Most business owners learn the important stuff on the job. So what’s the value of a degree if you know you want to set up your own business? Rachel Miller asks three successful entrepreneurs and a leading enterprise expert at Plymouth University.
With youth unemployment at about 20% for 18-24 year-olds, more and more young people are thinking of setting up their own business, rather than waiting for the right job to come along.
And with high levels of graduate unemployment, it’s perhaps not surprising that 63% of undergraduates “are now looking to start a business”, according to a survey by Start Up Britain.
But with university fees at record levels, is it better for would-be entrepreneurs to skip university and get on with establishing their own ventures?
After all, many of the UK’s most well-known entrepreneurs are not graduates — Peter Jones, Theo Paphitis, Duncan Bannatyne, Hilary Devey, Richard Branson and Alan Sugar to name a few.
However, going to university is not just about getting a qualification — it’s also about developing life skills and making contacts. What’s more, university is often the perfect place and time to start up a fledgling business.
Would Facebook exist today if Mark Zuckerberg hadn’t gone to Harvard? Would Innocent Smoothies have been born if its three founders hadn’t met at Cambridge University?
And, whether you go to university or not, is anyone really ready to run a business at the tender age of 18?
So what is the right path for a young entrepreneur?
Simon Dolan, SJD Accountancy
“I think a degree can actually be a hindrance — the further you go in education, the more narrowly defined you become, until you’ve almost got blinkers on. By the time you graduate, you have invested so much of your life in one area and amassed a wealth of knowledge so it’s hard to imagine not doing something with that. I think it limits your horizons.
With business courses, you tend to get a bit of law, a bit of accounting and a bit of marketing. But running a business is very simple, it’s about selling something that you have bought for more than you paid for it. You can bring in those other skills as you need them — but you can’t bring in get up and go.
I wouldn’t encourage anyone to set up a business before they’ve had some experience of the workplace. You can learn a lot from working for any type of company, big or small. When you start working — whether it’s in an office or flipping burgers — you quickly pick up what’s expected of you in the workplace. It doesn’t really matter what you do, every job involves selling something to someone. You don’t have to be a prima donna about the type of work you do, all experience is valuable.
Do you need an amazing idea to get started? Very few businesses actually make money from an original idea. People point to innovative companies like Google and Apple but the vast majority of companies do mundane things well. When I started my business I modelled it on another firm — but I did it better.”
Simon Dolan is owner and founder of SJD Accountancy. His autobiographical guide, How To Make Millions Without A Degree: And How to Get by Even If You Have One, is available on Amazon.
Rajeeb Dey, Enternships.com
“I wouldn’t be running Enternships if I hadn’t gone to university. While I was there, I ran the Oxford University enterprise society, Oxford Entrepreneurs. The experience was so valuable — we held weekly events, the committee was 18-strong, the budgets were considerable. It was like running a business. And the contacts I made were awesome — we invited speakers like Peter Jones and Sir Stelios Haji-Ioannou and they have become good contacts.
I started Enternships at Oxford but it was not a business to begin with. I created a basic listing site (with the help of fellow students) for Oxford undergraduates to find internships in start-ups and small firms — businesses that were looking for entrepreneurial talent but that didn’t have the resources to do the milk rounds.
When I graduated in 2008 I saw an opportunity to turn it into a business and Enternships was launched in 2009. I always knew I wanted to run my own business and this was a chance to do some good at the same time.
For entrepreneurs, it’s not a pre-requisite to have a degree. I have friends that didn’t go to university that are running very successful enterprises. As an entrepreneur, you are judged by what you do so it’s a more level playing field. But it’s about what is right for you. If you are 18 and ready to go with a business idea and a plan in place, there’s a lot of support out there.
But if you are not ready, university offers a great experience and opens up opportunities. Of course, it also means considerable debt. But if you take advantage of the extra-curricular activities like I did and throw yourself into student life, you can get a lot out of it.
However, things are changing. In recent years there has been a push by successive governments to increase the number of people going on to higher education. But now with the rise in fees my hunch is that that may reverse. People are taking a long hard look at the value of degrees.
Practical entrepreneurship courses can be useful but the best way to learn is by actually doing things. There are hard skills in business that you can teach but it is harder to teach the soft skills. A good way to learn about running your own business is to work for a start-up — you see first hand the highs and lows of being an entrepreneur. Many of our interns have gone on to set up their own business.”
Rajeeb Dey graduated with first class honours in economics and management from Oxford University. He is the founder of Enternships.com which connects students with small businesses and start-ups.
Julian Beer, Plymouth University
“Going to university helps you develop many important skills necessary to running a business — critical reasoning, doing research, learning how to present and communicate effectively. And above all, it gives you confidence.
At Plymouth University, our approach to entrepreneurship is radically different from other universities. We run the Growth Acceleration Investment Network offering all undergraduates, no matter what they study, the chance to set up their own businesses. It’s a one-stop entrepreneurial shop, with access to resources, advice, funding and business contacts.
Students can pitch ideas, develop them and formulate a business plan with our help. They get to meet inspirational people — people like Doug Richards and Dominic List. It’s about connecting students with ideas, money and support.
We are also heavily involved in local enterprise here in the South West. We bid for Regional Growth Fund money from the start and have invested £1 million in local businesses, creating 120 jobs. We work closely with Local Enterprise Partnerships and chambers of commerce and we also have links with businesses in the UK and overseas.
You can teach hard skills — and we do offer entrepreneurial modules at Plymouth — but we also provide the environment where students can develop soft skills, like negotiation, pitching ideas, making presentations and networking. They learn how to crystallise their ideas, and abandon the ones that won’t work.
Some students who come here have planned to be an entrepreneur almost from the cradle and they are up for everything we offer, they take every bit of advice, enter every competition. A lot of the new business ideas come from the arts faculty and also from science and technology. Many students set up their own businesses while they are studying, making things, selling things and trading things.
There are no national stats on how many graduates go on to set up their own business. The first destination leavers’ survey didn’t class self-employment as work. We have lobbied hard for this to change and now self-employed graduates will be counted — the first results will appear in 2013.”
Professor Julian Beer is Pro Vice-Chancellor (Regional Enterprise) at Plymouth University.
“It’s not necessary to have a degree to become an entrepreneur but it doesn’t hurt at all. Learning is a good thing and a degree shows you have a skill. It’s also a fantastic way to meet people, make contacts and get life experience.
Then there are the business courses — but the great irony is that many MBA courses that are meant to turn out entrepreneurs instead turn out merchant bankers and venture capitalists.
At university you have the ideal opportunity to set up a little business, with your mates as your first customers. You’ve actually got time to do it. If I was an employer and I met a graduate that had run a venture at university and paid some of their debts off with the revenue, I’d hire them. That means much more than all the usual academic achievements.
You do hear about so many entrepreneurs that are dyslexic and learning doesn’t work for them. And there are still plenty of old-school entrepreneurs that have learned on the job — I meet them every day. The butchers, bakers and candlestick makers — real entrepreneurs who are at the grassroots.
When you are young you should try as many things as possible and build up a network of contacts. To start with, you don’t know anything and more importantly you don’t know anyone. So you’ve got to get some kind of experience — that could be university or it could be working — but you probably won’t be ready to start a business straight away. 28 is a great age to start a business. What you need is gumption and the ability to bounce back.”
Mike Southon is an entrepreneur mentor, speaker and columnist for the Financial Mail. He is the author, with Chris West, of several books including The Beermat Entrepreneur. He graduated with a 2:2 in chemical engineering and economics at Bradford University. You can read his fascinating life story here.
Popular content on setting up in business: