curricula tailored for exactly for that.

Things have changed.

Today, more than 2,000 two- and four-year colleges across the country offer entrepreneurship courses, up from 1,400 in 1998 and 300 in 1980, according to the Kauffman Foundation, a Kansas City, Mo.-based resource center for small business owners. In recent years, Kauffman has given more than $50 million in matching grants to 23 universities for expanded entrepreneurship programs.

Inventiveness Sparks Shift

Advocates of startup-ed say the shift comes from a growing understanding of entrepreneurship's key role in economic and job growth, and that more college graduates will start their own companies or work at small firms instead of marching off to Fortune 500 companies.

Besides that, more young adults are arriving on campus having already started businesses or ready to. That’s a change from the past, when most people didn't launch startups until middle age.

Business Schools as Startup Incubators

“We prepare students for the challenges of starting and growing a business,” says Jeff Cornwall, director of the Belmont University Center for Entrepreneurship in Nashville, Tenn. “To succeed in business, you need the right tools.”

Cornwall introduced "hatcheries" at Belmont, where students running real businesses share office space and are mentored by faculty, local entrepreneurs and attorneys. Begun in 2004, the program now includes about 70 student businesses.

“Most entrepreneurs start their businesses on a whim without truly understanding their market or how they fit into it,” Cornwall. “We give them the tools to recognize where opportunities are, and how to take advantage of them.”

Learning to Grow

Growth management is another key part of entrepreneurship education.

“Many owners don’t know how to manage growth, how to grow their team or how to develop the right infrastructure to support their business,” Cornwall says. “If growth isn’t managed properly, success can lead to failure.”

Even so, skeptics still doubt the value of teaching entrepreneurship in the classroom, and point to legendary entrepreneurs like Steve Jobs and Bill Gates, who dropped out of college or never even attended.

"An entrepreneur is a kind of genius who’s born, not made," says Ann Winblad, who – as co-founder of Hummer Winblad Venture Partners in San Francisco – built her career on determining who’ll succeed at starting up. "It's in the DNA."

Supporters counter that while the drive and high-risk tolerance essential to successful entrepreneurship can’t be taught, skills can.

Entrepreneur Course Requirements

Entrepreneurship curricula include classes in marketing, identifying strategic opportunities, creating a business plan, cash-flow management, growth management, business law and company valuation, with many courses focused on specific fields like engineering, science and technology.

"I can't teach somebody to have passion,” Cornwall says, “but I can teach them ways to improve their chances of success."

There are other pluses. Five years after graduating, entrepreneurship majors and masters students who concentrated on entrepreneurship had 25 percent higher average incomes than other business majors and standard MBAs, according to the University of Arizona’s McGuire Center for Entrepreneurship.

What Business Education Costs

It isn’t cheap, and not every company owner has the time or money to commit to a business degree.

The cost of an MBA ranges from about $25,000 at some state schools to more than $60,000 at the nation’s more prestigious universities, according to MBAMap.com.

Undergraduate biz-ed averages a few hundred dollars per course at junior colleges to more than $100,000 at some private universities, as listed at the CollegeBoard.com.

Taking an entrepreneurship course isn’t likely to turn someone without any business savvy into the next Donald, but there’s enough evidence to suggest that a business education can speed up the learning curve for those who have what it takes.

More education resources for entrepreneurs:

  • The U.S. Association for Small Business and Entrepreneurship
  • Seeds of Growth, a small-business blog
  • Belmont University Center for Entrepreneurship
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