Steve Jobs. Mark Zuckerburg. Henry Ford. Walt Disney. We read a lot about the college dropouts who went on to mega success. They risked everything for a dream and they achieved it. These are inspiring stories and they're a testament to following your passion. But are these stories so noteworthy because they're the outliers, the exceptions that prove the rule? Many would argue that, For every Bill Gates, there are hundreds and even thousands of aspiring business owners who never got off the ground. Would a business degree have helped those budding entrepreneurs? One way to answer this question is to look at how many current, successful business owners in Canada opted for a degree.
Most Medium-Sized Business Owners in Canada Have a Degree
When it comes to medium-sized businesses in Canada, the overwhelming majority have some sort of post-secondary degree. According to Innovation, Science and Economic Development Canada's Key Small Business Statistics data, more than 60 per cent of medium-sized (100 to 499 paid employees) business owners had a bachelor's or a master's degree.
Among those owners with a degree, 38.9 per cent had a bachelor's degree, while 24.2 per cent had a master's or doctoral degree. Another 20.1 per cent had a college, collège d'enseignement général et professionnel (CEGEP) or trade school diploma. At this level, 14.4 per cent of owners had just a high school diploma and 2.4 per cent had less than that.
Fewer Small Business Owners Have a Degree
These data also looked at small business owners, which means businesses with at least one paid employee but fewer than 99. While fewer small business owners had a degree than medium-sized business owners, the majority still held some sort of degree or diploma.
Those with a post-secondary degree made up 38.1 per cent, which breaks down to 23.9 per cent with a bachelor's degree and 14.2 per cent with a master's or doctoral degree. Small business owners with a college, CEGEP or trade school diploma accounted for the biggest single demographic at 30.8 per cent, while 22.9 per cent held a high school diploma. Another 8.1 per cent of those in the survey had not finished high school.
Degree Level and Business Ownership by Gender
Figures released by the Global Entrepreneurship Monitor (GEM) provided an interesting look at degree levels for women who owned businesses. According to a study conducted by Barraza & Associates and PayPal Canada, female entrepreneurs make 58 per cent less than their male counterparts, but they are generally more educated.
GEM's numbers show that 18.8 percent of female business owners had some post-secondary education compared to 17.9 per cent of men. The gap at the bachelor's degree level was decidedly bigger — 53.8 per cent of women had a college or university degree versus 46.2 per cent of men.
Is a Degree Worth It?
So it's clear that most business owners have pursued education beyond high school. With the rising costs of university education, though, many argue that the scales have tipped and it's not worth it anymore. For some, this may be true but a degree in finance, economics or business is still essential to success for most entrepreneurs.
These programs teach the fundamentals of management, productivity, marketing and analysis that can help new business owners find their niche, avoid major pitfalls and grow their businesses wisely. They also give students a framework in which to fail safely. Fall on your face in school and you can dust yourself off and learn from your mistakes. Do the same in the real world and you may never be able to recover.
And, perhaps most importantly, business schools foster an environment that develops soft skills like communication, leadership, teamwork, decision-making and emotional intelligence. These skills are what most business owners point to when asked about what ultimately led to their success.
