Industry leaders like Steve Jobs and Mark Zuckerberg have not only revolutionized the technology landscape but have also reshaped our perceptions of the value of business degrees. Both Jobs and Zuckerberg departed from their college programs, reinforcing the belief that formal higher education isn't always necessary for entrepreneurial success.

So, do you need a business degree to start a business?

While some entrepreneurs find success without formal education, a general business degree can equip graduates with essential skills and industry experience that can enhance their ability to navigate the complexities of financial management, marketing, risk management, mentorship, and more.  

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Common Misconceptions About Starting a Business Without a Degree

The new business venture can often be simplified to a lightbulb moment: the sudden realization of an innovative idea or solution to a problem that sparks inspiration and excitement. This moment can ignite a passion for entrepreneurship.

These narratives, like those that follow Jobs and Zuckerberg, typically focus on the inspiration behind their ideas, the dramatic success, and the glamor of entrepreneurship. However, it’s essential to recognize that turning an idea into a successful business requires more than just inspiration. Achieving such outcomes often requires significant hard work, careful planning, and a wealth of knowledge.

Specifically, entrepreneurs must strategize and make key financial decisions to create a successful business. This often involves:¹

• Conducting market research
• Formulating a business plan
• Complying with local laws
• Securing financing and funding for their business idea

Earning a formal business degree or advanced degree, such as a master’s of business administration (MBA) or doctor of business administration (DBA), can provide entrepreneurs with a solid foundation in essential business principles and practice—without which they may struggle to effectively navigate the complexities of the business world. For those considering a master’s degree, knowing how to choose an online MBA program can be crucial in aligning their education with their entrepreneurial goals and lifestyle.

Lacking this foundational knowledge, entrepreneurs might face challenges such as mismanaging finances, failing to develop a coherent business strategy, or neglecting legal requirements.

Conversely, business degree programs provide students with practical training and coursework in:

• Financial and operations management
• Marketing strategies
• Entrepreneurship
• Leadership
• Ethics

The Real Challenges of Entrepreneurship

It’s common for entrepreneurs to encounter numerous challenges as they establish a new business. These can include:²

• Developing a product or service – When developing a lucrative product, aspiring entrepreneurs must understand the market they’re entering. They need to conduct thorough market research to identify customer needs, preferences, and gaps in existing offerings. This process involves analyzing competitors, assessing trends, and gathering feedback from potential users to create a product or service that truly meets market demands. Prototyping and testing are also crucial steps to refine the offering based on real-world input before a full-scale launch.
• Planning a business strategy – A comprehensive business strategy is crucial for guiding an entrepreneur's vision and operational goals. This involves defining the business’s mission and objectives, identifying target customers, and outlining the unique value proposition. Entrepreneurs should develop a detailed plan that includes marketing tactics, sales strategies, and financial projections. A well-structured business strategy helps in prioritizing tasks, allocating resources effectively, and adapting to changes in the market landscape, ensuring a clear roadmap for growth and success.
• Managing finances – Effectively managing finances is important for any business's sustainability. Entrepreneurs must navigate budgeting, cash flow, accounting, and securing funding. Missteps in financial management can lead to significant operational issues or even business failure.
• Staffing and managing employees – Building and leading a cohesive team is critical for success. Entrepreneurs must cultivate a positive workplace culture, manage diverse personalities, and foster collaboration. Effective leadership is necessary to motivate employees and drive productivity.
• Knowing local laws – Navigating legal requirements and regulatory compliance can be daunting for entrepreneurs. But understanding contracts, labor laws, and industry regulations is essential to avoid costly fines and legal issues.
• Marketing – Developing and executing effective marketing strategies is vital for attracting and retaining customers. Entrepreneurs must understand their target audience, differentiate their products or services, and leverage various marketing channels. Without a solid marketing plan, even the best ideas can go unnoticed in a crowded marketplace.
• Networking – Effective networking can lead to partnerships, mentorships, and potential clients, enhancing the visibility of an enterprise or small business. Entrepreneurs often need to engage with peers, industry leaders, and potential customers through events, conferences, or social media platforms to propel their business forward.

While overcoming these challenges is not impossible, having foundational business knowledge can make the journey significantly easier.

What Business School Can Offer Aspiring Entrepreneurs

For aspiring entrepreneurs, attending business school is a valuable stepping stone. While you don’t need a business degree to start business operations, a generalized business program can provide credibility to graduates and equip students with essential business-making skills and know-how in areas like:

• Financial analysis and literacy
• Strategic thinking and problem-solving
• Market research
• Economic trends
• Strong communication
• Business ethics

Many business degree programs also offer hands-on opportunities in:

