More than two-thirds of entrepreneurs agree that work experience is more valuable than a college degree.
- Seventy percent of business owners agreed that work experience was more valuable than a college degree.
- Twenty-one percent of business owners felt held back by their student loan debt.
- Forty percent of business owners thought it was beneficial to have experience in a variety of industries before starting a company.
What It Takes to Be Successful
The path to entrepreneurship can take many forms, but are some more common or lucrative than others? Does education really count, for instance? Or does having a certain amount of work experience prior to becoming an entrepreneur make for a more successful outcome? The team at Inc and Go recently spoke to 691 business owners across the country to find out.
In order to determine not only the most common but also the most impactful routes to business ownership, respondents were asked to share how much money their business earned, which we then compared against their educational and employment background. Entrepreneurs also shared their suggestions for work experience prior to launching a business and how they felt about the value of their college degree. If you’re curious as to how your preferred road to entrepreneurship may pan out, keep scrolling.
Educational Background of Today’s Entrepreneurs
Our study began with a look at the very first section of most resumes: education. Respondents were asked how far they went in school prior to launching their business and how they feel about those educational decisions today.
The business owners in our survey were generally an educated group, although not all of them thought higher education was worth their time. The majority (42%) finished their time in school with a bachelor’s degree, and overall, 56% of respondents were glad they had gone to college prior to starting their business. However, there was some sense of regret when it came to looming debts. The average business owner took out $22,853 in student loans – over $6,200 more than what they borrowed to start their business. Just over one-fifth specifically mentioned feeling held back by their student loans.
Despite some mixed emotions surrounding debt, the value of education ultimately spoke for itself. Those who had obtained a bachelor’s degree were earning quite a bit more in their business endeavors than the 21% who dropped out of college – nearly $24,000 more every year. While many are currently rallying against student loan debt, increased income underscores the major selling point of higher education: the potential for millions more in lifetime income.
Working Toward Self-Employment
Most entrepreneurs we spoke to had worked somewhere else prior to starting their own business. This section of our research covers their experiences and how they felt about them.
Business owners looked back on their work experience with a greater sense of appreciation than their education. Most (70%) said that their time in the workforce was more valuable than their college degree, and nearly 40% attributed their current success specifically to their work experience. Elon Musk, the richest man in the world today, echoes this sentiment, insisting that his employees do not need a college degree to work for him – rather, a track record of achievement and ability is more likely to get you on the Tesla team.
According to our respondents, skills and experience were not the primary benefits of working prior to launching a business. Instead, networking was deemed the number one most valuable aspect of working for others by 22% of business owners. Other benefits included a solid financial background, mentorship, and experience in a leadership role. It’s important to note that it is also possible to network while getting an education and in everyday life as well.
Industries That Create Entrepreneurs
This next section analyzes the industries business owners first worked in and found crucial for their current success.
Starting a business that aligns with your past work experience certainly isn’t a requirement, but it was the most common choice among our respondents. Those who launched businesses in education, for example, most often came from an education background.
Retail workers often stayed in retail when they went off on their own, but many people with this background also chose to start fashion, food, and government businesses as well. Even some tech workers credited their entrepreneurial success to their retail backgrounds. Experience in the business and information industry was credited in all categories except for construction.
An Ideal Combination of Skills and Experience
We wanted to know which specific skills and experiences entrepreneurs would have recommended to their past selves – or to anyone looking to start a business of their own today.
Business owners said time management was the most critical skill to their success, with more than half (51%) citing it as the primary skill they would have advised their past self to work on. That said, business owners whose businesses were making over $200,000 annually had worked for an average of 13.5 years before becoming an entrepreneur (compared to an average of 10 years for all respondents).
Interestingly, the single most important experience a business owner could have was learning from their mistakes. Three-quarters of respondents shared that learning from past errors or even failing at their jobs completely (26%) were some of their most crucial preparatory experiences. To glean the most value from your own failures, avoid playing the blame game and make sure you’ve placed yourself in a culture that values education and improvement.
Building a Business of Your Own
Many entrepreneurs shared similar roads and similar regrets. While many of them had gone to college, some regretted not starting their business sooner – although, in the end, their “late” starts often earned them more money. What they learned from the most, however, was ultimately their past failures.
Entrepreneurship is bound to include steep learning curves and a few valuable failures, but if you’d like to make the road a little easier, Inc and Go can help. Inc and Go’s mission is to help everyday Americans start a successful business by guiding them through the formation and startup of the company. If you’re ready to legally and efficiently start your LLC or business entity, head to Inc and Go today.
We surveyed 691 business owners in order to explore their journeys to entrepreneurship. 58% of respondents were women, 38% were men, and 3% were nonbinary, and 1% preferred not to say.
To help ensure accurate data, all respondents were required to identify and correctly answer a decoyed attention-check question. This data relies on self-reporting. There was a +/-4% margin of error, at a 95% confidence level.
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