Know your post MBA Career: Corporate Finance

It's a blast of the obvious that companies make money. Some of them make a lot of money. Of course, someone has to manage that money or else the company doesn't stay in business very long. That's where the corporate finance team comes in. A company's size, complexity, industry, and stage of development-for example, whether it's a startup or established business-determine its corporate finance department's specific responsibilities.

What “type” of Corporate Finance are we talking about?

Let’s get that right first. The term “Corporate Finance” is often used to describe two separate areas. The first is within a corporation, where finance professionals work on a wide variety of projects pertaining to the financial needs of their firm, including financial and cost analysis, internal audits, Treasury functions, and business development. This work can be characterized as a combination of cyclical work (i.e. budgeting) and project work.

The other area is within commercial and investment banking. The corporate finance divisions of these banks serve the financial needs of corporate clients by providing financing, investing options and other services (see Career Path handout on Investment Banking). This post focuses on the non-banking side of corporate finance.

What is the work profile of a typical Corporate Finance professional?

Corporate finance is a broad heading encompassing accounting, commercial and investment banking, financial services, investment management, insurance, venture capital, and corporate development and strategic planning. Corporate finance professionals are responsible for managing a business's money-forecasting where it will come from, knowing where it is, and helping its managers decide how to spend it in ways that will ensure the greatest return. They pore over spreadsheets that detail cash flow, profitability, and expenses. If you enter one of these fields, your job will center around helping companies find money to run and develop their businesses, manage their assets, acquire other firms, and plan for their financial future. A person’s experience in corporate finance depends on the size and complexity of the company for which they work, but jobs are relatively stable and include many benefits, including high salaries, travel, and numerous networking opportunities.

Few of the responsibilities of a mid-level (post MBA) manager are as follows:

• Create and monitor company budgets
• Explain financial data to company managers
• Write company financial policies
• Hire and supervise junior analysts
• Monitor company cash flow
• Build financial forecasts

What are the different functions within Corporate Finance?

Corporate finance is a very broad field and there are multiple career options within corporate finance. Some of these are:

• Treasury: The treasury department is responsible for all of a company's financing and investing activities. This department works with investment bankers who help the corporation raise capital with stock or bond sales or expand through mergers and acquisitions. Treasury also manages the pension fund and the corporation's investments in other companies. The department also handles risk management, making sure that the right steps are taken to safeguard corporate assets by using insurance policies or currency hedges.
• Divisional Financial Services : In this area, you work with each division's business team to prepare financial plans, make forecasts, and compare actual financial results to forecasts. You may also evaluate the financial consequences of alternative strategies. Responsibilities include everything from analyzing new business opportunities to restructuring a business or developing a capital spending program.
• Financial Analyst: Duties involve determining financing needs, analyzing capital budgeting projects, long-range financial planning, analyzing possible acquisitions and asset sales, visiting credit agencies to explain firm's position, working on budgets, analyzing competitors, implementing financial plans, etc. Often you will be assigned to a specific area such as revenue, planning, capital budgeting or project finance. This challenging job requires good analytical skills, computer skills and a broad understanding of finance.
• Investor Relations: Duties involve dealing with the investing public by disseminating financial information, responding to queries from institutional investors, issuing press releases to explain corporate events and organizing teleconferences with investors. This challenging job involves contacts with top-level executives and requires understanding of finance and public relations.
• Controllership: Duties involve financial planning, accounting, financial reporting and cost analysis. Will get involved in property, revenue, benefits, derivatives, lease and joint interest accounting. This job requires extensive accounting experience.
• Cash Management : This is a company's piggy bank. The cash management group makes sure the company has enough cash on hand to meet its daily needs. The group also sees to it that any excess cash is invested overnight by picking the best short-term investment options. And it negotiates with local banks to get regional business units the banking services they need at the best price.
• Tax : Activities in this area involve administering taxes (i.e., paying taxes on time-or finding loopholes to avoid paying them) and determining how to decrease the company's tax burden. Responsibilities include working with attorneys on tax litigation, researching tax laws and reporting requirements by nation (if the company is international), and keeping up with new government rules and regulations.
• Internal Audit : When most people think of an audit, they think of an outside audit-a large accounting firm like Ernst & Young checking the corporate books on behalf of the shareholders. However, most large companies have an internal audit group that regularly visits individual company branches and checks the company's accounting systems. Internal auditors perform the investigative and corrective work that ensures the external auditors don't find anything.
• Corporate Development and Strategic Planning / Business Development : Corporate development involves both corporate finance and business development. Finance experts in corporate development study acquisition targets, investment options, and licensing deals. Often they assess the best firms to buy or invest in, such as pre-IPO cutting-edge technology companies with complementary products that could either extend the company's product line or mitigate competition.

