The first step in deciding whether or not to do a homemade MBA is to list the pros and cons of a homemade MBA vs. a traditional MBA. This article will outline a few of the pros in doing a homemade MBA, although there are bound to be more.
The most obvious pro of doing a homemade MBA, and the top reason many of you are considering a homemade MBA is to save on costs. Almost all large MOOC courses are free. You may continue to do your job and live in your house, making the same salary as you are now, all while working on your homemade MBA. You might want to buy a few supplemental books, but for the most part, the cost is negligible.
Traditional MBAs are extremely expensive. Let’s just break down some of the costs of going the Traditional MBA route. There’s the cost of buying study materials and taking the GMAT. I had to travel to a different city because mine didn’t offer the GMAT, and so incurred additional costs on transit, hotel etc.
Then there is the cost of applying to many different schools. This might seem small, but a school like Harvard charges $200 just to apply. If you were to only apply to five different MBA programs, the cost would be $1,000!
The largest cost that comes to mind is tuition for two years of school, which can easily top $100,000. Many of the top schools fall right around that number, with some being even more expensive. There is also the cost of books and other school supplies.
What if you have to move in order to attend your traditional MBA program? Where will you live while finding a new home or apartment in your new city? Where will you store any furniture you’ve accumulated in the last few years? Moving always has unexpected costs associated with it, and those costs can add up quickly!
I have only listed above some of the money you would be expected to pay (or real costs) to obtain a traditional MBA.
What I haven’t mentioned yet are the opportunity costs involved with getting a traditional MBA. You will be missing out on actual income. That’s right, you just added two years worth of your salary to the total cost of a traditional MBA. For many, that opportunity cost can range from $60,000 to more than $200,000. Let’s not forget the time value of money, which is basically a way to say that the purchasing power of money can vary over time. Usually, the purchasing power of money goes down (inflation). You will also be missing out on any 401k contributions, healthcare benefits, and many investments during those two years back in school. This leads us to our second pro of getting a Homemade MBA: time.
You can work on a homemade MBA in your free time. You can do your coursework, or watch lectures whenever you’re able to within the framework of the course. For many, a homemade MBA is an after work hobby, or something done with a few spare hours on the weekend. You can design your curriculum to fit your schedule.
A traditional MBA takes two years worth of 40+ hours of classes, group meetings, studying, homework, clubs etc. You are expected to treat it like your full time job. You will put your current life on hold in order to fully immerse yourself in your new school and it’s program
3. It’s the same content.
For the first time everyone in the world with an internet connection has access to the exact same content that MBAs are getting in brick and mortar schools. The same professors teach the MOOC classes as teach the traditional. In many cases, the homemade MBA candidate is participating in the same class at the same time as someone who paid $100,000 to hear that content. If you put together a thorough homemade MBA plan, you should end up with the same business knowledge as a traditional MBA. That means you have the business knowledge to do the same quality of work as anyone with an MBA.
4. It’s becoming accepted as a credential.
These days it is not odd to see people listing their homemade MBA classes on their Linked-in profiles, resumes, or bringing their knowledge up in interviews. Employers appreciate that employees are showing initiative and working on bettering themselves outside of the office. Many highly respected schools are offering MOOCs now, which lends credibility to the classes and their content. I see this only increasing as more people become aware of MOOCs. Coursera and Ed-X are continually adding more schools and more classes.
You can even get certificates of completion and certain distinctions if you are willing to do the work and pay a small amount (in some cases). These are credentials you could bring to any employer, which make the classes even more impressive and credible.
People say the two biggest reasons to get a traditional MBA are the business content (knowledge) and the business credential (diploma). With a homemade MBA you can get that same business content, and increasingly, a very useable business credential. With lower costs and time commitments, a homemade MBA is a very smart choice for many candidates.
What do you think are some pros of homemade MBAs? Did I leave something out? Disagree with anything I’ve said? Sound off in the comments below.