Being self-employed is a goal that many people have, and it is one that is more attainable today as more businesses operate online. In 2016, the Bureau of Labor Statistics found that the annual income of self-employed individuals was almost double the national average of those who worked for someone else. Also, the BLS projects that there will be more than 10 million people who are self-employed in the United States by 2026.
Choosing the right undergraduate degree program can prepare a person for a future as a successful small business owner. Since they often manage a variety of tasks that larger businesses divide into departments, small business owners need to have a solid understanding of communication, marketing, finance, human resources and strategic planning to successfully start and maintain a business. This is true in any industry.
Although many degree programs include classes that teach students those skills, choosing the right option depends on other needs. Understanding the most valuable types of degree programs, how they differ and what their strengths are can help a student pick the right one for running a small business in the future. These are the top 10 picks and what students can expect to learn.
1. Business Administration
There are several levels of business administration degrees. An associate’s degree prepares students for basic management roles. To learn more about the processes of developing, running and maintaining a business, a bachelor’s degree is better. A Master of Business Administration is considered the gold standard for business owners and aspiring executives. Although there is a Doctor of Business Administration degree, it is more for people who want to become professors or work as executives for large enterprises.
A degree in business administration gives graduates the benefits of having greater career flexibility and higher earning potential. With a bachelor’s degree program, students focus on courses in management theory, business development, organizational strategy, marketing, human resource management, finance, communications and more. They learn how to identify financial, personnel and other issues in an organization and develop strategies to improve them. They learn how to manage logistics, supply chains and other important aspects of a business. A master’s degree program includes more in-depth information in these subjects and gives students an opportunity to choose a specialty or cognate, such as health care administration, nonprofit leadership, finance, information technology or a variety of others. Some four-year bachelor’s degree programs also offer specialties.
The skills students learn in a business administration program are all useful for small business owners. For example, learning how to manage a supply chain provides useful skills in finding good vendors or suppliers. Finance knowledge helps small business owners understand cash flow, profit margins and other important aspects of financial health. Marketing skills give them the ability to identify a target market, research competitors, develop better strategies and work toward being a leader in their local or online market.
2. Business Management
Although a business management degree is similar to a business administration degree, there are some differences. However, the key difference is that business management focuses more on the human aspects of managing a business, and business administration focuses more on the strategic goals of the organization. While both degrees are practical and useful for future businesspeople, the right choice depends on long-term goals and the desired business model.
For small business owners, a degree in management still provides useful knowledge about operating a business. Students in this program also learn how to set goals and develop strategies for them. There are classes about business law, managing a workforce, managing finances, developing business plans, handling supply and logistical issues and more. A business management degree is especially useful to a person who wants to develop a good human resource planning strategy. Knowing how to identify talent needs, find the right talent and maintain good employees are all valuable for long-term sustainability of a business.
About 50% of all small businesses fail within the first five years, and more than 80% of those that fail do so because of cash flow problems that are often attributed to accounting deficiencies. For a small business owner, a degree in accounting can be an asset in financial forecasting, planning and more. With a better understanding of cash flow and accounting principles, a business owner can also save the expense of hiring an accountant. Another important benefit of an accounting degree is that it gives a person the ability to analyze risks. This is helpful to small business owners in making sound financial decisions.
A bachelor’s degree in accounting is usually sufficient for providing a graduate with the right knowledge to run a small business. Some people choose to continue and earn a master’s degree. For someone who wants to start a small accounting business, this is an essential step. However, it is not essential for running a retail store or a business that does not provide tax preparation or financial services. An accounting bachelor’s degree program includes classes in business law, statistics, economics, management principles, auditing, software applications, managerial accounting and financial accounting. Since it includes economics, business law and management, it gives students some useful knowledge about properly launching and maintaining a business.
For business owners, the ability to understand finance is paramount for long-term success. A degree in finance is different from a degree in accounting. While students learn some of the same information, accounting focuses more on managerial accounting, financial accounting and risk analysis. Finance is a broader field that includes financial analysis, financial planning and strategy development. For small business owners who plan to grow or expand their operations into other areas, finance may be a better degree path because of the strategic applications.
Some students who want to start and grow a small business earn a master’s degree in finance. However, a bachelor’s degree provides enough useful knowledge and skills for maintaining a business. Programs include courses in accounting, investments, entrepreneurial finance, portfolio management, asset management, securities and related topics. Also, students can choose some electives related to business administration. This gives them the ability to choose classes that support their future goals.
Since the internet made global and local business more competitive, digital marketing is a vital part of success today. Businesses that know how to leverage the power of analog and digital marketing perform better and often become authority figures in competitive markets. A degree in marketing gives a business owner the skills to identify one or more target markets, research trends, identify needs, develop powerful strategies and adapt to shifts that relate to marketing. In addition to saving a new business the expense of hiring a marketing manager or a consultant, having a degree in this field provides a graduate with other valuable skills.
A marketing degree program includes classes in business management, business-related writing, retailing principles, advertising, financial management, product management, strategy development, brand management, consumer behavior and more. These are all valuable classes for business owners since they teach them how to manage products, people and budgets. There are also classes that teach them how to make digital presentations, use software and understand some components of SEO. These classes can be helpful in doing everything from developing a business pitch to running a blog or social media accounts for a business.
6. Business Technology
One lucrative degree path for aspiring business owners today is business technology. One school reported that more than 90% of its business technology graduates were employed, self-employed or continuing their education. Since nearly every aspect of many types of businesses can be conducted fully or partially online today, business technology helps prepare graduates to keep up with competition and trends. Some schools also offer a bachelor’s degree program in this field with a specialty in a specific area, such as small business, accounting or hospitality management.
