Planning the Return on Investment on an MBA Program – February 15,2017

Planning the Return on Investment in an MBA Program

MBA is a popular course among students all over the world. Different Universities in different countries offer a wide range of study courses for an MBA. But while any student opts for doing MBA he or she should do proper planning regarding ROI. To do the course of MBA, it is always necessary to do a huge investment and it is worth to calculate the ROI while doing such an investment.


What is Return On the Investment?

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


The necessity of planning for ROI for MBA courses

All the courses of an 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. Let us take an example. If doing an MBA costs Rs 10 lakh then it is always recommended to opt for a salary of a minimum Rs 500000 per annum. This will surely give you the perfect return on the investment made for doing an MBA course. Many research works have been carried out on this matter. An analysis was done on 1020 salary data of MBAs those have become 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 the ROI of an MBA

Here 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

  • First, do the total of all costs of course
  • This will include the cost of books and other additional expenses which are required for schooling
  • Now figure out how much you can earn per year as MBA
  • Now calculate the no of years will it take to cover the expenses of an MBA
  • Hence students always need to pay attention to calculating the effective ROI on the investment done in MBA courses.


Factors to consider while calculating the ROI for MBA

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

  • Opting for student loans: there are different financial institutions and banks 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; interest is included with the principal amount. Here you can try for government-sponsored loans with a subsidy. Here you will not pay huge interest and your ROI will also remain low.
  • Course duration: Depending on the duration of the course, is also a deciding factor for ROI. If you take a course duration of more than two years then it will surely take a longer time for ROI. Well, again if you can arrange a loan from your employer then your risk will become a bit lower.
  • How much to invest in excess salary: Once you have selected the MBA course you need to be assured regarding how much amount you should put into debt. Here one needs to calculate the total expenses and total salary. Before opting for funding for an MBA course, one needs to go through well, regarding the expenses and income.


Is MBA worthy of selection as a career?

MBA is completely different from other professions. Unlike the degrees like Law and Medicine, MBA offers a shorter course period. This is the reason why 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 an MBA they will get a better job in this field. Jobs in these fields always offer great packages too.

  • Getting a 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, in every sector students will get better opportunities.
  • Widespread business network: All students after doing an MBA will be eligible to be in touch with a wide range of business networks.

At GIBS we offer 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 & ITes, 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. The most updated and relevant curriculum, with weekly seminars, business quiz sessions, innovative presentations, and highly active placement cells make our students get the best MBA placements in the industry.


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