Just got your acceptance letter for that prestigious MBA program — or just fantasizing about getting it? Whether you’re attracted by the ivy-covered walls and Gothic archways or the incredibly brilliant classmates and professors who you’ll be meeting, business school is a transformative experience.
However, although you’ll be learning a lot over the course of two years, business school won’t teach you everything you need to know about the working world. Here are three incredibly important things in the world of business that you can only learn outside the classroom.
1. Total Failure
Perhaps the most important skill for anyone working in business, especially an entrepreneur, is knowing how to fail. Businessman Mark Cuban has said, “I wouldn’t be where I am now if I didn’t fail … a lot. The good, the bad, it’s all part of the success equation.” No great success was ever had without a dozen failures, and every unsuccessful venture is a learning experience once you dust yourself off and keep moving forward.
In business school, however, you’re in a controlled environment, surrounded by your peers and professors, which means that your perspective on success and failure becomes much narrower. Success in an MBA program largely consists of completing essays, exams and projects — and you can “fail” those, but the consequences aren’t the same as failing in business. A business failure could mean a bankruptcy, a bad credit score from debts that were in your name instead of the business name and the added difficulty of getting a loan for your next venture.
2. People Skills
Above all, MBA programs emphasize knowledge, theories and models about how businesses operate. Most even teach negotiation techniques and management skills. These are tremendously helpful, but there is an “X factor” when it comes to making and closing business deals — people skills. Although business school does provide you with plentiful networking opportunities, it’s up to you to take advantage of them.
Having people skills is perhaps the most useful and important talent you can have in business, but you won’t find “Being Friendly 101” on an MBA curriculum. Fortunately, people skills can be learned through practice and repeated interactions, and you can also take the advice of the successful businesspeople who came before you. Billionaire entrepreneur Richard Branson, for example, has written about the importance of simply listening to people and giving them your undivided attention. “Wherever I go, I try to spend as much time as possible listening to the people I meet,” he says. “I am endlessly surprised by what new and useful information I can gather just by keeping my ears open.”
3. How to Actually Get Business Loans
Starting your own business is an intimidating yet exhilarating endeavor. Although nearly every MBA program includes a course on entrepreneurship, nothing is quite able to prepare you for it other than trying it for yourself. Unfortunately, one of the hardest parts about owning a small business is the process of establishing business credit and getting loans.
Many lenders are wary of funding small businesses and startups — and probably for good reason, given the additional risk associated with these ventures. In order to receive a loan, you’ll have to prepare an outstanding application that outlines your cash flow and collateral. You’ll need a decent personal credit score to get going and you’ll want to start building a good business credit score as soon as possible.
“Good business credit scores meant that I didn’t have to dip into personal funds to run my business,” said Levi King, who has started six businesses and is CEO and Co-Founder of Nav. “It allowed me to hire new employees and buy better equipment. It invigorated cash flow and opened doors to increased financing on improved terms. It didn’t happen over night, but the benefits of educating myself about business credit and patiently applying what I learned were life-changing. ”
Although it’s true that obtaining funding is more difficult when you’re first starting out, there are a number of small business financing options available if you know where to look for them. (You can see your personal and business credit profiles for free on Nav.)
Pro Tip: Take charge of your financial health today with a FREE Nav account. We'll protect and monitor your personal and business credit, so when it comes time to find financing you're prepared on all fronts.
So What Do You Learn in Business School?
Despite the caveats mentioned above, you do learn a great deal in business school. However, the subject matter is generally more academic and less experiential — so no, you won’t be graduating from the “School of Hard Knocks.”
Typically, your first year in business school is devoted to a core curriculum of topics that all students must learn before graduating. These topics include an overview of the major areas of business, including management, accounting, economics, finance and marketing. Once you’ve completed these requirements, you’ll take a series of electives your second year that focus on a particular specialization. Depending on the school’s offerings, you might be able to specialize in niches such as quantitative finance, product management, entertainment and media, and real estate.
Is Business School Worth It?
If you’re like thousands of other college graduates wondering about where your career will take you, you might be questioning whether business school is a natural next step. As always, however, the question of whether something is “worth it” depends on what you’re hoping to get out of it.
From Steve Jobs to Bill Gates to Mark Zuckerberg, history is filled with examples of brilliant innovators and businesspeople who never graduated from college, let alone business school. Of course, the very reason that you’ve heard of these people is because they’ve been extraordinarily successful — and would have likely been successful whether they had an MBA on their resume or not.
Whether business school is worth it is always a personal decision, and no two people will answer the question the same way. However, on the whole, business school does seem to provide an advantage in at least one very tangible aspect: income. In a 2016 survey of 275 MBA programs by the Graduate Management Admission Council, business school alumni reported that, on average, they earned a total of $1 million more over the 20 years following graduation than their peers without an MBA. What’s more, 9 out of 10 alumni said they would go back to business school if they had to choose again.
Nav is the ONLY source for businesses to see the #1 business credit score used by the SBA—the FICO SBSS Score. Get your FICO SBSS score with a Nav account.