Introduction

We are living in the start-up age. The lockdowns of the pandemic years have brought new ideas into realisation through startups. Government policies have also become a catalyst for the start-up revolution. Above all, the popularity of technological solutions like the internet has become a knowledge resource for startup founders. As a result, thousands of startups are mushrooming and operating in the world. More is to come. An idea, a little funding, and a team can make your startup dream come true. However, there is more to this equation. Business and management education, industry experience, and networking are some of them. In this article, we will explore why business education is an important factor for startup success.

Here is why startup owners need management education.

1. Management education increases start-up survival rate

The recent disruptions due to the pandemic, war, and economic crisis have made many aspiring entrepreneurs jump into founding start-ups. This happened because of the realisation of how temporary a job can be in times of crisis. With just an idea, a team, and some funding, anyone can create a startup. However, making it a point to stay in business is a different story. According to the U.S. Small Business Association, 30 per cent of new businesses fail during the first two years of being open, 50 per cent during the first five years, and 66 per cent during the first 10 years (Source: SBA).

The startup survival rate is dependent on several factors, like the lack of funding, knowledge, competition, etc. Staying in the business world requires the best efforts from the founders and the team. In many cases, even that would not be enough. Without business education, startup owners have to learn every aspect of their business the hard way. This can take valuable time and effort away from inexperienced startup owners. Business education, on the other hand, provides necessary skills, knowledge, and understanding of business. This can increase startup survival rates.

2. Business education provides a strong foundation

Business and management education gives a strong foundation for startup owners. It gives a starting point, a strategy, and a plan. Education prepares learners professionally, personally, and technologically. As all companies need the best efforts from their founders, the best skills, knowledge, and experience are found through business or management education. It gives owners the necessary network to spread their ideas and secure investments. It sharpens their professional and personal skills and expands their knowledge. Management education helps with paperwork, marketing, management, and maintenance of the startup. Overall, it provides a foundation for startup owners to build upon.

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3. Management Education helps Startups become scale-up

Even if startup owners do not need management education immediately, they will certainly need it in the future. Startups won't always stay the same size. When the company starts to grow in numbers, staff, and profits, the need to scale up the business becomes inevitable. With the need to scale up the business, there come many challenges for startup owners. These can be daunting and overwhelming for the owners without the necessary planning, strategy, support, or education.

Hiring

As the company grows, the need for more staff becomes apparent. This can pose new challenges for the owners. Hiring the right people is the key to a successful company. Creating a well-functioning human resources department or hiring on their own are the two options for startup owners. Hiring requires communication skills, human resources knowledge, psychology, and understanding. It needs critical judgement skills to know if the candidate is the right fit for the job. This can become a hurdle for startup owners without management education. Startup owners with business education, on the other hand, are well equipped to do this task. Business education like Masters Degrees in management or MBA programs or industry experience will have made them familiar with the hiring process.

Training

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Training the employees can also be a hurdle if the startup owners are not used to human resources. Often, startup owners choose freshers or intermediate-level employees to cut the cost associated with hiring industry experts. Even with experts, it takes several training sessions to familiarise them with the company culture, scope, and work requirements. Such sessions also require additional training on the usage of company technologies. Moreover, training requires adequate methods that fit the employees' learning styles. Most of these are covered in business or management education. Those who have no formal education or experience find it rather difficult to keep up with the company's requirements.

Finances

The growing company needs finances and taxes in order. It needs accounting, financing, taxation, and business law. An accountant can make it easier for a startup. Either a startup owner can hire an accountant or take the task on themselves. Those with management education can easily tackle the finances as they will be familiar with the subject. Those without a business education will be torn between hiring or learning. Hiring an accountant requires extra paperwork, office space, if any, and management. Those with business education are expected to be more adept at these than those without it. They can manage these jobs until the startup is up and running and profitable enough to hire an accountant. Even with an accountant on the team, startup owners need to check the finances at regular intervals. Without understanding finances, this can be a great hindrance to the future of the company.

Company culture

Creating a company culture can also become a hurdle for inexperienced startup owners. This can create problems within the company as the company grows. Without a company culture or rules, workplaces can be chaotic. A good work environment that is hospitable to all employees and helps in boosting productivity is a must for companies of all sizes. Indeed, workplace politics, bullying, and conflicts can lead to employee bitterness. This can ultimately lead to employee resignation, which in turn can be disastrous to startups. Hence, company culture is critical for startups. Startup owners with business education identify the social needs of company employees and make it a priority to build company culture as soon as they start the company with ease.

4. Business education helps in other aspects of business

Marketing

Startups need a solid marketing strategy to gain customers. Every start-up needs an online presence in this digital era. To help prospective clients find them online easily or to keep them interested in their product or service, startup owners must make a conscious effort to build a following on social media or blogs. Digital marketing has perhaps become more popular than traditional marketing methods through other media. This is because of some of the benefits of the internet, like personalization, scaling, and easy error detection. Even with traditional marketing methods like billboards, TV ads, and game sponsorships, startup owners struggle to identify the audience or measure the ROI. Business education can help them with managing resources and funds and carefully spending the startup money on advertising. It also assists them in determining the best channel or medium to advertise on. Business education helps to create a buyer persona and aims to market to a certain demographic.