• Leadership and management – Through group projects, case studies, and simulations, aspiring entrepreneurs can practice leading teams, making strategic decisions, and resolving conflicts. Through these opportunities, students can cultivate emotional intelligence and empathetic leadership skills—qualities that a 2021 survey by Catalyst identified as key drivers of employee engagement, innovation, and a sense of respect in the workplace.³
• Mentorships and internships – A business degree program will often facilitate mentorship and internship opportunities that connect students with experienced professionals in their fields of interest. These mentorships can provide valuable insights and guidance. Plus, students can receive feedback on their business ideas, gain industry-specific knowledge, and build relationships that may lead to future collaborations.
• Networking – Many business programs also foster networking through events, workshops, and alumni gatherings. Students have the chance to interact with peers, faculty, and industry leaders to foster connections, collaborate, seek advice, and refine their business ideas.
• Investor relations – Business programs often include practical coursework focused on investor relations, where students learn how to effectively communicate with potential investors, present business ideas, and negotiate funding. These hands-on experiences may involve pitching their business plans to real investors during competitions or workshops, helping to refine their presentation skills and understand what investors look for when evaluating a business opportunity.

Practical Skills Gained from a Business Degree

A business degree provides aspiring entrepreneurs with a range of practical skills that are directly applicable to running and scaling an enterprise or small business. Here are some of the key skills you might learn:

• Accounting – Understanding the financial health of a business is critical for long-term success. A business degree teaches budgeting, cash flow management, financial reporting, tax management, tax compliance, and more.
• Brand building – Marketing knowledge helps entrepreneurs position their products or services in the market and attract their target audience. Key areas of study include market research, brand development, digital marketing strategies, and customer relationship management.
• Team leading – To run a successful business, you must first manage a successful team. Business coursework may touch on collaboration skills, empathetic leadership, delegation, and decision-making.
• Risk management – Thinking long-term to mitigate risks is an essential skill of a successful entrepreneur. In business school, students learn to develop business strategies, create contingency plans, and scale businesses.
• Fundraising – Many startups require investor funding. Business programs teach skills in presenting business plans, determining financial projections, evaluating a company, and managing capital.

Alternatives to a Business Degree for Entrepreneurs

As an aspiring entrepreneur, it’s natural to want to forge a unique path and explore learning opportunities beyond a traditional business degree. Alternative ways to gain foundational business knowledge and skills include:

• Online courses – Numerous online platforms offer courses on business topics like marketing, financial management, leadership, using technology in business, and business strategies for those looking for a more flexible and affordable option.
• Mentorship programs – A mentor can provide valuable insights into your business plans and help you navigate the challenges of starting a business. Reach out to a local business owner you respect, or find specific mentorship programs that you can join.
• Internships – Alternatively, internships offer valuable hands-on experience, allowing you to apply your skills in real-world scenarios while refining your business knowledge. You’ll learn what goes into day-to-day operations, team management, and fundraising.
• Networking events – Industry conferences and workshops provide ample opportunities to collaborate with other entrepreneurs, gain industry insights, and learn about topics that interest you.
• Books and podcasts – Self-learners can reach for books or podcasts by industry leaders to educate themselves on such subjects as finance, marketing, and funding.

Balancing Passion and Education

Passion and perseverance are undeniably at the heart of every successful entrepreneurial journey. They fuel innovation and keep entrepreneurs motivated through challenges.

In fact, a study conducted in 2022 found that entrepreneurial passion plays a crucial role in driving success for entrepreneurs by enhancing feelings of confidence and resilience.⁴

However, passion alone isn't enough to sustain a business in the long run.

A structured education, whether through a formal business degree or alternative programs, equips entrepreneurs with essential tools—like financial management, strategic planning, and leadership—that improve decision-making and operational efficiency.

By combining the grit of entrepreneurship with a strong foundation of business knowledge, an aspiring business owner can significantly increase their chances of long-term success and sustainable growth.

Control Your Path With a Business Degree

Aspiring entrepreneurs can gain the crucial insights and experience needed to build a successful business by committing to continuous learning. For those looking for a structured approach, it may be beneficial to pursue graduate programs in business, such as an MBA or DBA.

At Alliant International University, our graduate programs combine traditional education and hands-on training to equip students with valuable skills they can utilize in the real world, from critical thinking to product design.

Map your own course with Alliant.

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Sources:

1.  “10 steps to start your business.” U.S. Small Business Administration. http://www.sba.gov/business-guide/10-steps-start-your-business. Accessed October 14, 2024.
2. Indeed Editorial Team. “11 Challenges Entrepreneurs Face and How To Overcome Them.” Indeed. August 15, 2024. http://www.indeed.com/career-advice/career-development/challenges-faci…. Accessed October 14, 2024. 
3. Bommel, Tara Van, PhD. “The Power of Empathy in Times of Crisis and Beyond.” Catalyst. 2022.  http://www.catalyst.org/reports/empathy-work-strategy-crisis. Accessed October 14, 2024. 
4. Hu W, et al. “Entrepreneurial Passion and Entrepreneurial Success—The Role of Psychological Capital and Entrepreneurial Policy Support.” Frontiers in Psychology. February 25, 2022. http://www.ncbi.nlm.nih.gov/pmc/articles/PMC8916239/. Accessed October 14, 2024.