How to Decide if You Should Pursue an MBA
This post is a contribution from David Mainiero at InGenius Prep.
While there isn’t necessarily a golden rule for when to apply for an MBA degree, there are some telltale signs that “the time is now…or never.” Before we get into discussing these, I should note that there is a golden rule for when in your career not to apply to business school, and that time is in your senior year of college. Almost every top-tier business school requires or strongly recommends (read: requires!) you to work for two to four years after graduation, such that you can experience the working world and understand the factors that we are going to be talking about below.
Here are three critical factors for you to consider when making the career decision to leave your job and enter an MBA program:
1. Cost-Benefit Analysis
Are you currently at a job making six figures, and due for lockstep increases in compensation or substantial performance-based bonuses?
Let’s say you’re making $120,000 per year in your fourth year out of college, and due to be making $200,000 after two years. Grab a spreadsheet, and make sure you understand the financial consequences of going to business school. You’ll be foregoing $240,000 in compensation, and paying something in the order of $110,000 for business school tuition and living expenses. Is your MBA degree going to swell your salary or give you upward mobility that is worth the sacrifice?
Maybe your MBA degree gives you the ability to make $250,000 per year after graduation instead of the $200,000 you were slated to make. Excluding stability in those numbers (no further raises) for the sake of simplicity, it would take you six years to make up the money you sacrificed and/or paid to go to business school in the first place. Bear in mind, that doesn’t even account for the time value of money, and the compounding interest you could have been making on that money if otherwise invested.
Ask yourself: Are you even going to be working in the corporate world for that long? Do you have alternative career plans like starting your own business, or working for the government or in a non-profit? If so, your MBA degree isn’t of much utility to you. However, the education and network certainly might be worth it. I don’t say any of this to dissuade you from going to business school, but rather to help you think carefully about how that degree may or may not help you with respect to your specific goals and ambitions.
There are many business schools that will consider a 28- to 32-year-old simply too old to take full advantage of its program, and will overlook your candidacy in favor of younger applicants who have had a bit more direction and consistency in their backgrounds. This makes me feel very old, considering that I would probably be disqualified too! Notable exceptions to this are members of the Armed Forces who have been serving our country.
On the other hand, there can be applicants who are too young. You may be fresh from college, or graduated college at a young age and worked for two years due to an accelerated high school and/or college track.
3. Change in Career Track
Maybe you worked at an investment bank for three years after college, thought that you were living out your dream and making boat loads of money, but have realized that spreadsheets, underwriting, and investment banking hours just aren’t your thing.
There are any number of situations where you could use business school to spur a career change. Nevertheless, what business school admissions officers will want to see is that you have taken steps inside or outside of your job to try new things and start pointing yourself in the direction you want to head. Applying to business school shouldn’t just be a hail mary heave to an end-zone with an unknown location; it should involve considerable reflection and trial-and-error experiences, at the very least.
Have your head on straight before making the momentous decision to apply to business school; don’t just cop out and think “Oh well, how can it hurt?” Not only will that sentiment be detrimental to your career, but it will find a way to show up in your applications and interviews, and hurt your chances of admission.