Throughout your elementary and college years, you pretty much had a one-way track for your career: go to school, earn a degree, and get a job. But after earning your bachelor’s degree, your path forward may not be as clear as it was before. You could be struggling to land a job, just like many college graduates. If you’ve been walking the getting-a-job-after-college path for quite some time and you’re not getting anywhere in terms of a viable career, you’re probably going to come up to a fork in the road: either go to business grad school or create your own job opportunity, such as starting your own business.
Enrolling in business school or opening your own company requires not only your dedication, but also your money. That’s where you face a tough decision: where do you put your hard earned cash—toward growing your business or earning a master’s degree? While either path can help you become more viable in your career and earning power, you can separate the pros and cons of each path by considering financing, networking, and learning potential factors:
What to Take On? Business Loans or School Loans?
Essentially, you’re deciding between taking out a student loan or a business loan. What’s going to be better for your wallet? Business loans through the Small Business Association range from $10,000 to $1 million with varying interest rates. Here’s a rough estimate: A 10-year loan can have a 4.7 percent interest rate, while a 20-year loan can have a 5 percent rate.
Loans for higher education is a hot topic these days. They are on top of mind for nearly everyone, making student debt a key talking point for politicians. The average student loan debt for undergraduate degrees hovers around $30,000, while the average for master’s degree is roughly around $50,000. The average debt for business school graduates is as high as $107,000. The rates for student loan debt vary, ranging from 4.6 percent to 7.2 percent.
Knowing what you want to do with your career can help you decide between the two types of loans. Let’s say you’ve dabbled in computer programming and want to build smartphone apps. Does your non-technical undergraduate degree help you in that path? Well, if you have a bachelor’s degree in finance, you may be able to apply what you know about finances to start and run your own business—you’ll just learn additional computer coding while growing your business. But if your degree is in communications and you have no knowledge of starting a business, you may benefit greatly from enrolling in a graduate or MBA program for computer science. You’ll gain a theoretical foundation on computer science and the knowledge in advancing your own business.
Avoid being saddled with both a business loan and a student loan by honing in on what your pocketbook can handle and what you want to do with your career.
Which Place Strengthens Your Networking Contacts?
Building your career and your business also takes a strong network. You learn and gain access to opportunities that help you land a job and grow your earning potential. When deciding between going to school and starting your business, consider which environment will help you better cultivate the contacts you need the most—networking at a business school or networking in the real world? Universities provide many resources to students to help grow their career while gaining an education. You may be able to gain a business mentor through your university’s alumni program. Sometimes, the biggest connections are made outside of school—and connecting with those contacts sooner than later (as in after graduation) moves you more quickly toward achieving your goals.
Where Are You Going to Learn The Most to Achieve Your Goals?
Learn by doing is a popular mantra, but deciding where you’re going to learn the best—the classroom or real world—will determine how successful you’ll be with your goals. Some companies value real world business experience more than the time spent in business school; however, business schools teach the fundamentals of running a company, and without the understanding of financing or accounting principles, you’re setting up yourself to fail. Additional schooling and real world experience both have advantages and disadvantages, so it’s important to carefully consider both.
Will starting your own business be a better route for your earning potential? Or will going to grad school put you in a better position in the long run? Either way, it’s not a decision to take lightly. But these three factors can help you narrow down on what path to take for a promising future.