More Bang for Your Buck: Start-up or MBA?

Start-up mbaOver the long haul, both a start-up and an MBA can offer you a business education. Due to the time constraints, however, it’s difficult to do both… at least for now.

So the question many ask: is the business knowledge you gain best obtained from an MBA or a start-up?

Here are some thoughts to consider as you make this important decision:

Top reasons to choose the MBA route:

1. Knowledge

A well-rounded education has undisputed values. If you don’t already understand the basic aspects of running a business – including those that don’t fall into your realm of greatest expertise – you need to learn. The most comfortable way for many (perhaps the less adventurous) to get knowledge on a wide spectrum of topics is to learn from experts in a classroom environment.

2. Networking

Not all of your classmates will turn into movers and shakers, but some will… and it is here where the foundation is laid for future liaison and cooperation. It does not take an expert to know that networking ranks high in a campus-based MBA program, whatever the school’s prestige standing.

3. Team Experience

Graduate school programs today almost always include a heavy element of teamwork. You’ll work with people you don’t know, and perhaps may not even like. Their efforts and contributions will affect the outcome of your project (and your grade). This experience transfers well to a job in a company that requires employees to work on assigned teams. If you plan to run a company, you should be comfortable working with all personality types; it is also to your advantage to practice inspiring your teammates to perform at their best.

4. Timing

If you’re in your early 20s and recently finished college, you won’t interrupt your career by heading straight into graduate school. If you decide later, however, that you’d like to get that MBA, you could find yourself held back by family or financial obligations.

And now, the top reasons to choose the start-up environment:

1. Grad School Offers Shaky ROI

The return on investment for an MBA is not a sure thing. You or your family will spend anywhere from $20,000 to $170,000 for the degree. Students from top ten schools significantly increase their earning power upon graduation. The rest of us don’t. Entry-level jobs offer only modest value. Too often, companies are reluctant to move even the most promising individuals up the ladder quickly. You’re sure to experience downsizing and layoffs before you find yourself inching to the top. The promotion trend is rarely measured in leaps and bounds.

No correlation exists between having gone to business school and becoming a successful entrepreneur. Entrepreneurs who make the cut are pioneers who tend to be stubborn, optimistic individuals, with or without a diploma.

2. Experience Worth More Than Textbook Education

It used to be nearer the truth that a management job required an MBA.  No longer. Nowadays, work experience has a higher value.

If you skip graduate school and use the extra couple of years to start your own business, you’ll win even if the business fails, assuming you have the acuity to analyze the reasons for failure. If defeat leaves you baffled, don’t go into business.

3. School Conflicts with the Real World

Academic grounding won’t prepare you for business realities. School teaches a little bit about everything. Life requires us to specialize. The most successful people in business are those who harness their own strengths and acknowledge their own weaknesses – employing the right people to overcome any shortcomings.

Entrepreneurs take risks. When it’s your own money (or borrowed from friends and family members), the motivation to succeed is sharp and energizing. Graduate school insulates from real-life risks and rewards.

4. Is an MBA a Waste of Time?

You’ll find plenty arguments for and against MBAs. Post-graduate education is one way – but far from the only way – to reach business career goals. If it’s corporate knowledge you seek, find a mentor. To network, exploit LinkedIn and Twitter. For a team experience, join with partners whose skills complement your own.

Which is right for you: an MBA or jumping into a start-up?

Before deciding, take your time. Examine your hopes and goals before making an expensive, time-consuming commitment.

Only you can decide.






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Kimberly RotterAbout the Author: Kimberly Rotter is a personal finance writer in San Diego, CA. She brings nearly 20 years of practical knowledge along with a solid post-graduate education in business and marketing. You can find more of her articles on Credit Card Insider. Follow Kim on Twitter!



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