I’ll not say here that business courses like MBA aren’t worth it.

A lot of gurus these days fancy telling people that colleges and courses aren’t worth it. I don’t know the reason they say so, but maybe deep down they think what’s taught in colleges isn’t helpful in running an actual business.

I get their point, but think about this: don’t we need a theoretical base upon which we should build our practical knowledge?

Let’s say there are two people who join as marketing executives in a consumer goods company. The first person has an MBA in marketing, and the second person doesn’t have a marketing degree. Neither of them has any practical experience.

Who do you think has an advantage?

Of course, the first person because they know a lot of marketing theory upon which they can add practical knowledge, which they’ll gain while working. For example, when preparing a product pitch, they know they have to start by talking about the problem the product solves. This is theory. Of course, they can still pitch imperfectly. This is where practice and practical know-how come in.

Note, I’m just talking about an advantage here. In the long run, the second person can do better than the first person if they’re quick learners or curious.

So, MBA degrees aren’t the problem. The actual problem is gaining the practical know-how of a business.

How does one do that?

Assume someone has just graduated from a business school and wants to learn about how actual businesses run. While there’re a lot of ways to do that, like freelancing, tech startups, etc., I think the best way is by working in a storefront. I mean a retail store.

Because you can learn many business aspects better in retail than anywhere else.

Assuming you’re working in a retail store and notice a particular brand of juice getting picked up more by customers than any other juice brand. Then you ask questions like:

What’s so special about this juice brand? Is it the price? Is it packaging? Or is it the taste?

How much money is this juice brand spending on advertising?

How old is the brand?

Asking questions like these will help you learn a lot about consumer psychology. Why do they buy what they buy? Consumers think along the same lines whether they’re buying packaged juice or a TV subscription. Businesses may be different, but the fundamentals remain the same. For example, consumers will always prefer lower-cost products unless brand matters to them. This is fundamental. This is how consumers think.

Similarly, you can learn a lot just by looking at how the retail store orders its inventory. How do they select their suppliers? How do they negotiate price? How long does it take to repay their suppliers? You can gain a book’s worth of knowledge from each of these questions.

For example, if you learn that the retail store takes 60 days to pay its suppliers and the inventory on average gets sold out in 30 days. What that means is that the retail store’s 30-day working capital is getting financed by suppliers. It’s like an interest-free loan for 30 days.

For example, if you study the negotiation tactics of a retail store, you’ll learn a lot about how order volume affects price. If a product gets sold out in 30 days, why does the retail store keep 90-days of stock of that product? Is it because of the additional discount on order volume? If yes, what’s the discount rate? Is this a smart decision?

You know what’s the most fascinating part of a retail store? For me, it’s how they place the products. Retail stores usually place frequently bought products at the end of an aisle. The idea is to increase the average order value per customer. Before reaching the end of an aisle, a customer will go through the aisle and may discover and buy other products. I’ve also noticed products like candy and popcorn placed at the checkout. You can discover many such patterns, and the reason behind them will enlighten you.

On the accounting side, you’ll learn a lot, like how they track their inventory and expenses. How do they reconcile book inventory with the actual inventory? What’s the estimated profitability per store? What’s the average gross profit margin per product?

Also, you can learn a lot about different promotion tactics like product bundling, product sampling, coupons, etc.

Product mix is another area where you can see how a retail store balances seasonal products with regular products to maximize order value and profitability.

I can go on. But you get the idea, right?

The teachings one can get while working in a retail store apply to any other business or industry. Because, as I said earlier, the fundamentals remain the same.