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Which MBAs Make More: Consultants or Small-Business Owners?

103 点作者 randomname2将近 9 年前

9 条评论

r2dnb将近 9 年前
I personally don&#x27;t find the analysis relevant. The assumption is that after taking on massive debt to finance their MBA, the graduates have a few spare hundreds of thousands of dollars to acquire a business (the article is not about starting a business from scratch).<p>I really doubt than anyone having the dollars to do that need this article, however it will mislead the rest.<p>It is also worth noting that all the figures relating to the acquired business are purely hypothetical and not data driven. Moreover businesses having this level of predictability are usually not the most affordable.<p>The thing is MBAs do not train people to be entrepreneurs, it trains prople to administrate a business already having positive cashflow and having access to some sort of leverage (debt, significant cash, etc...).<p>Unless you are already in business and feel you need a MBA to complete your skillset and move from a 200 people company to a 2000 people one, a MBA should be done to work for &#x2F; with a big firm. The only dichotomy is whether you buy this firm or not. The fact is rven in the case where you already own a company, it is still about managing a big firm.<p>I&#x27;m not sure that trying to do otherwise is the smartest use of one&#x27;s money.<p>The article is not phony, but my reproach is that the discussion is of limited practical use. It&#x27;s like asking : which former basketball players make more: sport consultants, or small clubs owners ? Then you click and find out that 1) what they call consultants are TV consultants paid by big firms, 2) the so called small clubs need to be based in Dubai. 3) it only applies to NBA players in the first place, exactly those who need free-internet advice the less.
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mbesto将近 9 年前
This exercise is poor because it&#x27;s totally unrealistic. I work with a lot of investors who buy &quot;a $1.5 million EBITDA company for 4x paying $6 million and using 50% debt financing&quot;. But they are organizers&#x2F;firms that split carry among the firm. AFAIK, if you&#x27;re not working for a PE fund, this type of investment structure is only possible if you execute what&#x27;s called a Search Fund[0]. I personally know a Kellogg MBA who did this, but it was after 2 years of working at a PE firm. The verdict is still out whether he&#x27;ll make any meaningful return from it. The other person I know who attempted it (from Stanford) gave up after a year because it was too hard to get investment. In other words, the assumptions that any MBA (typically a 26 year old with 2-3 years of real work experience) even has access to this are fairly unfounded and not typical. What is more feasible, is that MBA grads go to PE funds and are part of a deal team. Even then, those opportunities are scarce and require you to spend another ~6-7 years getting to Principal to earn any meaningful amount of compensation ($500k+ year).<p>[0] - <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Search_fund" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Search_fund</a>
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chatmasta将近 9 年前
It&#x27;s nice to see this analysis actually consider growth and expected value of money rather than simply comparing raw averages.<p>However, it neglects to consider the ceiling of income. For a &quot;typical post MBA job,&quot; sure income might increase for a few years, and even triple as the article says. But eventually, there is a ceiling. In finance for example, the funnel gets progressively narrower toward the top. At first 50% of associates might be promoted to VP, then 25% of VPs might be promoted to MD. But there are very few C level positions, so only the top few MDs will ever be promoted further. Most MDs will eventually reach max compensation, then wait around for 10 years in the hopes of being promoted to C level. If that never happens, maybe they eventually grow impatient and leave to start their own firm. But at that point they&#x27;re in the same position as the &quot;small business owner,&quot; but ten years behind and with a limited skillset.<p>Whereas for those who start a business after MBA, income might start slowly, but there is no ceiling. The business could turn into cloudflare (in the case of Matthew Prince, to use an HBS example) with a massive valuation that clearly beats any income earned by his wage slave peers. Or, the business might fail, in which case the MBA can either start another business, or jump into the same corporate ladder he originally avoided.<p>Also, this article assumes that a &quot;small business&quot; takes investment. In this case, there is very little risk to the personal salary of the MBA, since he will have investor money to pay himself a salary close to market value of his peers, but with much higher upside.<p>I&#x27;ve never understood the appeal of jumping immediately onto the corporate ladder when you&#x27;re young, limiting your upside and constraining your options. It seems much more sensible to take the risk of your own business, with a much higher upside, and a downside that allows you to either start another one or join the corporate ladder anyway. If you&#x27;re good enough to raise investment, there really is very little personal risk.
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whack将近 9 年前
This is a genuinely fascinating concept, one that I&#x27;ve never considered before. I&#x27;ve always fantasized about running my own business, but thought the only way to do that is to start a company of my own. The idea of &quot;Entreprenruship through Acquisition&quot; sounds like a very practical way for someone to marry the Entrepreneurship concept with a practical, middle-class lifestyle.<p>Are there any recommended guides&#x2F;books&#x2F;MOOCs that one can go through, in order to learn more about this?
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lquist将近 9 年前
A few notes on this article:<p>* It seems a bit crazy to me to have a newly minted MBA jump into a CEO role. Of course, this is not unprecedented with the search fund model (<a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Search_fund" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Search_fund</a>) but those are MBA grads from top 5 schools (and mostly just Stanford MBA grads)--very different from your average MBA grad * The top 5 MBA grad can expect to make on the order of $20-50M over the span of a career with a Mck&#x2F;Bain&#x2F;BCG role. Yes there is a limited number of people who make it to the top, but tbh that is much more due to people wanting to leave for other career paths than it is a weeding out.
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imcqueen将近 9 年前
I&#x27;ve discussed this topic with people in the past and I&#x27;ve heard one option is to find a family owned business that does not have a clear successor. In that scenario you can sometimes find a healthy, well-run business that is owned by people who need an exit strategy and are open to selling so they can retire.
neil_s将近 9 年前
Anyone know what kinds of small businesses this article, and the previous ones they&#x27;ve linked to, are referring to? I imagine running a donut shop is a very different beast from running a bespoke software development house or a plumbing parts company. Are they referring to all 3 kinds?
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fovc将近 9 年前
A major difference in lifestyle (and I guess also financial implications) not mentioned here or the companion article [1] is that many search funds end up buying companies in less-than-happening locations, whereas MBB have offices in major cities. So for a search fund you have to either be willing to go live in the rust belt for 5+ years or accept that your chances if finding a business in&#x2F;near a big city are lower.<p>[1] <a href="https:&#x2F;&#x2F;hbr.org&#x2F;2016&#x2F;03&#x2F;why-more-mbas-should-buy-small-businesses" rel="nofollow">https:&#x2F;&#x2F;hbr.org&#x2F;2016&#x2F;03&#x2F;why-more-mbas-should-buy-small-busin...</a>
PaulHoule将近 9 年前
It&#x27;s one of those many developments that make one reconsider the question of &quot;Why does the firm exist?&quot;<p><a href="http:&#x2F;&#x2F;www.economist.com&#x2F;node&#x2F;17730360" rel="nofollow">http:&#x2F;&#x2F;www.economist.com&#x2F;node&#x2F;17730360</a>