An MBA can give would-be entrepreneurs the key to turning a lifelong ambition into reality, says Kathy Harvey

Now that every business school worth its salt boasts at least one course in entrepreneurship, studying for an MBA can be a high-risk business. Even the most single-minded would-be banker can find themselves swayed by the promise of turning an MBA business plan into a real-life success. For some the enthusiasm lasts only so long as the entrepreneurship elective but a steady stream of would be entrepreneurs are opting to turn their dream into reality.

IESE, the Barcelona based international business school, says over a third of its graduates go on to start their own businesses. In the UK, business schools report continued interest in start-ups, both from MBA students and those on undergraduate programmes. Oxford University now has its own entrepreneurs' club with more than 1,500 members, and its Saïd Business School recently hosted a students' "Idea Idol" competition designed to discover the next generation of start-up stars.

When the internet bubble of the late Nineties burst many investors were unwilling to put money into start-ups. Now, just as more corporate jobs in banking and consultancy are returning, things are also looking up for would-be entrepreneurs. "The cycle has turned," says Professor John Bates, who teaches entrepreneurship at London Business School. "We've been through the nuclear winter of 2001-4 for entrepreneurs in the UK, when the cost of capital was too high." Now start-up clubs at the business school are well attended and 80 per cent of students at LBS take at least one entrepreneurship course. "Things have picked up dramatically in the past 18 months. It's not a bad time to be an entrepreneur."

But is the end of an MBA course the best time to put a good idea to the test? "It depends on how willing you are to go back into a large company," says Hedley Walls, now 18 months into his new life as chief executive of wine distribution company The Great Wine Hunter. After working in IT for five years he opted to study full-time at Warwick Business School. "Before the course I had been looking at consulting, and several companies pursued me through the business school's recruitment system, but by then I was very focused on turning my idea into reality."

The original plan, to offer guest wines to pubs, got short shrift during sessions at the bar with some of his MBA student friends. Instead of putting him off, however, it made him more determined to make the business work. "I teamed up with someone on the course who had much more commercial experience, and we honed the idea. Now we're selling directly to the general public, through the internet and more traditional marketing, and starting to see results."

The instant network of MBA students is appreciated by many MBA entrepreneurs. Richard Downs is a survivor of the internet gold rush of 1998, having successfully nurtured his travel company out of the London Business School incubator and into profit. "It's difficult, when you are an enthusiastic student, to distinguish between a good idea and a solid business opportunity, but the course, and the discussions you have with colleagues, helps you to do just that." He is cautious, however, about the benefits of teaming up with students from your MBA project group: "When you are starting out it might help to work with one or two people you were at business school with, but you have to broaden out your management team and go for experience, not just enthusiasm."

A former investment banker, he is convinced that having an MBA is becoming a real advantage when it comes to financing new ventures. "It may be true that you can't teach anyone how to be a successful entrepreneur but an increasing number of people with MBAs are going down that route. Investors may think they are a better bet. It lowers the risk."

According to John Bates, less than two percent of students who leave London Business School will decide to start up their own business immediately. The cost of paying off student debts is too high. A couple of years down the line, however, they are often in a good position to take advantage of what they learned at business school. "Some further experience in industry or consultancy helps build networks and gives people the confidence to go it alone."

Andy Utting and Carolyn Bunting, both Cranfield graduates, took this route three years after graduating, buying an established business rather than starting from scratch. Their outdoor equipment company, Terra Nova, recently entered The Guinness Book of Records with the lightest tent in the world. "I suppose you could split those of us on the MBA course into two camps, those who wanted to be part of a large corporate and those who were looking for a lifestyle change. Eventually we came to the realisation that we wanted to be our own boss and started to work out how to do it."

Meanwhile, on London's Savile Row an Oxford MBA graduate is also getting started as the new owner of an old business. Patrick Grant spotted that a bespoke tailors, Norton and Sons, was up for sale while researching the luxury goods market for his executive MBA project at the Saïd Business School, Oxford. It seemed like too good an opportunity to miss. "It was a great company with a proud history but it hadn't been making the best of its brand."

While he was planning the acquisition, lecturers and fellow MBA students all pitched in with advice. "Oxford University is a hub of entrepreneurial activity and I discussed the plans with experts in everything from finance to branding." So far, none of his MBA colleagues have purchased a Norton and Sons smoking jacket, but several have dropped into the shop. "Everyone likes the idea of a friend doing well, and doing something a little bit different so they've all been very supportive. Most of them are still paying for their MBA - but who knows, when they're hugely successful perhaps they'll be back to get measured up for a suit."