Choosing between higher education and start-up investment
QUESTION: FIRST and foremost, thank you for being an inspiration as a young black female entrepreneur. I am a 23-year-old whose highest level of qualification is an associate degree done in sixth form, and I’m currently contemplating whether to barrow a loan to pursue a bachelor’s degree in accounting first or to fund my dream of becoming an entrepreneur.
I’m interested in becoming a stakeholder in the real estate industry by flipping unoccupied homes, which, yes, I know it is quite risky in this financial environment and business market size, however, I’m of the firm belief that with proper planning and risk management, it can be a successful business venture. I’m also considering pursuit of the degree prior to the business venture as a means of sharpening my business acumen, and it will also look good on paper. And beneath all of this, I’m in fear of the realities of being a young, black woman who’s aiming to invest in an industry I’m not very knowledgeable about. So yes, I sorely need your opinion on this dilemma of mine. – Latoya
BUSINESSWISE: Thank you very much for your kind words.
You pose a fascinating question: “Is it better to first invest in a start-up business or higher education?” There are several points of view on this, and there may likely be no wrong or right answer given the lack of research in this area. I will share my personal view, which is informed by my experience and study of business and entrepreneurship over the past decade.
The right education and continuous learning are fundamental to the success of the modern entrepreneur. Entrepreneurs, globally, are more educated, sophisticated, and tech savvy than ever before. In the most advanced democracies with the highest levels of innovation and small-business growth, the cadre of entrepreneurs driving these developments has at least an undergraduate degree in related fields.
Visit the website of the World Intellectual Property Organization, WIPO, and read its most recent news release on March 19, 2019, titled “Record Year for WIPO’s IP Services in 2018” – www.wipo.int/ pressroom/en/articles/2019/article_0004.html.
Additionally, in formal business training lingo, there is common reference to the development of critical entrepreneurial KSAs, which is an
acronym for knowledge, skills, and attitudes. All must work in tandem for you to have the best chance of entrepreneurial success. Therefore, if you have the knowledge but lack the requisite skills and attitude, the likelihood of failure is higher than if you had all three.
EARLY MISTAKES
In fact, in Jim Collins’ acclaimed book Good to Great, which is based largely on one of the most significant longitudinal studies of corporations, he highlights exceptional company leadership as one of the major factors that allowed good companies to become great while the lack thereof precluded good companies from achieving their full potential.
When I started my first business at age 17, armed with extensive technical knowledge and training in the products and services I offered, I had many of the key attitudes needed for entrepreneurial success. I was driven, resourceful, disciplined, positive, service-oriented, punctual, tenacious, and confident. I opened my beauty and spa store six days a week for up to nine or 10 hours each day.
Despite my best efforts, I was forced to close after two years mainly because of major errors I made in the planning process – from the location to the product
mix to the overall business model.
The major reason the business failed was that I lacked the right business knowledge and education as well as some critical skills. I needed to learn about business strategy, business modelling, marketing, financial management, risk management, customer service, negotiation, and so on.
I lacked strong research and data-analysis skills, strategic networking, and important soft skills to better manage people and create the appropriate systems needed to build sustainable and competitive enterprise.
The best investment you could make at this time is to build yourself first as the first step to building a successful business. A degree in accounting will not only give you an advantage in business, but it can also be your safeguard if the business fails and you need to seek employment, especially during a period of recovery, as you recoup to try again.
Let me reiterate, however, that a degree in accounting or business administration will never be enough to fully prepare you for entrepreneurship it is and likely that you will have to undertake extensive training in other key areas before you pursue that dream.
One love!