Most owners learn from practical experience, so what's the value of a degree if you want to set up your own business? Rachel Miller asks three entrepreneurs and an enterprise expert from Plymouth University
With more then 853,000 18-24 year olds not in education, employment or training (December 2015), it is hardly surprising that some are thinking of setting up their own business. And with more than 60,000 graduates stuck in non-professional work and a further 7% of graduates out of work, it is not surprising that 15% of undergraduates are planning to start a business according to a Direct Line for Business survey.
With university fees and costs so high, might young people be better advised to skip university altogether? After all, many of the UK’s most successful entrepreneurs aren't graduates, including 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 qualifications – it’s also about developing life skills and it can be the perfect place to start a business. Would Facebook exist if Mark Zuckerberg hadn’t gone to Harvard? Would Innocent Smoothies have been formed if its three founders hadn’t met at Cambridge University? Is an 18 year old who avoids university really ready to run their own business? What path should a young entrepreneur take?
Simon Dolan, SJD Accountancy
"A degree can be a hindrance. The further you go in education, the more narrowly defined you become. Come graduation, you've 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.
With business courses, you tend to get a bit of law, some accounting, some marketing, etc, but running a business is simple, it's about selling something for more than you paid for it. You can buy in other skills – but you can't bring in 'get up and go'.
I wouldn't encourage setting up a business before gaining some workplace experience. You can learn a lot from working for others. When you start working – whether in an office or flipping burgers – you quickly pick up what's expected of you. It doesn't really matter what you do, every job involves selling something. You don't have to be a prima donna about the work you do – all experience is valuable.
Very few businesses make money from an original idea. People point to innovative companies such as Google and Apple, but most companies do mundane things well. When I started my business I modelled it on another firm – but I did it better."
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. 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 I made awesome contacts — we invited speakers such as Peter Jones and Sir Stelios Haji-Ioannou.
I started Enternships at Oxford but it was not a business at first. With fellow students I created a basic listing site for Oxford undergraduates to find internships with small firms that were looking for entrepreneurial talent but that didn’t have milk-round resources.
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 also a chance to do some good.
Entrepreneurs don't need to have a degree. I have friends that didn't go to university that are running very successful enterprises. Entrepreneurs are judged by what they do, it's a level playing field. But it’s about what is right for you. If you're 18 and have a sound business idea and plan, there's a lot of support. If you're not ready, university offers experience and opens up opportunities.
Of course, it also means considerable debt. Successive governments have sought to increase the numbers going on to higher education, but now with the rise in fees 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. Hard business skills can be taught, but it's harder to teach soft skills. A good way to learn about running a business is to work for a start-up – you see, first hand, the highs and lows. Many of our interns have gone on to set up their own business."
Julian Beer, Birmingham City University
"Going to university helps you develop many skills necessary to running a business — critical reasoning, research, learning how to communicate effectively. Above all, it aids confidence.
When I was Pro Vice-Chancellor at Plymouth University, our approach to entrepreneurship was radically different to other universities. We ran the Growth Acceleration Investment Network offering all undergraduates 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 develop ideas and formulate a business plan with our help. They get to meet inspirational people such as Doug Richards and Dominic List. It's about connecting students with ideas, money and support.
Plymouth Univeristy is also heavily involved in local enterprise in the South West. They bid for Regional Growth Fund money and have invested £1m in local businesses, creating 120 jobs. They work closely with Local Enterprise Partnerships and chambers of commerce and have links with businesses in the UK and overseas.
You can teach hard skills, but students can also develop soft skills, such as negotiation, pitching ideas, making presentations and networking. They learn how to crystallise their ideas and abandon ones that won't work.
Some students have long planned to be an entrepreneur and they are up for everything we offer. A lot of the new business ideas come from the arts faculty and from science and technology. Many students set up their own businesses while studying, making things, selling things and trading things.
National stats on how many graduates go on to set up their own business were always difficult to track down. The first destination leavers' survey didn't class self-employment as work. We lobbied hard for this to change and now self-employed graduates are counted. In 2013/14 5.9% of graduates went on to self-employment/freelance/running their own business."
"It's not necessary to have a degree to become an entrepreneur but it doesn't hurt. Learning is good and a degree shows you have a skill. It's also a fantastic way to make contacts and gain life experience.
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 business, with your mates as your first customers. You have time to do it. If I was an employer and interviewed a graduate who had run a venture at university and paid some of their debts off with revenue, I'd hire them. That means much more than all the usual academic achievements.
You hear about so many entrepreneurs with dyslexia, people for whom formal learning doesn't work. Plenty of old-school entrepreneurs have learned on the job – the butchers, bakers and candlestick makers – real grassroots entrepreneurs.
When you're young you should try as many things as possible and build up your contacts network. To start with, you don't know anything or anyone. You need to gain experience – that could be university or 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."