When To Get an MBA

Undergraduate students often ask me about getting an MBA. (Disclaimer: I don’t have an MBA. My parents used to nag me about getting an MBA, but they stopped when I was invited to teach entrepreneurship to MBA students at the Kellogg School of Management.)

I have worked with a lot of MBA students in my role as founding executive director of The Garage. I’ve also worked with a lot of MBAs in industry, I have a lot of friends with MBAs, and I’ve talked to a lot of MBAs about their experiences. I’ve discussed the advice in this article with alums from HBS, GSB, and Kellogg who have all agreed with it.

I’ve come to believe there are only 3 good reason to get an MBA:

1. You need it to move up in your company, industry, or field. You work in a traditional field like consulting or banking and you need an MBA to move up because it’s part of the company culture. (Bonus points if your employer will pay for your MBA, but keep in mind they will most likely expect you to return for 2 years post MBA graduation.)

2. You picked the wrong career or industry out of undergrad and you want to do a hard shift to a new sector or role. An MBA is one of the easiest reset buttons. It’s a great way to get access to a new network of opportunities, people, and jobs. Just don’t screw up again!

3. You need a break because you’re burnt out or need some time and space to make new friends, meet a partner, or contemplate a new career path. Maybe you worked 100 hours a week in banking or founded a company and it took everything out of you. A huge portion of your time in an MBA program is spent on ski trips, wine tasting parties, and international travel. Think of it as a very pricy networking vacation.

Getting an MBA is really expensive. The annual cost of attending Harvard Business School is $112K. Students have reported earning ~$85,000 pre-MBA. So over a standard 2 year MBA program, that’s $224K in costs plus the opportunity cost over those 2 years of $170K = a total price tag of $394,000. If someone else is going to pay for your MBA like your employer, the military, or your parents, this radically changes the economics. But if you’re paying full fare and are taking out loans to do so, this is a very expensive decision. Choose wisely.

In the last few years, several MBA programs have created deferral program including Kellogg Future Leaders, Harvard 2+2, and Stanford’s deferred MBA program. These special programs give guaranteed admission to business school 2–4 years into the future. Applicants apply during their final year in undergrad. I’m a big fan of these program because it’s an insurance policy for down the road. Another huge perk: I don’t think a GMAT score is required for these programs. If you’re lucky enough to get in, this is a good option.

Keep in mind the average age of an MBA student is 28. Most programs prefer that you have work experience before attending an MBA program. With an average employee tenure of 2.8 years, this means most applicants will have had 2 jobs before entering an MBA program. Spend this time exploring companies and roles that interest you. Figure out what you’re good at, what you enjoy doing, and the types of people and companies you enjoy doing it for. Don’t just take the offer that pays the most (but make sure you can cover your expenses). This is a period of learning, not earning. Your career is a marathon, not a sprint.

There are lots of wrong reasons to get an MBA, but here are the most common:

1. Because you think you should. Someone, somewhere, sometime put this idea in your head and it stuck.
2. To impress your mom, dad, partner, crush, grandparents, or friends.
3. You don’t know what else to do.
4. To become a master of business (pun intended). Thanks to the internet, almost everything you “learn” in an MBA program can be read in a book or found on the internet for free. Discounted cash flows, anyone?
5. You want to start a company. I see this one a lot, and I’m conflicted. Logic would say, that if you really want to start a company, then start a company. Often the people who come to business school to start a company fail because they are risk-adverse people who are hedging that if the startup doesn’t work out, they still have an MBA. And this kind of risk aversion is counter productive to entrepreneurship. Furthermore, high paying job offers post-MBA are often too enticing. The median starting salary out of HBS is $148,750.

Pro Tip. Take the GMAT or GRE now. When you are in college, you are a professional student. Like a trained professional athlete, your brain is in top shape for studying and taking tests. Each month and year after college, it gets harder and harder to sit down and crack open a study guide. Take it now if you think you might want to get an MBA. Your GMAT or GRE score is valid for 5 years. Plus, this initiative will make your parents happy.

This post is dedicated to Chris. Good luck!