Strategy

All business schools and management schools train their learners to develop a strategical approach to business. While many startup owners will have a natural flair for this, business schools develop this quality through curriculum and projects. This can come in handy when startups face some crises. The strategy helps the company target the right audience with minimal competition. Even in the face of competition from big companies, strategy can lead small businesses and startups to thrive and succeed. All these will be hard to come by for inexperienced startup owners.

Management

Management education is critical for all companies. Ultimately, it is the employees of the company that firm up the company and build it. In most companies, employees are the face of the company. This is especially true in service-related companies. Keeping the employees well-trained, engaged, and satisfied in their jobs is critical for startup owners. Recent phenomena like the Great Resignation can affect startups also. Here, it can be disastrous for the company as the efforts and time needed to fill the vacated role are exhausting for HRs or startup owners. Remote jobs can greatly reduce management workloads for startups. However, they are not practical in all industries. Prior management education, internships, experience, and group projects can give the idea of management to startup owners.

Technology

You need to know about relevant tools, machinery, or software and their uses. Without help from technology, the workload can become tiresome. As startup owners, you are also required to teach your team about the technological solutions your company uses. If they are somewhat new to your employees, the learning curve adds to the employee training. In the modern world, choosing the right technology for your startup might become a daunting task without proper experience. In business and management schools, such industry-relevant technology will be part of the syllabus. Startup owners, however, are left to pick and choose what works for them online or by trial and error. This can become a hindrance, though it provides experience for them.

Leadership

Source: Jason Goodman Unsplash

Startups need high levels of leadership skills from the founders. In this highly competitive corporate world, leadership skills take the company further toward its goal. Quick decision-making skills, time management, task management, risk analysis, and problem-solving skills are all invaluable to startups. For a small-sized company, motivating and training the workforce are also important. These are all the founder's tasks to tackle. Moreover, company employees need trust in their management or founders to stay in the company and be more productive. All of these can be managed through quality leadership on the part of the founders. Business education focuses on honing these skills early in college life through group projects and internships. Those who have management experience will naturally have leadership skills through their work. However, inexperienced startup owners are sometimes at a loss for these skills. Business education can make it easier for them to manage their companies through leadership.

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5. Management Education helps Build network

Business education can help startup owners build valuable connections. These can range from classmates, lecturers, and staff to co-founders, investors, and other priceless contacts.

Alumni network

According to research, 85 per cent of work-related opportunities and jobs are filled via networking (Source: Yahoo). This is also applicable to businesses as well. Business to business startups and SaaS startups need connections and recommendations from people and their networks. In these cases, the alumni network can open doors for startup owners. This opportunity is lost for startup owners without business education and alumni networks.

Co-founders

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Many startup owners are looking for co-founders. These are valuable individuals who bring their time, efforts, expertise, knowledge, network, and funds to the startups while sharing the vision and mission of the company. Business schools and management schools are made for this. Many success stories in the corporate world are founded and co-founded on the campuses of such educational institutions. Due to the purpose and scope of the business schools, they attract the right talent and like-minded individuals to them. This can also be leveraged by startup owners to find a co-founder. Finding such passionate individuals is very hard outside of the real world. Even online platforms like LinkedIn make it harder to build relationships and trust, without which, choosing a co-founder is next to impossible.

Funding investors

More often than not, startups are funded by the founders through their savings, loans, or family heirlooms. However, after the company needs to scale up, funding can become a problem. In such cases, investors are a great solution. Bringing investments can be a daunting task for the inexperienced. Business schools have curricula related to investments. They will also have a valuable network through which you can connect with other investors. The presentation skills honed through business education can be an ally for startup owners. Investors are perplexed by the sheer number of options available. Convincing them about your idea through the startup's current performance, market analysis, and possible ROI is hard without education, networking, research, presentation, and communication skills. A management degree like a UK Masters Degree or MBA under your name can increase your credibility and competence in running the business, thus creating a sense of security in investors about their money.

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Conclusion

Business or management education is not just about acquiring an academic title. Though they can increase your prestige and knowledge, they also offer so much more. Startup owners can get an immense value-from business or management education. Apart from the value of networks and connections, it prepares individuals both personally and professionally. It helps in managing the company, employees, and business structure. It helps in finding cofounders and investors. Management and business education help you with finances, taxes, and other legal aspects of your business. It helps in hiring, training, and managing the staff. It also helps in marketing and strategy. Overall, business education can be your greatest asset in founding a startup alongside co-founders, investors, and a team.

SNATIKA offers prestigious UK MBA and Masters Degree programs exclusively to senior professionals. If you are an aspiring startup owner who is currently working full-time, SNATIKA can help you. You can pursue your business education without quitting your job. Our immersive online programs offer high flexibility, British quality, and ISO-certified program delivery. Moreover, our learners earn two distinct UK academic qualifications with the same effort. Check out SNATIKA programs to learn more.

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