Should I get an MBA if I Want to Buy a Small Business?

When people start to hear about this idea of buying a small business, many of them tune in intently. This scratches the itch of many people:

• Be your own boss

• Work in a small business and not a giant corporation

• Serious financial rewards

• Way to stay connected with your local community

For many veterans, this also comes in tandem with leaving the military and exploring post-military education options, such as an MBA. Getting an MBA is a very popular path for veterans after the military and, in many cases, just seems like “what you go do” after the military.

But if your long-term goal is to own and run your own small business, then do you need an MBA? If you go get an MBA, does it matter from where?

Let’s dive in.

Terms

First, let me level-set on a few terms I will use a lot here:

ETA: Entrepreneurship Through Acquisition, or the process of searching for a small business to acquire, putting together the deal to acquire it, and then running it afterward

Searcher: A person who is pursuing ETA as a strategy and “searching” for a business to acquire.

Ok, great. That should be enough to make you all dangerous.

On the MBA

Let’s first talk broadly about the MBA.

(If you want to learn more about applying to business school, I wrote a 7-part series about it, Part I of which you can find HERE)

What is an MBA designed to do?

The brochures and websites will likely tell you some permutation of “making better business leaders” or something aspirational like that.

But one of my professors told me this:

“All organizations are perfectly aligned to get the results they get.”

I like that and think it is right, so instead of looking at what MBA programs SAY what they want to do, let’s look at what the results that they get. And for that we go to their employment reports.

I took a look at three MBA programs from across the Top 20 rankings and where their students go work after graduation: Harvard Business School, the University of Virginia Darden School of Business (my own alma mater), and the University of Texas McCombs School of Business.

Here are the top 3 industries and the percentage of the class of 2023 that went there:

HBS:

• Consulting (25%

• Financial Services (41%)

• Tech (16%)

Darden:

• Consulting (46%)

• Financial Services (26%)

• Technology (10%)

McCombs:

• Consulting (43%)

• Financial Services (16%)

• Technology (15%)

Do you see a pattern here? They all send the bulk of their students to 1 of 3 industries: consulting, finance, or tech.

To note- we have less info about the size of these companies, but safe to assume they are all on the larger side.

So, as our quote suggests, MBA programs are designed to get a result that they achieve: send new graduates to big, prestigious, companies.

Not go buy a small business in their hometown.

So Should I get the MBA?

In short, I still think yes.

Let me also recognize that I went and got an MBA and am a searcher so have some serious confirmation bias going on here on my end.

Why?

Transition Time: Right after leaving the military, you may be frazzled. Even if you don’t realize it. You’ve been bouncing around the globe, deploying to exotic locales, and have probably lost communication with a lot of people from pre-military days. That is all normal.

You also may have no idea what you really want to do in life and need some time to reflect. Two years at grad school with other people who are also going through a life pivot can be a great time to do that.

Use Your Damn Veteran Benefits: If you have the GI Bill, use it. It’s amazing.

You Know Nothing About Business: I couldn’t have told you the difference between private equity and venture capital before business school and thought I was great at Excel because I could change colors in a cell (woot woot). I had a lot to learn and so do many of you.

Disclaimer: While getting an MBA does teach you a lot, do not think by any means you are an expert or know all there is to know about business.

Helps You Build a Network: If ETA is your goal, having an MBA can help you build a stronger network of business owners and investors who may be able to help you on your journey.

An MBA comes with cost: namely money and time. If your veteran benefits can cover the money part, then I think if you want to search it is worth it.

Should I get an MBA because of their ETA Program?

No.

This is a hill I will die on.

Why do I think this?

Don’t get distracted by the lights: Right now, MBA programs know that ETA is a popular thing. They want to highlight their ETA classes, ETA club, and ETA conference.

Here is the reality: None of this will actually help you close a deal.

I promise you.

ETA classes (in my opinion) are mainly designed to teach people that ETA is a path and give them a framework on how to do it, but they are not going to make you a significantly better searcher enough to justify choosing a school just because of their ETA offerings.

I caught up with a fellow searcher and MBA and he said: “I learned more about ETA in 2 months on Twitter than I did in 2 years at business school.”

I agreed.

Your ETA Education will be Minimal: MBA programs offer 2-3 ETA classes. That is less than 10% of the overall classes you will take.

I took about 30 classes at Darden, two of which were ETA (and I took all the ones available). It would have been silly for me to choose a school based on classes where I only spent 7% of my academic time.

Conclusion

Many of you will read this and think “Yes, but HBS and GSB are known as THE ETA schools!”

Yes….for research.

That doesn’t transfer totally to you talking to business owners, finding companies for sale, and closing a deal.

Investors and banks are not going to give you significantly better terms because you want to HBS.

Choose your MBA program based on location, overall academics, culture, etc…..not because of ETA.