Entrepreneurship can be a great way to financial freedom, but building a successful business takes a lot of time, hard work and perseverance. A college degree, on the other hand, is not required to start a business – but it certainly helps. College not only teaches students educational topics that can be helpful in starting a business, but also soft skills, like how to be lifelong learners.
Although you may know that it is technically possible to start a business without a college education, how do you know which career path is right for you? It is important to answer several key questions before making a decision about starting a business versus pursuing higher education.
Those facing this decision should take the time to answer these questions honestly and evaluate if the pros of starting a business will outweigh the cons of quitting school. [Get inspired by these stories of amazing young entrepreneurs.]
Any choice comes with pros and cons. A decision as paramount as forgoing a formal education has some notable advantages as well as drawbacks.
Here’s a quick breakdown of the things you likely can or can’t do, depending on whether you go to college:
|Going to college||Skipping college|
|Self-funding your business||More difficult, because you’ve spent a significant amount on education||Easier, because you haven’t spent hefty sums on education|
|Acting now on pressing ideas||Less feasible, because college is quite time-consuming||Uninhibited, given more open schedule|
|Developing skills||Likely by the end of your education||Less likely, unless you work an intense job for years before starting your company|
|Earning professional certifications||Relatively easy once you have your degree||Difficult, because you’ll likely need experience equivalent to a degree|
|Networking with peers||Abundant via classmates, professors, and job fairs where you can find clients for your new business||Tougher, as you’ll need to forge brand-new connections yourself|
Do you need a degree to start a business? Technically, no, but that doesn’t mean you shouldn’t get one. Especially for industries that are more technical and complex in nature, a college degree can be very beneficial – sometimes even necessary – to your success. If you have little to no knowledge of how business works, or plan on managing complex documents and processes, it may be in your best interest to brush up on your skills with a few college courses.
According to Lauren Grech, CEO and co-founder of international event management firm LLG Events, getting a degree – or at least some form of higher education – can be very helpful for starting your own business. She said the college experience teaches you skills like ownership, accountability, time management, prioritizing and emotional maturity.
“It may not be essential within certain career choices; however, it really helped me personally,” Grech said. “My education helped me develop a proper business model, enabled me to understand certain law documents or tax laws by giving me the ability to think critically and analytically, and provided the tools necessary to read through these documents thoroughly.”
Even if you can successfully break into your industry without a college degree, you will likely need some form of continued education to be an entrepreneur – even if that education is informal.
Though you don’t need a degree to start a business, there are certain industries that rarely hire people who lack degrees. It follows that if you start your own business in such fields, you might struggle to find clients unless you can demonstrate your expertise – and many people still look to academic achievements to validate your claims.
As an example, let’s say you’ve already totally hacked filing taxes well before your graduation date. That’s great, but it’s likely not quite enough to start an accounting business. You can’t qualify for accounting certifications such as Certified Management Accountant (CMA) or Certified Public Accountant (CPA) without a bachelor’s degree. As such, you’d be at a disadvantage, if not a complete dead end, without a degree.
In other highly skilled fields, you can more easily forgo a college education, but that doesn’t mean you can entirely forgo any education. If you’re looking to start a medical billing or coding business, for instance, you’ll likely need at least a certificate. The good news is that you’ll probably need less than a year to obtain your certificate, but that still requires time and money.
Conversely, you could probably offer products or services locally without a degree. Selling everyday products (such as sustainable clothes) or offering everyday services (like furniture assembly) likely won’t have clients asking for formal credentials. And as you probably know from many tech mogul success stories, you can potentially get away with self-education in some software and computer fields by securing an IT certification.
Before you dive into your startup, you must be certain that it is what you want to do. Starting a company is very different from working as an employee at someone else’s firm, and many responsibilities and stressors come with the territory. If you are motivated and inspired to start, don’t doubt yourself. However, if you are not sure how you feel about it, don’t jump in too quickly.
“True entrepreneurship is a full-time, 24/7 job,” said Tom Portesy, president of MFV Expositions – producers of Franchise Expo West, Franchise Expo South and the International Franchise Expo. “Are you ready for time away from friends [and] family? Are you ready for rejection, disappointment and failure? Are you prepared for countless sleepless nights – risking everything you’ve got? It can be immensely rewarding, but do you have the spirit to excel?”
Grech added that entrepreneurs must have patience and perseverance, even in the face of failure.
“If you’re someone who needs reliability and consistency, do not open a business,” she said. “There are no guarantees when starting your own company. The highs are high, and the lows are low, and it’s important to maintain your patience when the business is not going in the direction you’re steering.”
