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The Impact of Education on Success in Different Business Entities

By: Jack Nicholaisen author image
Business Initiative

Education is often considered a crucial factor in personal development, but what about its impact on the world of business?

Entrepreneurs and business owners often wonder whether investing in their own education, or that of their employees, will yield significant returns.

By exploring the main points of interest, such as education levels, success rates, and factors influencing success, entrepreneurs and business owners can understand the potential impact of education on their business success.

In this article, we will delve into the relationship between education levels and the success of businesses across different structures, providing a statistical analysis that highlights the main factors influencing success.

The Correlation Between Education and Business Success

Research has shown a positive correlation between education and business success.

A study conducted by the National Bureau of Economic Research found that entrepreneurs with higher levels of education were more likely to own larger, more successful businesses.

This finding is supported by data from the Global Entrepreneurship Monitor, which revealed that business owners with advanced degrees tend to have higher growth expectations and a greater likelihood of internationalization.

However, it is important to note that these statistics don’t necessarily imply causation.

A variety of factors can influence business success, and education is just one piece of the puzzle.

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The Role of Education in Different Business Structures

The impact of education on business success can vary depending on the structure of the company.

Here are some examples of how education levels can influence success in different business structures:

Sole Proprietorships:

In sole proprietorships, the owner is solely responsible for all aspects of the business.

As a result, their level of education can have a direct impact on the success of the company.

For example, a study published in the Journal of Business Venturing found that entrepreneurs with higher levels of education were more likely to recognize and seize business opportunities.

Investing in employee education can also benefit sole proprietorships by improving customer service and satisfaction.

Additionally, employees with higher levels of education tend to be more productive and innovative, which can lead to increased profitability and growth for the company.

According to research from Small Business Trends, 60% of consumers say that knowledge and professionalism are key factors in their customer service experience.

So if you are thinking of hiring, make sure they are well-educated and have professional skills.

Furthermore, providing training and development opportunities for employees can improve morale and reduce turnover rates.

According to a study by Paychex, companies that provide training programs experience 50% higher net sales per employee.

As you can see, education plays a critical role in the success and growth of sole proprietorships.

By investing in their own education or that of their employees, owners can position themselves for long-term success while also improving customer satisfaction and reducing turnover rates.


In a partnership, the success of the business is dependent on the combined skills and education levels of the partners.

According to research published in the Academy of Management Journal, businesses with a diverse range of educational backgrounds among the partners were more likely to have a broader range of expertise, leading to improved decision-making and problem-solving.

However, it’s not just the education level of the partners that matters.

According to research from Paychex, providing training and development opportunities for employees can lead to higher productivity, increased profitability for partnerships, and greater employee retention rates.

According to a study by Gallup, 59% of millennials say opportunities to learn and grow are extremely important when applying for a job.

These statistics highlight the importance of education for both partners and their employees.

By investing in their own education or that of their employees, owners can improve decision-making, problem-solving, productivity, profitability, and employee retention rates.

Limited Liability Companies (LLCs):

Limited Liability Companies (LLCs) the most popular business structure, and education can play a significant role in their success and growth.

A study published in the Journal of Small Business Management found that LLCs with highly educated owners tend to have higher levels of innovation, which can lead to increased competitiveness and profitability.

Additionally, employees with higher levels of education can bring valuable skills and knowledge to the company.

However, it’s important to note that education is not the only factor influencing success in LLCs.

Other factors such as industry trends, market conditions, and management strategies can also play a significant role.

One example of the impact of education on LLC success is illustrated in a case study by the Kauffman Foundation on a software development company called Bixly.

The company’s co-founders had extensive experience in software development but lacked formal education in business management.

After enrolling in an MBA program, they were able to apply their new knowledge to the company’s operations and saw increased growth and profitability.

Investing in employee education can also benefit LLCs.

According to research from the National Center for Education Statistics, companies that provide training and development opportunities for employees tend to have higher productivity levels and lower turnover rates.

In summary, while education is just one piece of the puzzle when it comes to LLC success, it can have a significant impact on innovation, competitiveness, and productivity.

By investing in their own education or that of your employees, LLC owners can position themselves for long-term growth and success.


With a corporate structure, the success of your business can be influenced by the education levels of both the top management and the employees.

Research from the Journal of Corporate Finance indicates that firms with CEOs holding higher levels of education were associated with better financial performance, while a study published in Human Resource Management found that employee education levels were positively correlated with company performance.

In addition to these findings, companies that invest in their employees’ education and training tend to have higher retention rates and lower turnover costs.

According to a report from the National Bureau of Economic Research, offering tuition reimbursement programs can increase employee retention by up to 8%, resulting in significant cost and time savings for the company.

It’s important to note that the impact of education on corporate success can vary depending on the industry and specific business goals.

However, overall, investing in education can lead to improved performance, innovation, and competitiveness for corporations.

Factors Influencing the Impact of Education on Business Success

Several factors can influence the extent to which education impacts business success. Some of these include:

  • Industry:

The importance of education may vary depending on the industry in which the business operates.

For example, highly technical industries may require more specialized knowledge, making education a more critical factor in success.

  • Business Model:

The business model can also play a role in determining the importance of education.

For instance, businesses that rely heavily on innovation may benefit more from having highly educated employees who can contribute to the development of new products and services.

  • Company Culture:

A company’s culture can influence the way education is valued within the organization.

In companies that prioritize learning and development, employees may be more motivated to improve their skills and knowledge, which can contribute to overall business success.

  • Access to Resources:

Access to resources, such as funding and mentorship, can also impact the relationship between education and business success.

