I realize that this question violates many, many people?s equilibriums. What ever the career issue, there?s a collective sense that a college education is the answer. That, I believe, is the exact reason why the question must be asked. Does college prepare you for self-employment?
It?s no secret?the days of lifetime job security with a large employer are fast coming to an end. A job isn?t just harder to find, but it?s also increasingly hard to keep. Technology and off-shoring of jobs have turned this into a long term trend. A lot of people are clinging to the notion that as the economy improves the job market will ?go back to normal?. Don?t bet on it. Employers who survived the Great Recession have learned how to maintain and even grow their businesses with fewer employees.
The truly relevant question right now is what should we do in response. To default to what we know from the past could be a strategic error.
We have to create our own jobs
For millions, the next ?job? will be some form of self-employment. It?s not even a radical concept either?until roughly 1900, most people were self-employed in shops, on farms, as craftsmen or some other form of family business. We may be going back to the future. If so, the real question is, what?s the best way to get there?
An increasing number of successful entrepreneurs are beginning to warn that a college may not be the answer in today?s business environment. I agree, not the least of which because getting a college education now has substantial risks, most of which didn?t exist 20-30 years ago.
The risks of a college education
The list of risks associated with a college education is growing as the employment base deteriorates:
- Costs for a four year degree routinely exceed $100,000, which is beyond reach of most middle class families.
- Student debt is being used to cover what families can?t provide. Graduates are leaving school with tens of thousands in debt?which means they?re starting from behind.
- Opportunity cost. Money that?s spent on college is money that won?t go into a business start-up, an investment portfolio or a ?float? that could enable a young person to build a business.
- Time. The years spent in college may be an opportunity cost against gaining valuable business experience.
- Relevancy. Technology is the key to the economy and it?s changing faster than the schools can adjust.
- And finally, a college degree is no longer a guarantee of employment.
A student who graduates after having spent six figures on a degree that?s left him or her with $50-$100,000 in student loan debt may find that a $35-40,000 job doesn?t justify the cost.
College trains people for work in organizations, not for self-employment
I?ve never heard of someone getting a degree in Entrepreneurship, and I think it?s safe to say that no program exists. You can get a degree in nearly everything else?management, ?business?, accounting, marketing, finance?and while each can form the basis of self-employment, none specifically trains you in how to convert the discipline into a retail type operation.
The emphasis in degree programs leans toward the major as being an insulated function?the way it exists in a large, multi-departmental organization. The graduate would be left to his own devices to convert the discipline into a marketable form of self-employment in and of itself. And mind you, this is after paying six figures and investing at least four years of his time just in acquiring the degree!
Call me a lunatic, but I think that when you?re paying that much money for a degree in a certain career, how to convert it into self-employment should be a major part of the package.
Experience is once again the best teacher
Here are some self-employment skills that are not?and probably cannot?be taught in college:
- Ability to think outside the box
- Money management skills (as in making much out of little)
- People skills
- Negotiating skills
- Ability to prioritize
It might be thought that you can pick up some of these skills through the college experience. But I?d argue that there?s a world of difference between learning them in an environment where someone else (parents, scholarships, student loans) are paying the bills, and the real world where you?re surviving entirely on your own efforts.
Some things have to be learned by trial and error?there is no other way. It?s the reason why many poorly educated people become great successes, while many college graduates do little more than survive most of their lives.
There are two primary routes to ?learn? self-employment. Either apprentice with someone who?s already in the business you want to go into, or jump in early in your life and learn the ropes.
Sometimes you just have to take a chance and follow your passion. I think that a lot of young people (and many who are not so young) are going to find that out in the coming years.
Learning needs to be more specific when it comes to self-employment
Does all this mean that education has no role in self-employment? No, not at all. But the problem with college is that your education is compressed and force-fed at a time when it isn?t being applied in any relevant way. Most of what you?re taught you will forget. It?s part of the human condition that we don?t retain what isn?t being reinforced.
?Earn-and-learn? is a far better way to learn if you want to be an entrepreneur. Sticking your neck out and experiencing the journey will teach you more than anything you?ll learn in a classroom. And the determined person will always find a way to learn what he needs to. It can be learned from working along side of others (apprenticeship) or by searching the internet.
If you really need help in a given area, you can also take courses at a local college. For example, if you want to be a blogger, you might take courses in creative writing and/or certain web applications. Rest assured, if you need the skill for your business, you?ll get it. The determined person always does.
If you?re going to college because you need to earn a degree as a credential in order to enter a profession that can be converted to self-employment, like a doctor, lawyer or engineer, have at it. But if you?re goal is to become self-employed, good old fashioned trial and error may be the cheaper and more efficient way to go.
