I’m a huge proponent of education. Secondary education introduces you to new concepts, new ideas, new information, and even introduces you to new people who can help you advance in later stages of life. While they’re certainly not a requirement to become an entrepreneur, business school and similar accredited programs can help you understand the fundamental principles necessary to create and launch a reasonably successful business.
Unfortunately, there’s a limit to how much classroom learning can prepare you for the real world. Just as a course in elementary physics won’t guarantee that you’ll safely execute a long-distance motorcycle jump, a course in business management won’t guarantee your success as an entrepreneur.
In particular, I’d like to highlight these five common problems that business school (or, should I say MOST business schools) won’t prepare you for:
1. Cash flow management. In business school, you’ll learn about cash flow management. You’ll learn its definition, why it’s important, and how to manage it in a real environment. But school won’t prepare you for the continuous demand that cash flow management makes. If you want to keep enough cash on hand for your business to stay afloat, you’ll need to constantly check your bank statements and pay close attention to your bills and invoices (both incoming and outgoing). One misstep, and even a business that’s profitable on paper could end up with a cash shortfall that causes a chain reaction in the company’s finances.
2. Decision fatigue. Decision fatigue is a real phenomenon that sets in when you make too many decisions in a given period of time. Even small decisions, such picking out what outfit to wear or what to eat for breakfast, can add up and take their toll on your ability to make future decisions without stress. Business school teaches you concepts like SWOT analysis, which help you to make better, more informed decisions, but it doesn’t teach you how to handle yourself when you face dozens to hundreds of small, yet significant decisions every day. Delegation, relaxation techniques, and decision management can all help you stay fresh.
3. Actual consumer behavior. As entrepreneurs, we like to pretend that we can predict consumer behavior. We perform advanced market research, commit to large surveys, and pay good money to people to try and evaluate our products. Business school teaches you how to do all these things and how to make a “best guess” at your consumer’s behavior, including price points and buying habits. Unfortunately, real audiences rarely behave according to these “best guesses” — at least not exactly. Variables in those reactions can — and will — come up eventually, and when they do, you need to know how to handle them without panicking and starting over.
4. Time management. Business school teaches you all kinds of things that you’ll need to do on a daily, weekly, and monthly basis, from day-to-day upkeep to broad strategic changes under pressure and changing circumstances. What business school doesn’t teach you is that there’s never enough time to do all these things. As an entrepreneur, you’ll be constantly faced with more tasks than you or your team can handle. Instead of figuring out who will do what and when, you’ll need to figure out what you can get away with not doing and how fast you can rush through the others without sacrificing their quality.
5. Likeability. Though entrepreneurship shouldn’t ever be reduced to a simple popularity contest, it’s ignorant to think that likeability doesn’t matter in the business world. If you want to be successful, you have to have some degree of charisma. If you want to find partners and employees, you need to be friendly, approachable, and worthy of respect. If you want to find investors and clients, you need to be reasonable, sociable, and open-minded. There’s nothing in school that can help you shape your personality, and if you’re not a very likeable person, you’ll struggle making the connections you need to succeed in business. That’s a blunt way to put it, but it’s a fact. The good news is that most likeable characteristics — like smiling, conversing politely, and making eye contact — can be developed.
Colleges and universities are useful and important, but I believe that experience is an even better teacher. Only by going through the process of starting and running a business will you learn the potential drawbacks, pitfalls, and obstacles of entrepreneurship. Failure is a great lesson — as long as you can get over the initial sting — but experiencing firsthand is far different than reading about it on paper. So if you’re reading this and you’re concerned about making mistakes, don’t be. Learn what you can in business classes and in various articles online like this one, then get out there and start doing things.
For more content like this, be sure to check out my podcast, The Entrepreneur Cast!