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GIBS Business School, Bangalore

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How to plan the Return on Investment for an MBA Program

MBA is a popular course among the students all over the world. Different Universities in different countries offer a wide range of study courses for MBA. While opting for MBA, a student should do proper planning regarding ROI (Return on Investment). To do the course of MBA, it is always necessary to do a huge investment and it is worthy to calculate the ROI while doing such investment.

What is Return on Investment?

If we go by definition, then Return on Investment means how much return one can acquire after doing investment in any particular field. Return on Investment is done to calculate the ratio of profit and loss in any business organization. But in personal life too, we can do proper planning for ROI which is related to the income we have gained and the expenses we have made.

Necessity of planning for ROI for MBA courses

All the courses of MBA always require huge expenses. Hence, it is always suggested to do the calculation of the return that one can get after completing the studies. If doing an MBA costs Rs.10 lakhs, then it is always recommended to opt for a salary of minimum Rs. 5 lakhs per annum. This will surely give you perfect return on the investment made for doing MBA course. Many research works have been carried on in this matter.  An analysis was done on 1020 salary data of MBAs who graduated in the years 2011, 2012 and 2013. In India, this seldom happens and thus students should be extremely careful while opting for the program.

Ways to calculate ROI of MBA

Anyone may ask regarding the ways to calculate the ROI for doing any MBA course. To calculate the ROI, one can surely depend on the internet. On the internet, you will be able to know the formula to calculate Return on Investment. With the formula, it will be possible for you to calculate the return on investment. The simple way to do the calculation is:

  • Do the total for all cost of the course
  • This will include cost of books and other additional expenses which are required for schooling
  • Now figure out how much you can earn per year as an MBA
  • Now calculate the number of years will it take to cover the expenses of an MBA

Hence students always need to pay attention towards calculating the effective ROI on the investment done on MBA courses.

Factors to consider while calculating the ROI for MBA

There are several factors which are also required to be considered while you are going to start calculating Return on Investment:

  • Opting for students’ loan: There are different financial institutions and bank which are offering students loan on different terms. In case you opt for a loan, then it is to be kept in mind that you will be required to pay more than normal. This is because the interest is included with the principle amount. You can try for government sponsored loans with a subsidy so that you will not have to pay huge interest and your ROI will also remain low.
  • Course duration: The duration of the course is also a deciding factor for ROI. If you take course duration of more than two years, then it will surely take a longer time for ROI.  Well, again if you can arrange some loan from your employer then your risk will become a bit lower.
  • How much to invest:  Once you have selected the MBA course, you need to be assured regarding how much amount you should put on debt. One needs to calculate the total expenses and total salary. Before opting for the funding towards MBA course, one needs to go through the expenses and income.

 

Is MBA worthy of selecting as a career?

MBA is completely different from other professions. Unlike the degrees like Law and Medicine, MBA offers a course of a shorter period. This is the reason for which it is noticed that students can have lower debt while doing MBA. Students who want to flourish in the field of finance and marketing, always need to become an MBA. Once they can pass out successfully as MBA, they will get a better job in this field. Jobs in these fields always offer great packages too. Some of the reasons to choose MBA as a career option:

  • Getting higher package: An MBA will always get a higher salary than any normal graduate.
  • Wide career opportunities: After completion of MBA, any student can opt for any career as per his or her choice. Whether it is finance or marketing or hotel management, students will get better opportunities.
  • Widespread business network: All students after doing MBA will be eligible to be in touch with a wide range of business networks.

GIBS Business School offers a fully residential two-year MBA program with a great ROI. The average package of around 4.5 lakhs PA makes it enter the league of the best MBA colleges in Bangalore. Students are placed in various industries like Insurance, IT, Manufacturing, Market Research, Advertising, Aviation, Banks, Bio-technology, Cement, Engineering, Financial, Healthcare, Infrastructure, Oil & Gas, Pharma, Construction, Retail, etc. GIBS is proud of the fact that it has been creating leaders, managers and change agents. Most updated and relevant curriculum, with weekly seminars, business quiz sessions, innovative presentations, highly active placement cell make students get the best MBA placements in the industry.

 

Last Updated - 10 Mar 2017

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