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MBA or my own company?

Today, both options are becoming evidently popular as seen by a rise in the number of entrepreneurs as well as MBA applicants around the world. By 2015, there was already a total of 15.5M self-employed individuals in just the U.S. With that, this burning question was studied in depth and the options were compared side by side. So, here’s our finding:

A different type of investment?

An entrepreneur’s path to success is usually uncertain. Despite having a lower entry cost compared to MBAs, entrepreneurship demands a larger personal investment. Consistency and commitment tend to bring more value than the funds invested in the early stages of a company.

In comparison, the MBA requires a heavy financial investment, costing easily over $100K on average. You are however guided throughout your education, provided with numerous networking events and career support. You have to commit to your studies of course, but only for a limited period of time. The attractive flexibility that we often see in the Entrepreneur-lifestyle does exist, but it can be limited. Moreover, an MBA is often financed via scholarship, fellowship and loans, whereas entrepreneurs cannot solely depend on bank loans or angel funding.

Thus, the MBA is often considered as the safe choice whereas entrepreneurship is seen as a big leap.

Ok – But is MBA really worth the price?

In terms of pure ROI, the MBA guarantees high income within 3 years after graduation. In 2016, the average alumni salary (3 years post-graduation) of a Top 100 MBA reached $142K. Financially, the MBA is a fairly safe investment.

86% of surveyed employers plan to hire recent MBA graduates in 2017 (a figure reaching 91% in the United States).

Aside from all networking opportunities offered during an MBA (after all, you may be sharing assignment with the next Microsoft or Apple CEO!), the main difference between an MBA and entrepreneurship is the learning curve. Entrepreneurship teaches essential operational skills and builds character the hard way. An MBA skips all operational skills and focuses on developing a strong understanding on global business. MBA graduates are known for their distinct management skills that cannot simply be formed by a Bachelor’s degree. 86% of surveyed employers plan to hire recent MBA graduates in 2017 (a figure reaching 91% in the United States). This enthusiasm from employers is reflected in the fact that more than 93% of MBA graduates value their degree personally rewarding and 89% professionally rewarding.

Of course, you must navigate through hundreds of MBA programs to find the one that suits you best. Worry not, because Prep Zone Academy will help you find the MBA that fits your professional goals. The better suited program you will attend, the higher value you will get.

At the end, it mainly comes to personality.

An MBA and entrepreneurship are choices that are actually increasingly becoming complementary. Since January 2006, alumni from the top 25 MBA producing VC-backed entrepreneurs have raised more than $131B.

An MBA is indeed a great platform to start a business. First, the networking opportunities allow you to meet potential co-founders. Second, every MBA program offers entrepreneurship bootcamps and incubation programs to help students in the idea development stage. Finally, the alumni network is a great base when it starts to raising funds.

However, an MBA is not necessary to start your company. After all, the level of VC investment in 2015 alone reached $128B in the U.S. And it is equally true that many successful founders don’t have an MBA. Entrepreneurship is right for you if you find thrill in risk-taking, have a clear idea and are ready to commit to it.
At the end, the choice you make depends on timing and personality. If you are given the opportunity to pursue an MBA, seize it. It will only give you more: more opportunities, more skills and more networks.

What's next?

As we have gathered from this article, there are pros and cons in both options. The learning curve definitely differs for one who took the MBA and the other that dived into being an entrepreneur. Entrepreneurship equips you with vital operational skills and develops your character the hard way. An MBA however, skips the operational skills and focuses on developing a strong understanding on global business. So, what is the right fit for you?

In the next article, read Jonathan’s exclusive interview with Professor Paris de I’Etraz. Not only is he a Professor of Entrepreneurship and the Managing Director of the IE Venture Lab, he is also the founder of the Global Mobile Challenge that is co-organized by IE Business School with Quest Ventures.

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Want to hear more about MBA programs, and whether you are a good fit for one? Why not contact us or give us a call at +65 6812 9999? Our experienced consultants are always ready to chat.
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