The Value of a Degree in Entrepreneurship

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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The stereotype of the entrepreneur seems to include pulling one up by one's boot laces, without any special training or education. But more and more schools are offering degrees in entrepreneurship to both undergraduate and graduate students. Schools like Stanford and MIT offer programs that promise to prepare an entrepreneur for all of the questions he'll face in founding a business.

But what's the real value of a degree in entrepreneurship?

Is Any Degree Necessary?

When you found a new business, no one comes by to check if you have the proper credentials to operate a company. There are plenty of entrepreneurs who have grown companies with no college degrees whatsoever, let alone one in entrepreneurship. My own grandfather falls into this category. He likes to say that he has a degree from the school of hard knocks. In terms of formal education, he just barely completed the eighth grade. But he's built several businesses, including a real estate development company. My grandfather is in good company, as well, with the more well-known entrepreneurs without degrees, like Bill Gates.

In truth, if you're committed to your business idea and you're willing to work every hour in the day, you don't need a degree to launch a successful company. A degree just makes certain aspects easier. Being in a college environment provides you with easy access to a lot of information, as well as to experts in a variety of fields.

The Actual Value of Your Degree

A college degree, at least at the undergraduate level, is a fairly in-depth introduction to your topic of study. When you graduate, you aren't an expert, but you probably have a pretty good idea of who the experts in your field are and what you can read to try to catch up with them. You can handle the nuts and bolts work without any problem and may even have a good idea of where to go next to get even more information you need. Depending on the program you choose, you may even be able to complete a project or two that are directly related to the company you want to start.

There's a lot of theory involved in getting a degree from most schools, but not necessarily a lot of practice. Once you get a degree, taking it out and using it in the real world can be a little more complex than a student might expect. But your degree also means that you're not starting from scratch, trying to figure out how to even choose the books you should read about a given subject. Because you have experts (also known as college professors) guiding your learning, you can skip over a lot of material that doesn't actually help you. You even have access to experts outside of the business school at most colleges. If you need some help with other parts of launching your particular business, you can likely get it.

With a good entrepreneurship degree, you don't just get exposure to one part of running a company, like you would with a management or a human resources degree. Instead — at least in theory — you get information that pertains directly to starting your own business, as well as a grounding in all those topics necessary to actually keep your business going. In Stanford's graduate program, you can take classes like "Social Entrepreneurship" or "Building and Managing an Effective Sales Team." It's information that you'll have to figure out how to put into practice, but will leapfrog you ahead of the people trying to learn it on their own.

Deciding If You Need a Degree in Entrepreneurship

It's often a tough call to decide whether you need a degree in entrepreneurship or not. On the one hand, who wants to put down their money for a college degree when they're about to start a new venture that may need that cash? And, for that matter, who wants to spend time in school when they could be out starting a business? On the other hand, though, learning about entrepreneurship and running a business ahead of time can minimize risks, as well as damage caused by a trial-and-error approach. It is certainly a personal choice.

If you know that you want to run your own business, but you don't know where to start and don't have an idea of what that business will look like, a degree in entrepreneurship is more likely to be useful. There are many entrepreneurs who have a great idea for a product or a service, but simply don't come from a business background. It's possible to pick up everything about business, but the structure of a degree can be very worthwhile in such situations.

That said, a lot of entrepreneurs are going into business in an area that they're already familiar with and have a lot of passion for. It's not out of the question that an entrepreneur already has some background in running a business, even if it comes from working for an employer. If you know the ins and outs of your industry already, and you're comfortable figuring out details like funding a company, it's a lot harder to justify the cost of a degree.

It's also worth noting that not all entrepreneurship degrees are created equal. It takes some hunting to find the good ones — simply running the phrase through a search engine only gets you links to online schools that may not provide you with a degree that really improves your odds of success when you start your own business. It's better to just dive into learning about business on your own than to waste your time on classes that won't get you where you want to go.