Should you pursue an MBA?

There’s no doubt that lifelong learning is part of honing business financial literacy, but does that fact entail pursuing a master’s in Business Administration?

Currently, 183 MBA programs exist in the United States, and some reports suggest that graduates earn an average of $41,000 more per year than their peers.

Before you dive in, there are some things to consider. So, if you’re pondering making the leap back to school, then read on because this post will cover when and why to consider getting that advanced degree.

Let’s go!

Does your industry suit an MBA?  

Technically, business is about finance, so an MBA could help almost anyone seeking to advance their business financial literacy.

But so will so many other learning pursuits. The question is not if an MBA will help; it’s more about how much it will help in relation to other academic efforts.

That decision really comes down to your industry. Let’s look at some of the ones where an MBA will yield the best return on investment.

Finance and Investment

Those in banking and private equity have the most direct correlation. The deep understanding of financial modeling, capital markets, and valuation an MBA provides is essential to success, but there’s a human element at play, too.

The networking opportunities and the MBA program can open doors and provide connections that can pay big dividends for years to come.

Real Estate and Infrastructure Investment

Understanding capital allocation is a pillar of most MBA programs, and it can be argued that no industry requires a stronger knowledge of it than real estate.

Whether you are an investor or a developer, knowing how and when to properly deploy capital can be the difference between success and failure.

Having an MBA allows those in the industry to develop and employ financial modeling techniques and provide exposure to large-scale investment strategies that help with capital allocation skills.

Healthcare Management and Pharmaceuticals

Healthcare executives must have in-depth knowledge of complex financial and regulatory structures.

While these can be learned through experience, that can be a long (and painful) process. Getting an MBA helps shorten the learning curve, which is why you’ll see so many hospital systems and pharma companies showing a preference for them in their executive roles.

Industries Where an MBA is Less Essential

Getting an MBA may be helpful in financial and highly regulated industries, but in others, it may not be the best return on investment.

Small to midsized business owners in nonfinancial sectors, technology entrepreneurs, and those in media, entertainment, design, and art won’t benefit as much.

However, your industry doesn’t automatically negate the need for an MBA, nor does it make pursuing one necessary.

The best way to decide is by evaluating your current situation. Here are a few things to consider.

Time and Money

These resources are the biggest consideration for most business decisions, and getting an MBA is no different.

Most MBA programs have a high monetary threshold, but they may also have significant opportunity costs as well.

If the money and time spent on an MBA will negatively impact your business, then either delay getting one or avoid it altogether.

Alternative learning sources

The internet has democratized education, and traditional learning programs like MBAs have slowly given way to deep certifications, online courses, and online mastermind groups.

If you are an entrepreneur, these alternatives may be more valuable. However, if you’re looking for an executive role in an established business, the MBA may be the best route.

Your existing personnel situation

If your business already has a solid financial team, then getting an MBA may be a bit like gilding a lily.

Building a solid business strategy and executing it would be a better time investment.

The Bottom Line

Ultimately, there are almost innumerable ways to build your business’s financial acumen. While getting an MBA is an easily recognized credential, don’t get one based on a hunch that it will make your business or career blossom.

Weigh the pros and cons and take time to study the merits of individual programs before you take the leap into higher education.