What are the job requirements for a Corporate Finance job?

• Puzzle-lovers Wanted : Most corporate finance jobs involve solving problems using a combination of intuition and analytics. If you are good at problem-solving, this may well be the job area for you. 
• Team Player Thrives: It is crucial that a financial officer be a team player, whether at the bottom or the top of a company. At the top, relationships are especially important. For a CEO, the chief financial officer is financial whiz, strategist and partner. The relationship needs to be tight.
• Crunching Numbers: These jobs require strong analytical and quantitative skills. If you have a knack for using numbers to understand patterns that influence business, you'll be of great value to your employer. If you can't crunch and analyze numbers, this isn't going to be the right job for you.
• Attention to detail: To make wise business decisions, your employer will be depending on you to get the numbers right-every time. In order to do that, you'll also need to have an understanding of and interest in business.
• Excel, Computer skills, System knowledge: You have to be computer literate with spreadsheets, word processors, presentation packages and large-scale data management tools. This is especially true for entry level positions where you will need to crunch numbers as you get involved in the details of corporate financial planning, accounting and capital-raising.  Be prepared to talk about your computer skills; fluency with Excel, VBA macros, and Reuters and Bloomberg stations are necessary.

What are the benefits  and compensation of a Corporate Finance job?

The company's size, industry and location affect compensation levels in this industry. A corporate finance professional’s pay package may include wages as well as cash or stock bonuses. The U.S. Bureau of Labor Statistics indicates that median annual wages for corporate financial analysts were $73,150 in 2008, excluding cash and stock bonuses, with the lowest 10 percent of the occupation earning less than $43,440 and the highest 10 percent earning more than $141,070. The same research shows that median annual wages for corporate financial managers were $99,330 in 2008, excluding cash and stock bonuses, with the middle 50 percent of the profession earning from $72,030 to $135,070.

Jobs in corporate finance are relatively stable, while performance in these jobs counts. But it's not like your job is going to depend on whether you're selling enough this week or getting good deals finished this quarter. Rather, the key to performing well in corporate finance is to work with a long view of what’s going to make your company successful. Many would argue that corporate finance jobs are the most desirable in the entire field of finance. Other benefits inclue:

• You generally work in teams, which helps you work with people. 
• It's a lot of fun to tackle business problems that really matter. 
• You'll have many opportunities to travel and meet people. 
• Great work life balance, closer to a 9 to 5 work schedule.
• The pay in corporate finance is generally quite good.

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With inputs from www.careeroverview.com, www.careers-in-finance.com, www.wetfeet.com, www.ehow.com, careers-in-business.com

Need help to get the best application out there for your dream Business School? Come to BizSchoolPrep Consulting. Whether you are a domestic applicant or an international one, our process is uniquely designed to understand your background, and then create a strategy whose sole aim is to get you to the business school of your dream. Know what makes us different.
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Know your post MBA Career: Consulting

What do you want to do after MBA?

“Consulting”.

What kind of?

“Strategic Consulting”.

What is that?

“umm…ehh… create the future strategy of the company’.

Isn’t that a CEO’s job requirement!?

‘umm.. ehh..”

This is the stock conversation with almost 50% of our MBA candidates/clients who mention consulting as their post MBA career choice. Consulting is one of the top choices not only amongst the applicants but also the business school students. At the same time there is also a lot of unawareness about consulting as a post MBA career. So let’s take a look at what is this career all about –

What is Consulting?

Advice for $$ – The basic mantra of consulting. As a consultant you find, and sometime fix, the issues and problems that the management sometimes can not. Consultants are recruited to identify the problems and find out solutions through providing new information, in-depth analysis, brainstorming and execution.

Is consulting an industry? Yes. A ~100+ Billion industry and growing. Most of the income is generated in the field of technology, strategy and enterprise consulting. As more and more countries develop, they try to find better ways to improve their economies and thus a large driver of growth is currently in the emerging economies.

Consulting Firms

There are two basic types of consulting firms. The largest ones deal mostly with very big clients, and focuses on issue such as such as profit and cost management, strategic alliance, emerging market entry, while the other ones keep their focus on their specific industries or business functions such as restructuring, customer management, etc. Following are the major lines of consulting services in this industry:

• Strategy: Focused on planning, strategy and services. 
• Technology: Focused on systems, IT integration and implementation, and technical support.
• Service Line: Focused on Customer Relationship, turnarounds, organizational efficiency, etc. It may involve advice as well as implementation. 
•  Industry: Focused on particular industries such as telecom, energy, health care, chemical, etc. It may involve strategy as well as implementation.

