The MBA road less traveled
You’ve just earned your MBA—what’s next? Most MBA graduates will attempt traditional career paths, such as joining a corporation or becoming a consultant. But Professors Richard S. Ruback and Royce Yudkoff of the Harvard Business School think that a lot more graduates should consider a small business.
The trend is increasing, but acquiring a small business is still the lesser-traveled road amongst MBA earners. With a chance to be your own boss and run your own business, why aren’t more MBA graduates giving it a shot?
“Bushwhacking in the forest of opportunity”
According to Ruback and Yudkoff, students express that searching for a business to buy is too “risky.” But the professors argue that the overall lifetime financial risk isn’t much worse when you own your own business versus a career in consulting.
Apparently there isn’t a whole lot of data to compare the financial risk of different career paths. However, most MBAs are probably balking at the angst-ridden search phase. Searching for an acquisition is a full-time job that often takes one to two years, and you never know what you’re going to find. Ruback and Yudkoff compare it to “bushwhacking in the forest of opportunity.”
Decrease in stress
In fact, Stanford reports that about 26 percent of searches end without an acquisition – a frightening fail rate. However, the Harvard professors argue that most people who fail to find a business to acquire gain valuable experience and still end up landing decent jobs – not so different from a more traditional career path, where people usually change jobs within the first few years anyway.
While the search process itself can be very stressful, stress tends to decrease over time for CEOs who own their own business, as the business “shifts to align with the CEO’s skills and interests.” A consulting job, on the other hand, may be easier to land at first, but will likely get more stressful as time goes on.
Finding professional independence
Ruback and Yudkoff conclude that the risks and stresses of searching for a business to acquire are well worth it, since owning your own small business leads to “professional independence, something few ever achieve in a traditional job.”
