Do entrepreneurs need formal education?

There’s this image of entrepreneurs that we subconsciously absorb: they’re mavericks, and they’re graduates of the school of hard knocks. They actively disdain formal education in business as ‘theoretical.’ The media reinforces this image, always noting when a particularly successful business person is a high school or college drop out. Peter Thiel has gone so far as to offer ‘scholarships’ enticing people to leave college to start businesses instead.

But what’s the real story?

A small business trends survey by Guidant, conducted in 2020, discovered that the overwhelming majority of business owners – 70% – had some sort of post secondary degree. The breakdown was as follows: 31% had an associate’s degree, 17% had a bachelor’s degree, 18% had a master’s degree, and 4% had a doctorate.

So clearly, the drop-out image is partly myth making and possibly straight up anti-intellectualism. Let’s have a look at some of the potential benefits of post-secondary education.

The value of a good education

A good education, in any major, will teach you how to think critically, solve problems, and communicate effectively—skills that are essential for any entrepreneur.

In addition, if you choose courses related to running a business, a formal education will give you a strong foundation in the basics of business, which can be helpful when you’re starting your own company. Skills to pay the bills, as the saying goes.

And while there are lots of people who disdain arts and humanities degrees as being ‘useless,’ a broadly based degree will expose you to new ideas and perspectives, which is critical for fostering creative thinking and being able to consider how other people might think about things. And let’s be honest, a lot of businesses could use more ‘humanity’ in both their day-to-day operations and their goals!

The power of networking

One of the biggest benefits of formal education is the opportunity to network with other students and professionals. If you’re planning to start your own business, it’s important to surround yourself with individuals who can offer advice and support. Formal education also gives you the chance to meet people from all walks of life, which can be invaluable when you’re starting your own business.

Many colleges and universities have alumni networks that can be a valuable resource for entrepreneurs. These networks can provide access to funding, mentorship, and advice from experienced businesspeople. If you’re looking to start your own business, tapping into an alumni network can be a great way to get started.

The downside of formal education

There’s just one downside to this, but it’s a big one: cost. Degrees cost both time and money, and you might be short on both. Student debt is a huge problem, especially in the US, as tuition costs have skyrocketed over the last few decades.

That said, you don’t have to approach a formal education the conventional way. You could take classes in person part time while working part-time, gaining both real world working experience and cash money. You can take courses online via distance education too; it’s not quite the same thing as in person learning, but it can be faster and cheaper, depending on what you take and where you take it. It takes self-discipline, but that’s a great muscle to strengthen if you’re going to be an entrepreneur!

There’s also the option of attending a college or university overseas where the cost of living is cheaper in general, or doing a series of certificates and diplomas rather than a full-blown degree. Another possibility: a lot of places now offer ‘executive programs.’ These are short and intensive programs designed for busy people. Depending on the school and duration, these might be on the expensive side, so you’ll have to do a cost-benefit analysis for your situation.

There’s no one-size-fits-all answer when it comes to entrepreneurship—most people have found success with a formal education while some have managed to get along without one.

On balance, however, there are some definite benefits to formal education for entrepreneurs. If you’re just getting started in entrepreneurship, pursuing a formal education can give you the skills and knowledge you need to succeed. And even if you’re already running your own successful business, going back to school can give you access to valuable resources like funding and mentorship. So whatever stage you’re at in your entrepreneurial journey, don’t discount the value of a good education!

Image credit: Midjourney

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