Should You Spend Money on Education?

This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.

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A small business owner always has to be learning. There are always new tools and techniques coming out that can help you with your company. That means setting aside both time and funds for that continuing education. Even if money isn't an issue, time is in short supply for most entrepreneurs, making it important to have some ideas of how to plan and manage your education in the future.

Planning Education That Will Help Your Business

There are plenty of educational opportunities out there, but whether or not they're useful to your business is a different matter. Many entrepreneurs feel that a business degree would be beneficial, for instance, but when you don't need to worry about landing a job, you need the practical skills of business administration rather than a graduate level degree. Similarly, if you're comfortable running your business, the education you need may not be found in a business school.

George Saines is the CEO of Skritter, a site that helps students learn Chinese and Japanese. Saines needed to brush up on his language skills to run the company: "My two co-founders and I started the company directly after graduating from Oberlin College in 2008 and I had never taken Chinese or Japanese language courses in my life. So, it was decided that I should start taking Chinese 1 at the college. The decision for us was based mostly on the nature of our business. It wouldn't be authentic for me to sell the software we made if I didn't know what I was talking about."

Managing the Time Requirements

If your educational efforts are focused on reading up on new opportunities, fitting time for education into your schedule may be easier than if you're taking a class. Saines found that it took at least 15 hours a week for him to keep up with his language classes, which wasn't trivial for his workload: "The workload for the class was supposed to offset regular work, i.e,, we were going to count my studying as work. That didn't really work out though, as there was so much to do. In the end, I just worked through the evenings to keep up with my class, so it directly offset my free time. It was pretty tough to remain disciplined when I could instead be doing something entertaining, but I managed it (barely, the class I was in moved fast so even with evening study sessions I seemed to always be one step behind)."

Managing the Costs of Education

If you're willing to get creative about your education, you may not have to face big costs. There's a big difference between the cost of a single class and a full degree, for one thing — and even paying for the class may not be entirely necessary if you aren't trying to earn credit towards a degree. Saines didn't have to pay for his language classes: "I simply asked the professor nicely if I could sit in on the class. I imagine this tactic works less well at community and vocational schools, but I would bet that if you present yourself in a positive light, be polite, and show genuine interest, most professors at four-year colleges would be sympathetic to letting you sit in. Especially if you have a compelling motivation ('I am learning this for my startup,' 'I took a lot of accounting in undergrad but never learned corporate tax,' etc). To sweeten the deal for the professor, I also made sure I didn't increase her grading burden. I had my business partner (who already knew Chinese) grade my homework...If you don't happen to have a business partner handy that has your desired skill set, it is a heck of a lot cheaper to hire a student tutor from the college and have them grade your stuff than it is to pay for the class."

Choosing a Formal Degree

There are some situations in which a formal degree does make more sense than studying on your own. A professional credential can make a world of difference in many fields. Lisa Kanarek pursued a degree in interior design to support her business. "During the time I was in school, I had to put my business on hold. I still gave speeches and worked individually with clients, but I cut back on my client list. The trade-off is that subsequently I've written two more books and my business has expanded. If I had to do it over again, I'd go back to school in a minute. It was one of the best decisions I've ever made."

Kanarek already has a bachelor's degree in journalism, but needed the additional credential to continue to build her business: "I graduated with a BS in Journalism many years before that, and swore I'd never go back to school. I've learned never to say never." Similarly, professional credentials from professional organizations, and the education necessary to acquire them, can be very useful. Andra Watkins, a CPA, describes her experience: "In my own business, I decided to pursue the Certified Management Consultant designation, requiring more continuing education and an additional investment of funds on my end every year. It was a lengthy process, with testing, written essays, and an individual interview panel of peers, all costing me both time and money. I justified the cost because I believe that it gives clients a greater sense of comfort. Anyone can be a consultant, but only 10 percent of consultants in the U.S. have this designation requiring me to adhere to strict ethical standards in my business practices. It was a specific way to get a leg up on my competitors."

Watkins notes that her credential has made a noticeable difference in her business. "This certification is what has kept my consulting business afloat during the economic downturn. Without question, the additional assurance to the client of my qualifications and adherence to a set of ethical standards has made the decision to choose me over other consultants a less risky one for a prospective client. I have also been able to attract higher quality clients consistently."