Thoughts? Comments? Challenges?
No college does not prepare anyone for self employment. You also need to learn patient and humbleness for being entrepreneur.
IGJ–I don’t know about humbleness (though it’s definately good for life itself) but patience most definate. We live in a world that expects instant gratification, and that’s something an entrepreneur needs to banish from his mind quickly.
My wife and I have had this discussion many times. Regarding getting a college education if you want to be a doctor, lawyer, etc. – I remember reading something in the last 6 months in a mainstream media publication (don’t have a clue which one) about how doctors aren’t trained in business matters when in college. The result is that most are clueless when it comes to the business side of things, and they are in serious financial hurt because of it.
Yes, I really do want my doctors to go to medical school, but I also want them to have some entrepreneurial training so that they are smart business owners.
Hi Marshall–That’s so true about doctors. I used to do accounting work for various doctors and did notice that pattern.
What I was driving out in the article though was that I don’t know if so many people should be going to college for various business majors if they think they want to be self-employed, especially now since it costs so much money. If you want to be self-employed in some capacity, the only way to do it is to go out and do it. Sounds rhetorical I know, but that’s the truth.
You have jump in and start paddling. You’ll make mistakes but that’s how you learn. So many parents are sending their kids to college as some sort of default setting, but if you look at the changes in employment, it could be a mistake–a very expensive one that could saddle the graduate with debt for a very long time.
Hey Kevin. I totally get what you are saying in the blog piece, and I happen to agree 110%. I just couldn’t resist throwing that in about the doctors since it is something that I recently read.
This is a tough topic. On on hand high school seniors rarely know what they want to do for a living. Unfortunately a lot of them go to expensive schools and really shoot themselves in the foot. Maybe society should instead be promoting community colleges for this group of students instead of the current all in approach.
For people that know they want to be self employed I think the best time to start is NOW. The lost opportunity cost and lost time is just too great not too pass up.
Hi Kyle–I know what you mean because my kids are at that age! But I think we need to factor self-employment into the mix of future possibilities (probabilities?) and go from there. College may not be the answer and if it is, as you said, less expensive options need to be considered. Perhaps community college + building a side business? The combination of education and experience side-by-side is unbeatable.
Hey Kevin – I do agree with you that the future college graduates are going to need to make their own field, and generate their own jobs. However, I think college will always be only beneficial to those entering the work force. You’re right about a few aspects of that as well like the need for classes to be for focused.
Great article, though, I really enjoyed the read!
Thanks Matt–I’m just no longer sure that college is THE answer for self-employment, especially when you consider what it costs to get a degree these days. And no amount of education can substitute for experience.
Students should ponder on what vocation they are going to pursue before they decide if they are going to college. If one is keen to become a medical professional, college is definitely required. However, as you have pointed out, there are certain skills that one could develop without going into college. In these low economic times, students should assess whether they already got them and work on them to earn money instead of pursuing a degree which could not assure them of a stable job and income later.
Hi Amy–20-30 years ago going to college even if you weren’t sure what it way you wanted to do for a career made sense. The cost of college was in line with what kind of income you could earn. Today, you can’t even be certain you can get a job after graduation. That can be an expensive mistake. A lot of people will be forced into self-employment either for a lack of jobs, promotions or pay increases.
It’s not true across the board of course. As you said, college is necessary for the medical field and many others. But to go to school for business or marketing or any number of disciplines holds a lot less value today.
Great points. I have 4 kids under the age of 8 and I often wonder what it will be like in 10-15 years – if it will even make financial sense to go to college for even 4 years. There is a level of personal maturity growth, responsibility, accountability, etc, that happens in college, but I have always been a huge fan of generating your own streams of income as opposed to working for someone else. I teach other people how to do the same thing. Bad thing is, school systems train kids to be employees and to look for work. It’s a growing culture and mindset in schools, all the way down to the “standardized dress code.” Creates a dangerous mindset, IMO.
You’re preaching to the choir with me! I agree, college prepares employees, not entrepreneurs. Self-employment is growing among the new “unemployables”, which could be just about anyone these days. It will really help a young person to have an entrepreneurial orientation early in life. You never know when you’ll need it!
In college, failing is looked down upon. In real life, you must fail in order to succeed.
I went through college and did well. But I can’t say it’s helped me become self-employed.
Hi Will – “In real life, you must fail in order to succeed” – you nailed it! I think that college at it’s root is an attempt to avoid failure by going along a proven path. I believe that many parents send their kids to college specifically to insulate the from failure. That’s noble, but it’s also misguided (because of what you said in your comment). And for a time that may have worked, but we’re in a very different world now and it’s no longer true.