Home Articles More entrepreneurs in Australia are using MBAs to successfully run their businesses

More entrepreneurs in Australia are using MBAs to successfully run their businesses

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Once the domain of professionals climbing the corporate ladder to senior management, MBAs are increasingly becoming the qualification of choice for entrepreneurs.

While no formal education can teach some of the traits required to succeed under your own steam – passion, persistence and independence – progressive MBA programs provide invaluable grounding in broad business principles, calculated risk-taking, leadership, negotiation and decision-making; all which come in very handy in entrepreneurship.

We have seen a growing trend in Australia of professionals opting out of their corporate careers to pursue the dream of becoming their own boss by starting their own ventures, for example, as reported by Anthill here, here and here.

With the globalisation of business and rapid expansion of e-commerce, I anticipate that more and more people will seek to use their skills to pursue their entrepreneurial dreams.

However, doing business in an increasingly borderless international arena poses new challenges, and successfully switching from a nine-to-five to your own start-up often requires unique skills which can’t be learned on the job.

This is one of the reasons we are witnessing a changing dynamic in MBA programs.

MBAs are increasingly being shaped for entrepreneurship

According to a study by the Association of Business Schools (UK), entrepreneurship is one of the top five content areas students looked for in a graduate program.

Whether MBA students are looking to venture out on their own soon after graduation, or to climb onto the next step of the corporate ladder, most MBA programs now have dedicated modules targeting entrepreneurial skills.

For example, at Torrens University, our MBA program is designed to deliver relevant content with an international context, including courses such as ‘competing in a global market place’, and ‘managing business in the Asia Pacific’; as well as a capstone course in strategic management.

Where does entrepreneurship stand in Australia?

There is no shortage of SMEs in Australia, with government data released last year indicating that of our more than two million actively trading businesses, almost 96 per cent were classified as small businesses, 3.8 per cent were medium operations, with less than one per cent categorised as large.

Of course size doesn’t always equal success, with figures from the Australian Bureau of Statistics showing of more than 300,000 small businesses started every year, less than half are still trading after four years.

Research conducted by Wolters Kluwer and CCH compared data from failed and surviving small businesses between 2010 to 2013 in Australia, and found that the key determinants of success or failure included education, experienced management and the ability to manage rising costs, while rough economic times were a lesser contributor. 

When you are undertaking or expanding a new venture, often the skills that are most critical are not those that are part of your core expertise.

You may be an expert in electrical engineering or in financial consulting, but you need knowledge of applicable law, leadership skills, human resources knowhow and more, which is where the broad business concepts covered in modern MBA programs come into play.

Professor Fred McDougall is the Vice-Chancellor and President of Australia’s newest university, Torrens University Australia. Fred was Deputy Vice-Chancellor and Vice-President (Academic) at the University of Adelaide, from 2005 until 2011. Torrens University Australia is a member of the Laureate International Universities global network of over 75 institutions spanning more than 29 countries. Its MBA program, one of the newest in Australia, was developed with the support and collaboration of academics across the Laureate network.

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