Smitten by Blue Devil

Application process for B School is surely a pain , especially for the first timer like me .

while I had earlier targeted R1 , looks like all my application will reach in R2 . It has to be R2 otherwise I will have to target R1 next year , which in all possibility will delay my greatness by 1 year. Here through this blog I ll share my experiences with people who are or will experience the same kind of tumultuous feeling at this time of year.

From the information I have till now , A typical B School application process can be divided into 3 parts , 70 -80 % is taken by essays , rest by filling the personal details and recommendation letters . Essays are important , as they are supposed to present a complete picture and the suitability of candidate to the school .

From my research and taking into criteria most of the applicants take US B Schools are the best . May be to the point that I ll choose 20-25 US schools over 3-10 UK schools.

I am still framing my essays , and trying to present a complete package . I have still not taken any essay service help but I think they can provide me with strategic inputs to the essays.
Editing is not required as some of my friends are one of the most knowledgeable guys in English

Hopefully I should be done by next week for my Fuqua essays . lets see.
my tip1 : start preparing for common essays very much in advance : 1 . like short term goals and long term goals .
2. Perosnal qualities .

How much money ISB makes

Like other mortals even I am desirous of doing an MBA . This mediocre IT job is one of the reason , as it is for most of the people but somehow I have been labeled as a person who will do justice to my talent only if I become a Manager . Given an option I would rather become a Hedge Fund Manager than a typical Project Manager who is the most hated guy on the floor .I know I am ambitious ,overtly right .

So one fine day I decided to do an MBA . after delving about the possible routes to enter into an MBA and considering my limited verbal abilities the final conclusion was ;scoring a 700 in GMAT is easier than 99 %ile plus in CAT . I am a veteran of sorts here as 2007 is going to be my 4^th attempt at CAT .

So the first choice in India was ISB . Its annual fee is a whopping 18 lakhs , I compared this fees to the fees of some of the top B schools in the world

Harvard tuition fee / year = 42000 USD = Rs 1680000

Considering the fact that that is US I do not know why is ISB charging so much . But I am no one to ask this question .

Suddenly it occurred to my mind that Education business is not a bad business at all .
So I just calculated how much money this ISB is making ?
Note: My purpose in no means to demean ISB or any other educational institution, If I get an admission into ISB I ll definitely take it.

Let me do a rough calculation of the costs of running an institute like ISB .all currency figures until and unless mentioned are in INR.

1 > Faculty –
Education business major cost comes from Faculty salaries. I tried to find out salaries of FT professors in one of the IIMs and MDI. Though the information is not concrete but from some sources it appears that in addition to consultancy earnings the salary of a Professor ranges from 3-10 (I would be happy if someone comes and refutes it).

I ll take the average salary or CTC to 15 lakhs for a faculty in ISB. This will also take care of the costs associated with visiting faculty.
Total costs = 128 * 15 lakhs (128 is from ISB site) = 19.2 crores = 20 crore (I like round figures)

2> Administrative and annual maintenance costs: I assume that the extra 3 lakh / head (apart from 15 lakhs ) from 480 students.

480 * 3 = 14.4 crores . 14.4
Though 14.4 crore INR will take care of the maintenance cost of a much larger University spread over much large area say BHU .

So I give 10 Crore to costs in these category. ( also includes Food )
3> Cost of Land : Though land value appreciates over a period of time but still taking the annual interest cost for say 20 crore ( the price is assumed after some data for land prices at 2000 prices in Hyderabad outskirts . )
I have taken the interest costs as 10% and other 10 % as opportunity costs . makes it 20 %

Simplicity : 20% of 20 crore 4 crore / year .

Let us not discuss about building as I have taken too much in the maintenance cost .

Total costs : 20 + 10 + 4 = 34

I am being generous here , I know . But if they come tomorrow and say that they can’t maintain ISB building in 10 crore then I ll have to say “ then there is some problem “

STREAMS OF REVENUES

1> Application fee :

2> Tuition fees :

3> Executive programs:

1> No of applicants is arrived by information from current students from ISB and Pagal guy of course .

no of applicants		7000
fee / application		2500	Total	17500000

2> This is a well known figure , so no need to elucidate .

tuition fees		1500000
no of students		480	Total	720000000

3>this has been arrived from the data given for entire year 2007 from ISB’s site .

no of executive programms		40
avg cost / course		100000
no of attendees		20	Total	80000000

Total revenues : 817500000 Rs = 82 crores .
Total yearly profit : 82 – ( 34 ) = 48 .

some people might have a problem here as I have not deducted the costs associated with conducting executive education programms . I did not because I assumed that ISB is not paying extra to professors for that .Also I have not deducted the cost of admission process which I thought would be minuscule.

48 crores annual profit on an investment of 35 crores ( 20 land and 15 ( let me know if this fig is less ) building ) is not bad at all . I am seriously thinking of starting B School after 10 years . Supply will never meet the demand

Note : If someone finds a major flaw in calculations please point it out , if it is minor leave it . Remember we are talking in terms of crores