Do You Need an MBA Degree to Start a Business?

Formal education will make you a living; self-education will make you a fortune. – Jim RohnA business, as you might know, is rather unpredictable; some go on to achieve great success, some sink, while many hang on midway, making just enough to be comfortable. But, I guess, you must be wondering what makes those few, the ones making millions, different from the others.

Here is their little secret – they never gave up. Many successful entrepreneurs are also independent thinkers, and have profited by coming up with unique products or ideas. Another thing that they have in common is hard work and passion for their chosen field of work.

You do not need any degree or qualification to start or run a business. Many successful people do have prestigious degrees behind their names, but so are a few billionaires who have dropped out of school. Bill Gates, Mark Zuckerberg, and Steve Jobs are some of the famous ones.

Is an MBA Degree Beneficial to a Business?

Even though an MBA degree is not required to start a business, there are many advantages of possessing an MBA degree.

➤ You get an opportunity to develop multiple skills that will be required to run a business. MBA programs involve training on various aspects, including communication, negotiation, leadership, financial, marketing, and organizational skills.

➤ MBA programs usually involve extensive work on projects, which enables you to gain real-time experience of managing a business.

➤ The knowledge that you acquire through the program will help you develop an effective business strategy, and give you a competitive advantage.

➤ It will give you an opportunity to interact with high-caliber individuals, and enable you to establish an excellent network of business associates.

➤ A degree from a prestigious institute will also improve your self-esteem, besides getting respect from your employees and associates.

Things You Need to Start a Business

You do not need any degrees or qualification to start a business. You do, however, need to have certain documents to set up your business.

A Business Plan

A business plan is a document that outlines what your business is going to be, it’s goals, how it is going to achieve them, a general view of the market you are targeting, and what makes you different from your competitors. It is required by many banks if you intend to take a loan, your business partners, lenders, and/or investors. It will also provide you a defined structure to work on, plus give your employees and associates vital information regarding the business and its objectives.

A Business Structure

A business structure, i.e. whether you want your business to be a sole proprietorship, partnership, limited liability company, etc., is required by the IRS for taxation purposes. The structure of the business will decide how you will be taxed, and will also have some tax implications.

A Name for Your Business

This one seems a no-brainer, but is an important step in starting a business. Although rules for this vary from state to state, generally a ‘Doing Business As’ (DBA) name is required to be registered, unless you want your business to have exactly your name. For example, if your name is Clark Anderson, and you want to operate your store as Clark’s, you will need to get ‘Clark’s’ registered as your DBA.

Licenses and Permits

Businesses require certain licenses and/or permits to operate legally. This will depend on the type of business you want to run, and the state from which you want to operate the business. In addition, some businesses, such as those retailing alcohol or firearms, may also need federal licenses.

Employer Identification number (EIN)

An EIN is needed if you want to form a LLC, partnership company, or corporation. It might also be needed in a sole proprietorship, if you plan on hiring any employees.

A Business Bank Account

This isn’t required as per law, but it is a good idea to make a separate business account. It will ensure that your personal and business finances do not get mixed up.

Skills Needed to Run a Business

Starting a business needs innovative thinking and risk-taking ability, but running it is a different thing altogether. Here are some skills that you might need to run a business successfully.

Financial Skills – An entrepreneur’s success is directly measured by the amount of money he makes, but a business can be only profitable in the long run when the profits are invested and managed properly. This is where a person’s financial skills come in handy.

Accounting Skills – A precise and detailed record of the various expenditures, earnings, bills, and tax documents of your business is a must for running any business, and is also required for taxation purposes.

Organizational Skills – The day-to-day running of a business is no mean task. It involves managing supplies, people, tasks at hand, time, and delegating work.

Human Resource Management Skills – A business cannot function without a good team working for you, and a cohesive team needs motivation, direction, and a good leader to work efficiently.

Negotiation Skills – Negotiation is required, not just for making the best deals with suppliers, vendors, and distributors, but also for financing, with investors, partners, and bank officials.

Marketing Skills – Only having a good product or service is not enough. It also needs to reach the consumer, and this is where marketing skills come into play. Deciding on the target market and then attracting customers are vital for any business to succeed.

Computer Skills – Learning the basics of computers can help you in almost all aspects of your business; from accounting to marketing, and a computer, all have become essential in the running of any organization.

These are some things you need to start and run a business. As you can see, you do not need any qualification for starting a business. A business degree, however, will help you acquire the basic skills needed in running a business, and also provide you with a network of buddies from your B-school.

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