MBA

MBA

In 1990, Regina Benjamin, a doctor with a general practice in Bayou La Batre, Ala., a town of 2,500 near Mobile, spent 18 months traveling 300 miles, twice a month for the Thursday-through-Sunday MBA program at Tulane University. When she decided to become a student again, she had just opened her practice and was getting it off the ground. She was also moonlighting at an emergency room to help pay bills. It wasn't an easy time for the young physician-businesswoman. Was the MBA worth the trouble? Although the trip was a drag, Benjamin says it was a necessity, given the complexity of business. "I got a foundation to build upon," she explains. "I didn't know as much about business as I thought."

Like Benjamin, scores of entrepreneurs and seasoned professionals are heading back to the classroom. Perhaps it's because there's so much talk about the perks an advanced degree can bring -- promotions, new opportunities and big bucks. For some, it may just be the sheer desire to learn to become better businesspeople. Regardless of the reason, nearly 100,000 students a year take home the coveted MBA, about 40 percent of which are women -- a dramatic jump from 3 percent 30 years ago, according to the Graduate Management Admission Council. And salaries can be astronomical -- from $60,000 for those heavy on education and short on experience to as much as $120,000 and up (including signing bonuses) for those with the right stuff -- an MBA and time in the corporate trenches.

What's more, demand for MBAs shows no sign of waning, particularly in the financial and consulting fields, where grads draw top dollar, says Lisa Hooker, a partner in the recruiting firm of Ray Berndtson. For the last several years, companies like Andersen Consulting have snapped up 400 to 500 MBAs a year - making up 15 percent of their new hires. Why? "We need people from the top programs who can work with chairmen and boards of companies help then with changes like mergers and acquisitions. We need that skill set, particularly for our strategic services division," says David Reed director of global recruiting.

What to Expect

If you go the full-time, traditional route to an MBA, don't expect to have much of a life for two years. And, be ready to plunk down big bucks: A full-time day program including tuition, room and board can cost around $35,000 a year at top schools, says Charles Hickman, director of projects and services at AACSB International Association for Management Education, one of the premier accreditors of MBA programs. However, state schools cost much less, between $5,000-$20,000. It's an investment of time and money. But a good one, says Jens Stephan, an associate accounting professor and academic director of the MBA program at the University of Cincinnati. He calculated how long it takes to recoup your investment. "Even when you look at what it costs to get an MBA in tuition and the salary you give up, typically you earn your money back within five or six years from the start of the program. That's not a bad return on investment."

The trouble is, two years is two years, and despite the prestige of an MBA from an Ivy League school, these days there are plenty of alternative programs to choose from. Thanks to technology, you can get an MBA online (see sidebar). Online programs are just one of the options available through distance learning. There are cable and satellite television, videos, audiotapes video conferencing and other means of electronic delivery. Not only are there credit courses that count toward a degree, but there are non-credit courses for professional certification. However, know that some distance learning courses are limited to certain geographical areas and/or times of offering and some do require some on- campus time. You'll also want to check to see if the program you're interested in is accredited. For help in finding out more about distance learning, Peterson's Guide to Distance Learning Programs is useful as is Pam Dixon's Virtual College (Peterson's). Surf the educational sections of portals such as Netscape and Yahoo. Key in distance learning, and you'll find ample choice.

Professor Stephan recommends looking into executive education programs, usually held for less than a week on topics like leadership as well as business basics. Many are run out of university business schools and are good for filling specific needs, he says. Then there's always the bookstore. The management section is chock full of titles that can school you in the fundamentals. There are also educational tapes that entrepreneurs say are helpful. Consider too, one-year executive MBA programs, or going part time for as long as you need to. "In some cases you're better off taking a class down at the local CompUSA store to learn Microsoft Windows, or attending workshops or seminars on writing a business plan,'' says Jeffrey Hyman, president and CEO of Career Central, a business he co-founded in 1996 that uses technology to help companies find and hire business and technology professionals. Find out what educational programs your local chamber of commerce and professional and industry association offer. Check out community colleges too. The Net is also good for its newsletters and chat groups. "You can get advice and can form an online board of advisors so to speak,'' says Robin Ryan, a career consultant in Seattle, Washington. The downside, of course is that you won't have a sheepskin to show off. Figure out what's most important to you -- knowledge or bragging rights. Be honest with yourself. If you're not disciplined, learning on your own could prove a monumental task.

