Entrepreneurship is the big dream for a lot of people. The take-off point is often that you’ve got an idea for a hot new product or a fresh way to provide a service, and you’re understandably anxious to get it going. Or maybe it’s that the opportunity has presented itself to buy someone else’s business or even to take over your own family’s operation.
There’s no reason not to pursue that dream, no matter what it is.
But if you think you can do it without a basic understanding of how to run a business, you’re not setting yourself up for success. You can’t just jump in and learn by doing even though you might imagine that common sense alone will see you through. What you don’t know can sink you. And the fact is that without a foundation in basic business principles and practices, you’re not even aware of what you don’t know.
Whether you’re on the cusp of going into business or the dream is a bit further down the line, a sure way to gain the knowledge and skills to be successful is to earn an MBA. With the variety of options available online these days, you’re free to find the one that’s the best fit for you. You can enroll in an online MBA program in California, for example, even if you live in Maine. It doesn’t matter what your undergrad degree is, either; about two-thirds of MBA candidates don’t have business-related backgrounds.
Consider this list of subjects you should be conversant with, and then decide if you wouldn’t be making a worthwhile investment in yourself and your new business by learning more about them:
Accounting
What accounting means is to record, analyze and interpret the ongoing financial transactions of your business including operational and capital expenditures, investments and other monetary transactions. If for no other reason than to understand what your CPA is talking about, you should know the ways that accounting is critical in assessing the assets, liabilities and cash flow of your company, so you can make sound decisions.
Finance
While accounting gives a current picture of a company’s financial health, business finance has the larger goal of planning and maximizing the value of your business. It involves the methods of raising and investing capital, working capital management, operating and financial risks, making major purchases and valuation of real and financial assets.
Marketing
Marketing means more than just advertising your product or service. You need to understand who your target market and customers are and how to reach with them with maximum impact. To be effective in a competitive world, it also requires knowledge of how to segment markets, position products, develop pricing and put it all together in a marketing strategy that works.
Human Resources
As a business owner, you’ve got no greater assets than your employees. You may be a born leader, but there are still things to learn about how to motivate employees and how to create a workplace environment that encourages and supports everyone’s efforts. On the practical side, you also need to have a firm working knowledge of employment law and best practices for staffing, compensation, benefits administration, training and development, employee recognition and communications.
Operations
If you’re creating or offering a product, it’s essential that you know how to manage a supply chain, so production meets demand in a timely and cost-effective way. You’ve also got to know how to manage capacity planning, productivity analysis and ongoing quality control.
Strategic Management
To manage your business strategically, you’ve got to stay aware of your business environment and know how to adapt when that environment changes. You need the tools and techniques to identify new opportunities and to deal with challenges as consumer demands evolve and new sources of competition arise for your customers or clients. You also need to plan ahead to be prepared to revise your product or service to appeal to an expanded or different target market.
The Bottom Line
Starting up or entering into a business is a great adventure, but according to the Small Business Administration, 30 percent of new businesses fail during the first two years, and only 50 percent make it past five years. Why? Analysts say that failures can usually be attributed to to poor business plans and insufficient funding. You give yourself the greatest chance of success if you start out with the knowledge and skills that will help you achieve your goals and have a business that thrives.