If you don’t fare well with uncertainty or potential failure, you might not be cut out to be an entrepreneur.
Sometimes, great ideas can’t wait, and spending four years in college will result in missed opportunities. This was the case for Taso Du Val, founder and CEO of global tech industry network Toptal.
“I wanted to go to MIT, but the thought of waiting for four years before starting my career troubled me,” Du Val said. “So, I started pursuing my passion for entrepreneurship at a young age and, years later, ended up fixing a problem I noticed in the IT outsourcing industry. It’s just something I had to do. I was not going to sit around for years, listening to information I would never need in my life.”
If you wholeheartedly believe that your business idea can’t wait four years to pursue, skipping college may be the right track. Many young entrepreneurs tackle their business ideas as passion projects while they attend college, but it is important to identify at what point your business needs your full attention.
Hands-on experience in the industry you are pursuing is helpful, giving you the knowledge to see if you are on the right track. If you are unsure about starting a business without a degree, consider diving into your chosen industry to gain experience – perhaps working on your company as a side project before turning your idea into a full-time business.
Grech recommended volunteering with someone in the field before starting your own business, to learn if you like the industry, people and hours. People in some industries benefit from an apprenticeship or an internship.
“This will help you decide if you like the career enough to dedicate the time to starting your own business, and it will also help you assess your skills to know if you need further education to establish yourself as a professional in that field,” Grech said.
For Randy Wyner, founder and president of the restaurant franchise Chronic Tacos, there was no choice when it came to getting a college education. His responsibility to support his young son meant he had to get a job instead of going to school. After working his way up to a managerial position at Jiffy Lube in just a few years, Wyner knew he had all the experience and drive he needed to become a business owner. He allowed himself time to develop his entrepreneurial spirit before starting his journey.
“Hands-on learning helped me understand how to manage a business quicker, whereas college students learn mostly by memorization techniques and tricks,” Wyner said. “Following this path helped me grasp what to do and what not to do when running a business. Although college may educate you on business elements, you can’t learn how to run a business until you actually become an entrepreneur.”
While college is an investment, so is your business. You’ll need to calculate your expenses, create a budget and plan your timeline accordingly before dedicating your life to the project.
“Understanding the total costs is crucial,” Portesy said. “Before you pursue a new business opportunity, map out the total investment – purchase costs, opening inventory, and how much working capital you will need before you break even.”
Sometimes, students will go for a degree and work in an industry for a few years, or on the side, to earn money to support their entrepreneurial journey. If you don’t think you can cut it without a sustainable career to leverage your success, then you might want to focus on school first. However, if you are currently in school and feel strongly about devoting all your time to testing or growing your business, check with your college about its leave-of-absence policy and online courses.
The choice between going to college and starting a business often comes down to whether you need a sustainable income to support your business. Accounting software can help you figure this out. For examples, read about our best picks for accounting software, or our review of Wave Financial’s free accounting software.
Even if you are starting your business by yourself, entrepreneurship is not a solo feat. Portesy said it helps to rely on friends, family, business partners, franchisors or other entrepreneurs for support.
Wyner also acknowledged that his entrepreneurial success couldn’t have happened without the support of his family and friends. “Surround yourself with savvy, educated people. I was very lucky to have some strong mentors in my corner. Having experienced, wise people there to guide and support you is critical.”
If you don’t have a strong personal support system of friends and family, you can join groups in your local community or online that cater to small business owners. Networking with others who are on a similar journey to your own can be extremely helpful.
“Do your due diligence and connect with other small business owners who have succeeded and struggled,” Portesy added. “Learn about the challenges overcome, and welcome guidance and best practices.”
This is perhaps the most important question: Is there a good enough reason for you to stay in college, to drop out or study part time?
Matt Brown, co-founder and CEO of freelance management platform Bonsai, is also a volunteer advisor with the Thiel Fellowship mentor network. For the fellowship program, the Thiel Foundation selects and grants funding to high-achieving students who could do more good in the world by not attending college, and focusing on research and innovation instead.
“Everyone should think critically about the value of investing four years and an incredible amount of money into a university education,” Brown said. “Is there somewhere else where you can be learning faster, meeting more interesting people and working on projects you care about? Do you want to drop out because you have a burning need to create something and being in school blocks that, or are you dropping out because it seems cool and the Facebook guys did it?”
Dropping out of college without a good reason is just as silly as staying in school without one, Brown added. “Just think for yourself.”
Max Freedman, Sammi Caramela and Nicole Fallon contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.