tailor-mba-career-goals.jpg

Study links entrepreneurial success with higher education

There is a significant correlation between higher education and small-business success, according to a recent study by Behavior Research Center of Phoenix conducted in partnership with the Spirit of Enterprise Center at the W. P. Carey School of Business. According to the poll, 75 percent of the owners have a university degree or degrees from business colleges and community colleges. Among firms that are "healthy and growing," 52 percent are guided by university graduates, a third of whom have MBAs. "In the knowledge economy, everyone is going to have to be a lifetime learner," says one W. P. Carey expert involved in the study.

A recent study on the link between higher education and small-business success produces no surprises but raises some questions. How can public universities better serve a community hungry for knowledge? Should only MBAs pursue entrepreneurship? How valuable are nontraditional means of education?

Behavior Research Center (BRC), a Phoenix-based opinion research firm, recently asked the owners and managers of 400 small businesses in Maricopa County, Ariz., about the connection between education and business success. The study, which is part of BusinessTRACK Arizona — a research program conducted by BRC on behalf of the Spirit of Enterprise Center at the W. P. Carey School of Business – tapped the experiences of business owners whose companies employ between 3 and 100 employees.

According to the poll, 75 percent of the owners have a university degree or degrees from business colleges and community colleges. Forty-nine percent have university degrees, and 27 percent have MBAs.

More specifically, the correlation between higher education and the running of larger and growing businesses is strong. Among firms self-described as "healthy and growing," 52 percent are guided by university graduates, a third of whom have MBAs. That proportion drops along with the success of the company. "Growing companies are twice as likely as failing companies to be headed by an executive with an MBA," noted the study. However, 25 percent of the owners and managers reported no university or college experience.

The study also probed business owners about their interest in additional business education. If they could design a program to meet their needs, what would these business owners prefer to study? Marketing/sales drew the most response (29 percent), followed by business management (12) and accounting/legal/taxes (11). Thirty-one percent overall chose "nothing." Minority-owned business owners and managers expressed the most interest in four of the categories, with only 21 percent choosing "nothing."

Asked to rate from 1 to 10 their interest in a dozen programs that might be available from the W. P. Carey School, the business owners showed a marked interest in online delivery. Of the 12, six of the programs were Internet-based, five were seminars, and the other was research-based consulting. Five of the seven most popular would be offered online. Managers and owners of minority-owned businesses showed more interest than general respondents in each of the programs.

"In general," the study observes, "respondents are more interested in being able to access the information online than in courses and seminars that require their presence." Earl de Berge, research director at BRC, says he was surprised at the proportion of MBAs in successful small business as well as the prevalence and use of information available on the Internet.

It's a shift, de Berge says, from the days when continuing education in business consisted of going back to school, attending seminars, reading literature or hiring consultants. "People are getting better at sorting through the chaff on the Internet," says Jim Haynes, a BRC researcher who also worked on the report.

"There's a lot of self-education that goes on."

— Jim Haynes, BRC researcher

Mary Lou Bessette, director of the W. P. Carey School's Spirit of Enterprise Center, is on the front line providing that help to small business owners. Bessette approaches her job from the perspective of a small business person: prior to joining the W. P. Carey School she started her own business helping small and growing companies with their leadership and business development skills.

Not all learning has to be in a classroom, online or in a lecture hall, Bessette says. Her center, formerly known as the Center for the Advancement of Small Business, counsels about 25 businesses each week, directing them to sources both within and outside the university for additional guidance. "In the knowledge economy, everyone is going to have to be a lifetime learner," says Bessette. "We have to have a mindset to be open to discovery. I don't think we can say everybody needs a master's degree, but in order to outwit the competition and continue to be prosperous, they need to continue to learn."

Some of that self-help impacts a business in the long term, and some immediately. Margie Traylor is co-founder of SiteWire Marketspace Solutions, winner of one of the W. P. Carey School's 2005 Spirit of Enterprise Awards. Traylor can cite two uses of the Internet that made an immediate difference to a fledgling firm.

The six-year-old company, which introduces new customers to clients through Internet marketing, needed LLC designation as well as copyright status, but couldn't afford attorneys. With a little resourcefulness, Traylor and her partner, Bret Giles, found the step-by-step instructions in cyberspace and did the jobs themselves. "I may not have known what to do, but I knew where to look," says Traylor.

That is the most important benefit of higher and continuing education, according to Traylor. For a year of Saturdays, she and Giles – both alumni of ASU mdash; clandestinely wrote up the business plan for Sitewire in ASU's Memorial Union basement while they worked for MicroAge. They purposely headquartered their company near the ASU campus, to forge a symbiotic relationship between the university and Sitewire. They are W. P. Carey guest lecturers, and 60 percent of their employees are ASU graduates.

Neither Traylor nor Giles have MBAs, though Traylor plans to enroll in the W . P. Carey MBA Executive Program next year. If higher education isn't a priority, says Traylor, continuing education must be, if for no other reason than "figuring out what you don't know." She and Giles earned coveted spots in a two-year program given by Arizona Public Service's Academy for the Advancement of Small, Minority- and Women-Owned Enterprises. "A boot camp for small-business owners," is what Traylor calls it, and she says its impact has been significant.

"We focused on growing the business as opposed to working on the business," she says. Since the pair completed the regimen — which included classroom work and powwows with business advisors — Sitewire's staff and revenues doubled, propelling it from the red to the black. Traylor says the company's conversion from Web development to a "customer factory" is directly attributable to the relationship with the course's advisors.

Based on programs like these as well as the rise of for-profits such as University of Phoenix, BRC's Haynes brings up a topic for thought: "The nature of public education is changing. Competition is not something they're used to. There's an interesting potential conflict, especially with public universities, with their mandate from the taxpayers on one hand, and the marketing of their services on another."

Latest news