College or Entrepreneurship: The Pros and Cons

The Millennial generation is turning out to have a high entrepreneurial drive. According to an oDesk study, 72% of Millennials want to quit their jobs and strike out on their own, and 61% of them plan to do so within two years.

Who can blame them? The New York Times reports that “for the first time in modern memory, a whole generation might not prove wealthier than the one that preceded it.”

It’s no wonder why Millennials feel compelled to strike out as entrepreneurs. They feel a keen social and class awareness (we are the 99%!), watch movies like The Social Network, and know that their jobs won’t lead them to great wealth. Millennials know that entrepreneurship may be their only route to making a comfortable amount of money.

Not to say Millennials are looking for unrealistic “get rich” schemes – in fact, Millennials are starting modest businesses, from food trucks, to bakeries, to restaurants.

Still, 62% of these Millennials recommend completing a degree before joining a promising start-up company, even if they had the opportunity to do so. Results like this indicate that Millennials are a fairly realistic bunch who recognize the importance of finishing school.

There’s an eternal debate amongst successful entrepreneurs about the value of finishing college before starting your own business. Those who attended college tend to say that what they learned in college helped them become successful, and those that did not attend college say it would have just been a waste of time.

Let’s take a look at some hard facts.

According to the Bureau of Labor Statistics, workers with a bachelor’s degree earn 60% more than their non-degreed counterparts. In addition, the unemployment rate amongst those with a high school diploma is 7.5%, compared to 4.0% for people with bachelor’s degrees.

Those are some rough numbers for an entrepreneur whose business fails.

However, here’s the other side of the coin: 75% of graduates from private nonprofit colleges had student loans – and an average of $29,400 in debt by the end of their senior year.

That kind of debt makes it very hard to start a business. However, starting a failed business can also plunge you deep into debt — and 50% of businesses fail in the first five years.

What decision should you make?

An important fact to keep in mind is that huge student debts are often the result of attending out-of-state schools. Many college students are opting to attend community colleges to save money. Depending on the industry you’re hoping to join, the importance of the bachelor’s degree is quickly becoming a question of whether you have one or not, and where you received it from is becoming less important.

You may opt to take the middle path of attending a community college and saving money. Once you graduate, your debt will be minimal, and you’ll be able to save enough quickly to safely take out loans and start a business.

Whichever decision you make, do it knowing the consequences and alternatives you have. It’s hard to nail down what the “best” decision is with regards to entrepreneurship or college, but so long as you are deliberate, careful, and aware of the facts, you’ll set yourself up for success.

Byline:

Taylor Johnson is a business plan expert at BusinessPlanToday, which provides business plan software, free business plan templates, and business plan samples for budding and veteran entrepreneurs.