The Value Of A Graduate Degree In Starting A Business

A lot of people make the claim that the true value of higher education is in the intangible skills and lessons a student picks up along the way. I’d tend to agree, with the caveat that it strongly depends on the specific type of education. But along these lines, one area in which the concept seems to be particularly applicable these days is in entrepreneurship. 

A lot of people make the claim that the true value of higher education is in the intangible skills and lessons a student picks up along the way. I’d tend to agree, with the caveat that it strongly depends on the specific type of education. But along these lines, one area in which the concept seems to be particularly applicable these days is in entrepreneurship. 

The idea of starting one’s own business is, for lack of a better word, trendy these days, perhaps in large part because of the difficulty so many thousands of qualified applicants have in finding existing jobs. While there are signs of long-term improvement in the American job market (per Bloomberg, an increasing number of young people appear to be subscribing to the theory that starting a company might be more efficient, in some ways, than finding a job within an existing one. 

These days it can take college graduates and other qualified applicants years to find a job, or even to be promoted for growth within a company. And it shows in the numbers. The Bureau of Labor Statistics lists the U.S. unemployment rate at 5.6% for the end of 2014—the lowest it’s been since mid-2008. But according to an article published by Slate last year, the same number for college graduates aged 21-24 is an astounding 8.5%. 

Meanwhile, growth in small businesses is a welcoming concept. Synnovatia points out that even a 15% annual growth rate for a new business (a very attainable goal for a well-managed new company) means doubling the size of the business in just five years. According to the U.S. Small Business Administration, small businesses like those started by many young entrepreneurs now account for 54% of all sales in the U.S. Judging by numbers like these, the market for new small businesses is an appealing environment.

And naturally, this makes one think: is an MBA (or other form of higher education) of specific value to young entrepreneurs looking to cut their own trails? 

From a résumé perspective, many would be inclined to say the answer is no. In applying for a job, at least as a young professional or recent college graduate, it’s important to show off quality education and strong academic performance as a part of your list of qualifications. But in starting your own company or crafting a job for yourself, these qualifications may matter less. Academic background becomes relevant more for the credibility of your leadership and growing company than for your qualifications in a given industry. 

But from an intangible perspective, I’d argue that the experience of higher education can be invaluable in starting one’s own business, and not always in the ways you might expect. In some cases, it even begins with the application process for graduate programs. 

To be blunt, the application process can be grueling. But it also helps applicants in determining clear directions and professional goals that, sadly enough, just don’t always come up at the undergraduate level. During my own application process, I spent some time researching professional coaching for essay writing and interview preparation. I noticed an interesting trend in some of the testimonials I came across at a graduate coaching site called Menlo Coaching. Numerous people who had used the site’s services referred in some capacity to the ability of the site’s founder, Alice van Harten, to assist them in determining and articulating a career direction. This is such a major aspect of a graduate school application. Regardless of the specific classes you enroll in and the education you experience, taking the time to outline future goals and the process it will take to reach them is of great value to those who ultimately want to consider starting businesses.

The process of applying to and going through a graduate program also provides the general, intangible benefit of teaching young people to carry themselves in a professional manner. To many, this is the sort of thing that may induce an eye roll, but in truth it’s extraordinarily valuable to have a couple of years during which you are treated as a professional, without an actual career on the line. In some respects, it’s a dress rehearsal. 

Granted, there’s an endless array of tips and strategies in this regard, and plenty of young people hoping to make a good impression will look first to these shortcuts. Even the career assistance site Experience features an article with 10 interview tips from an etiquette professional. It’s not that lists like these can’t be helpful. However, none comes close to the experience of meeting professional contacts, attending conferences, submitting work for publication, etc. that you can gain at graduate programs. 

In undergraduate education, students are often encouraged to “be themselves” and, essentially, handle the experience in whatever ways they see fit. At the graduate level, however, expectations get a little more serious. Weaving through classroom requirements and assignments, there’s unofficially training in how to be professional. 

A range of other intangible benefits exists as well. Students going through graduate programs learn better productivity habits, figure out how to network and build connections, and benefit from observing the successes and failure of their peers. Ultimately, it’s not that none of these skills can’t be learned outside of a graduate program. But in an era in which education sometimes takes a back seat to personal initiative and innovation, prospective entrepreneurs would do well to recall the intangible benefits to an MBA or other relevant graduate degree. It’s often the skills picked up along the way that are most useful in starting one’s own business.