Without question an MBA is a credential -- a testament to your stamina -- and the knowledge you gain can't hurt as business grows more global and complex. So, what do you get for your time and money? "The foundation, the fundamentals of business, without which you can only go so far," says Safwan Masri, vice dean of the Columbia Business School at Columbia University. In addition to honing technical skills in finance, marketing, accounting, management, operations and the like, you'll discover the wonders of reading balance sheets, segmenting markets and analyzing cash flow. Along the way, you'll also learn novel ways of approaching problems. "You'll rely less on intuition and more on facts," says Bill Kooser, associate dean of the executive MBA program at the University of Chicago. Then there's the broad perspective you'll gain from professors and a diverse body of students who often bring with them knowledge (the average age is 27) and experience from various industries.

You'll probably learn the art of selling your ideas too. Class discussion is a big part of the curriculum. If you're not a team player, you'll have to get over it. Study groups and partnering for presentations are par for the course. Increasingly too, you get a liberal helping of international business, technology, ethics, and diversity as programs must keep step with the demands of the global economy.

However, think long and hard about whether you really need an MBA? It was the right choice for Benjamin. She says that after getting her MBA she was able to handle much of her own accounting and she saved $30,000 because she was able to process the paperwork necessary to help her business qualify for reimbursement once it was classified as a rural health clinic.

Hyman says getting an MBA was a savvy move for him too. "The network I built was incredible. A number of the first investors in my business were former classmates." Getting an MBA from Northwestern University bolstered his credibility. "Venture capitalists and other investors are interested in who you are and what you've done. All these people know professors at your school so they can check up on you pretty easily."

Eva Wisnik of Wisnik Career Consulting in New York City says the MBA mattered when she opened her business. "I learned a lot that I'll never use, but I did walk away with intangibles like confidence. I deal with a lot of lawyers, it doesn't hurt to have three letters after my name."

Julian Lange, professor of entrepreneurship at Babson College in Wellesley, Mass., argues that having a good idea for a business is not enough, "It's just the starting point. The entrepreneur that gets an MBA enhances her chances of success because she will have the fundamentals of business to go along with that idea," he says.

On the other hand, an MBA isn't for everyone. Says recruiter Hooker, "Many successful entrepreneurs don't have MBAs. If you're making hundreds of thousands of dollars, you'd have to ask yourself what the impact on your profits will be if you drop out for two years. Even if you go part time you will be distracted from your business. Who knows what might have happened with your business while your attention was turned to an MBA."

Ryan believes it's not worth it for most entrepreneurs to get an MBA, "unless you go some place like Harvard, which most people don't. Many times your own employer doesn't acknowledge your MBA with a promotion - even though they often help pay for the degree,'' says Ryan who herself faced the dilemma. "There was a time I thought I needed one, but when I considered the cost and time I decided I didn't need to prove to people that I am smart by getting an MBA."

More food for thought. With the best job market in decades, a better job could be had easily without an MBA. Or, you could also gamble and get one and earn twice your salary, depending on the economy's temperature when you graduate.

Julie Van de Graaf has always relied on instinct. The owner of the Pink Rose Pastry Shop in Philadelphia says the learning is in the doing. "I have an MBA of sorts -- it comes with running a business," says the 43-year-old who has 12 employees and revenues of more than half a million dollars. "I took a couple of courses in an executive program at The Wharton School when I opened my business more than 15 years ago. They were useful, but I got a lot out of having the students use my business as a case study." She's not opposed to going back to school, "If I went back, it would be for art. I feel like I already have an advanced business degree."

For most people though, getting an MBA is likely worth it. How you get it, is of course up to you. Says Benjamin, "You can never know too much."

The Online MBA

If you're determined to nab that MBA, and you can't afford to take time off to do it, you need look no farther than your computer. There are some 1,000 programs that have an online component and nearly 250 of them are accredited says Pam Dixon author Virtual College (Peterson's). While many may be from institutions you haven't heard of, the University of Phoenix, Duke University and Colorado State University's programs have been lauded. Finding a "pure," online program is rare though, so expect to find programs that involve the Internet and other distance learning tools.

If you think you'll get off cheap learning from the comfort of your computer, forget it. Dixon says to expect to pay as much, if not as much as five times more, per credit hour as regular tuition.

You'll also want to ask whether you will still need to make trips to campus and if there are out of state fees. Investigate who's on the faculty and see if they teach the regular MBA program as well. Find out too, what library and student services are available to you.

The advantages are clear, "You gain much flexibility, and you won't have to uproot yourself, your family or job," says Karen Hanson, executive editor in charge of career related print products at Peterson's. Though you'll have e-mail, conference calls and possibly even chat in real time with students and professors, you'll have to do without the face time and the spirited interaction that is common. The workload won't be lighter either, so you'll have to take charge of your time and buckle down and do the work. If you're not big on discipline, getting a degree online may not be your best bet. And then there's the prestige thing. Says Dixon, "In 10 years people won't care whether you got your MBA online, particularly once schools like Harvard and Stanford get online components."