Entrepreneurs with more education may have greater access to these resources, which can, in turn, contribute to the growth and success of their businesses.

Learning Resources for Your Business Success

Investing in education is crucial for business success, but where do you start?

Here are some learning resources that can help you develop the skills and understanding necessary to run a successful business:

Great Books

  • The Lean Startup by Eric Ries: This book provides a practical approach to starting and growing a business by focusing on customer needs and continuous improvement.

  • Good to Great by Jim Collins: This book explores the factors that distinguish great companies from good ones, including leadership, strategy, and culture.

  • The E-Myth Revisited by Michael E. Gerber: This book emphasizes the importance of building systems and processes in order to create a successful business that doesn’t rely solely on the owner’s efforts.

  • The 7 Habits of Highly Effective People by Stephen R. Covey: This book provides practical advice for personal and professional development, including strategies for effective communication and goal-setting.

  • The Innovator’s Dilemma by Clayton M. Christensen: This book explores the challenges that established companies face when trying to innovate, and offers insights into how disruptive technologies can transform industries.

These books offer valuable insights into entrepreneurship, leadership, and personal development, making them essential reading for anyone looking to succeed in the world of business.

Valuable Online Courses

There are many online courses available that can help entrepreneurs and business owners develop the skills and knowledge necessary for success. Here are a few examples:

  • Entrepreneurship 101: Who is your customer? offered by MIT OpenCourseWare: This course teaches participants how to identify their target customers and develop products or services that meet their needs.

  • Financial Accounting offered by Coursera: This course covers basic accounting principles, financial statements, and budgeting, which are essential for managing business finances.

  • Leadership and Management offered by edX: This course provides an overview of leadership styles, team management, and strategy development, all of which are critical for running a successful business.

Mentoring Programs

Mentoring programs can also be a valuable resource for entrepreneurs looking to improve their skills and knowledge.

These programs provide access to experienced mentors who can offer guidance and advice on various aspects of running a business.

Some examples include:

  • SCORE: SCORE is a nonprofit organization that offers free mentoring services to small business owners across the United States. Their mentors have experience in a wide range of industries and can provide guidance on topics such as marketing, finance, and operations.

  • Small Business Administration (SBA): The SBA offers several mentorship programs designed specifically for women, veterans, and minority entrepreneurs. These programs provide access to experienced mentors who can offer guidance on everything from writing a business plan to securing financing.

Free Networking Events

Attending networking events can also be an effective way to learn from other entrepreneurs and gain new insights into running a successful business.

These events provide opportunities to connect with like-minded individuals who may be facing similar challenges or have experience in areas where you need help.

Some examples of networking events include:

  • Chamber of Commerce meetings: Local Chambers of Commerce often hold regular meetings where members can network with other local business owners.

  • Industry conferences: Attending industry conferences can be a great way to learn about new trends and best practices in your industry, as well as connect with other professionals.

  • Meetups and Networking Groups: and similar websites offer access to a wide range of networking groups, from general business groups to more specialized groups focused on specific industries or topics.

Best Online Courses

In addition to reading books, online courses can be a great way to develop the skills necessary for business success.

There are many platforms that offer courses on a variety of topics, such as:

  • LinkedIn Learning: This platform offers courses on business strategy, leadership, marketing, and more. It also allows you to earn certifications that can be added to your LinkedIn profile.

  • Udemy: Udemy offers over 130,000 courses on a wide range of topics, including entrepreneurship, finance, management, and more.

  • Coursera: Coursera partners with top universities to offer online courses on various topics related to business. Some courses are free while others require payment or enrollment in a degree program.

  • edX: edX offers online courses from top universities like Harvard and MIT. The classes are on all sorts of topics such as entrepreneurship, leadership, marketing, and finance.

Taking online courses can provide you with the knowledge and skills needed for business success while allowing you to learn at your own pace from anywhere in the world.

More Helpful Websites

  • Entrepreneur: Entrepreneur is an online resource that provides articles, videos, podcasts, and other content related to starting and growing a business.

  • Harvard Business Review: Harvard Business Review is a leading publication in the business world, providing insights from experts in various industries on topics such as leadership, strategy, and innovation.

  • Small Business Administration: The Small Business Administration offers resources for entrepreneurs and small business owners, including information on financing options, marketing strategies, and government programs.

By utilizing these learning resources, you can gain the knowledge and skills necessary to take your business to the next level.

Whether you prefer reading books, browsing websites, or taking virtual classes, there is a resource out there that can help you achieve your goals.

In Summary…

The relationship between education and business success is an extremely complex issue, with various factors influencing the extent to which education levels impact the success of different business structures.

While research has demonstrated a positive correlation between education and business success, it is important for entrepreneurs and business owners to consider the specific needs and context of their businesses when deciding how to invest in education.

To maximize the potential benefits of education on your business success, consider the industry, business model, company culture, and access to resources when developing a strategy for investing in education and professional development.

By doing so, you can better position your business for sustained growth and success.

Don’t wait any longer to unlock the potential of education for your business success!

Schedule a call with Business Initiative TODAY!

Let’s assess your company’s needs and develop an education strategies today to propel your business to new heights.

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About the Author

jack nicholaisen
Jack Nicholaisen

Jack Nicholaisen is the founder of After acheiving the rank of Eagle Scout and studying Civil Engineering at Milwaukee School of Engineering (MSOE), he has spent the last 4 years disecting the mess of informaiton online about LLCs in order to help aspiring entrepreneurs and established business owners better understand everything there is to know about starting, running, and growing Limited Liability Companies and other business entities.