Computer technology, software applications, business law, business planning, accounting, management, economics, marketing, finance, human resources and several other useful classes are included in most program course lists. With skills from these classes, graduates can plan a small business, find and manage staff, manage finances, manage marketing and handle other important operative tasks. Since they also learn the basics of economics, they are better prepared to keep up with the technological aspects of a changing economy or market and adapt to any shifts. The skills from this program give a graduate the ability to develop useful strategies.
There are also elective courses in the degree program, and this freedom gives students the ability to pick classes that apply to their area of interest. For example, a person who wants to start a business that serves an immigrant population may choose to study another language that is common in the area. Someone who wants to start a restaurant or another business in the hospitality industry may find some electives in hospitality management. There are many possibilities, and the combination of technology and business is a powerful addition to a business venture in any industry.
One of the better degree choices for an aspiring business owner who is also an entrepreneur is economics. Many universities offer these degrees as bachelor’s programs. Economics involves studying every aspect of the economy. Since today’s businesses often span international borders physically or virtually, having a good understanding of every level of the economy helps. Entrepreneurs who understand the local, state, national and global economies are better positioned to succeed and predict important changes.
As one economics expert said, a governor in India put a bounty on cobras as a way to reduce the overpopulation problem. Instead, that created an industry for breeding them, and an economist would have been able to predict that outcome. Economics knowledge gives graduates the ability to predict outcomes based on science and human action.
An economics degree program includes classes in microeconomics, macroeconomics, accounting, statistics, algebra, calculus and other areas. People who are mathematically inclined will likely find the program enjoyable. There are also classes in information systems, business applications and related topics to broaden a student’s abilities to understand the basics of operating a business. It helps to take extra business classes to learn how to plan a business and apply strategic skills to business development.
Today, many aspiring business owners want to become entrepreneurs. For those who have multiple business venture ideas, entrepreneurship is a good degree path. Although economics is a good choice as well, a degree in entrepreneurship provides a more focused education that fits the needs of an aspiring entrepreneur. There are several colleges that offer this degree program. Although some are newer programs, other entrepreneurship programs have been around for more than a couple decades. This degree is ideal for a person who wants to start multiple ventures, offer consulting services to others or offer financial analyst services.
Courses for a bachelor’s degree program usually include writing, communication, physical and biological sciences, management systems, economics, business law, financial management, business growth management, business creation and leadership. What students learn in relation to planning, launching and maintaining a business is slanted toward new ventures. This degree can be helpful for any aspiring business owner since having knowledge about running a new venture is especially useful.
Some schools offer a similar degree that includes vital business education, which is a degree in business administration with an emphasis in entrepreneurship. This path includes all the information included in the business administration section, and it typically includes three or more courses that focus specifically on important aspects of entrepreneurship.
Today, many people are interested in offering B2B sales or services. For those who want to choose a degree path that supports connecting with other businesses or commercial clients, a degree in communication is a good choice. Students learn a lot about research, writing and even broadcasting. The knowledge that they gain from a communication degree can be useful in finding clients, maintaining client relationships, planning a business and managing a marketing strategy. This degree path is good for aspiring business owners who want to provide social media management, PR management or other services to businesses or high-net-worth clients.
It is important to note that a communication degree does not include as many business classes as a business management or a business administration program includes. Communication degrees include communications theory, interpersonal communication, speech, research methodology, news writing, public relations, broadcasting, marketing and similar courses. Although there may be some mathematical applications, the program does not focus on accounting, finance, business strategy or business development. The skills to launch a business require knowledge of basic accounting and finance. Students who choose a degree in communication to offer specific types of services can still benefit greatly from it. However, for a well-rounded education, it helps to take electives or extra courses in the areas of deficiency.
This is an especially useful degree for an aspiring business owner who wants to learn how to interact better with people. A good understanding of psychology can help people learn how to identify behavior trends in people. They can learn how to predict what people will do or why they make the decisions they do. Since psychology also covers the various stages of development in life, it is useful for business owners who plan to serve a diverse population or multiple age groups. For example, it can be a useful degree for a business that relies heavily on sales tactics. When a business owner wants to sell a service or a product that requires making house calls, phone calls or video calls, being able to understand people better is a major benefit.
Psychology degree programs include a lot of research and writing, which means that they help people develop their communication skills. The studies on human behavior also help with HR management and interpersonal communications with customers. Most programs include courses in developmental psychology, abnormal psychology, critical thinking, statistics, research methodology, English, communication and elective studies. Some programs allow students to pick a specialty area. When choosing electives and planning to open a business eventually, it helps to pick classes that apply to a specific type of business. It helps to take management classes, marketing classes and finance classes. Since being bilingual is a benefit today, language courses are also helpful.
Choosing a Degree To Become a Small Business Owner
While some universities and colleges offer certificate programs and associate’s degree paths for some of the above options, it is better to choose at least a four-year degree program. Some aspiring business owners who want to grow beyond a small business in the future may decide to pursue a master’s degree.
The benefits of these educational programs are not limited to prospective students and aspiring small business owners. They also apply to people who recently opened a small business or have been operating one for years. For current small business owners, now is a good time to enroll in a program. The degrees in this list are available online from a variety of schools. While some offer on-campus programs for those who prefer a classroom setting, the convenience and flexibility of online programs allow busy people with businesses, jobs or families to earn a degree and maintain their other commitments.