While subject knowledge experts, such as in energy, multimedia, logistics, brand, e-commerce, are in great demand in this industry, there is a lot of demand for generalists too. The common factor that the top consultancies look out for their consultants is the strategic thinking.

Consulting is similar to working in a team project. Most of the consultants belong to firms and very few consultants make it good just on individual glory. The biggest and most prestigious firms, like McKinsey, Bain, BCG, Booz, etc, are very selective and extremely competitive to get into, and usually hire only from the top 15-20 MBA schools.  

Responsibilities and Skill Sets

1. Soft skills:

• Solution driven outlook:  Consulting companies creates ideas, solutions, and new ways of approaching a problem. Intellect is their core product. Quick thinking and an ability to use data, research and experience to generate new solutions and find innovative ways of doing things is critical.
• Personality: Find the problem and fix it. Do you enjoy case studies? Are you good in relationship management? Pedigree might help you get into a top class consulting firm but your success as a consultant depends on how you perform. Consulting is a service industry and you need to have the right approach to fit into this industry. Best consultants are motivated to help their clients. Those who achieve excellence in this are more likely to find the consulting experience a satisfying career path.
• Be a Team Player: You work in a team, internal and on client side, and a large factor on your success as a consultant will depend whether others like to work with you or no. The best consultants enjoy being around the people they work with.

2. Business skills:

• Pitching: You should be good to help sell and market the firm you are working for. Other skills include writing proposals, presenting sales pitches, etc.
• Research:  You should be able to transform data into valuable information by performing research through news sources, market trends, interviewing customers, employees, etc.
• Analysis: You should know how to build DCFs or other models and how to use the statistic to drive the recommendations
• Reporting: You should be not just ready but also excellent in preparing slides after slides. Consultants eat, thinkpower point powerpoint slides.
• Implementation: You should be good in planning and executing the ideas that you present to the clients or to your own team members.
• Recruiting: One of your responsibility may be to act as a gatekeeper for recruitment and you should have the skill set to identify the right people for the right job.

How to get the Consulting job offer?

Most of the consultants get the job by legwork, persistence, and pure hard work. Following are the main components of a consulting job search

• Resume/CV: Main elements of a good consulting resume: skills, schooling, and experience. Stress the skills that are relevant to the consulting industry and though schooling can’t guarantee your success in this field, a top brand always make it easier to get the first step in. Your experience should show that you have expertise that the firm can  make use of.
• GMAT and GPA: Top consulting firm look at your GMAT and GPA pretty closely, especially during the interview shortlisting phase.
• Networking: Networking can’t cover for a lack of competence, it is an important step in getting into the shortlist when the firms decide whom do they want to interview. Many schools and sometimes the firms themselves give you the resources to network but it  is upto you to make the most of it.
• Telephone conversations: Phone calls are the best friend of a MBA student who wants to get into consulting industry. A lot happen over the telephone conversations – networking, case practice, interviews, etc. Hence, it is critical to look at how you present yourself on phone.
• Face time:  That’s the best networking tool. Travel to firm’s offices and know the partners, consultants, etc. You will probably be hired by one of those you meet.
• Solve Cases: Cases are the bread and butter for the students who want to get into consulting. You can be good at all other skill sets but if you cannot solve cases in the interviews, it is next to impossible to break into top consulting companies.

Compensation

Consulting is one of the high paying industries for new MBA graduates. Most of the MBA graduates join the consulting industry at Associate level. The base compensation for the top consulting companies such as BCG, etc starts at ~$100K-140K. Add to it the sign on bonus and the annual bonus and we are talking a first year package of ~$150K+. Some other top consulting firms (such as Deloitte) even offer to pay the tuition for the second year MBA - ~ $45K!

Keep in mind that here can be a vast difference in compensation depending upon the firm you choose to work for and the total package for the first year can vary from anywhere from ~100K+ to $150K+. However, $/hr may be a more realistic comparison because typical consulting work weeks are usually close to 80 hrs and involves a continuous traveling. Check out this article to know the other side of the consulting career.

Need help to get the best application out there for your dream Business School? Come to BizSchoolPrep Consulting. Whether you are a domestic applicant or an international one, our process is uniquely designed to understand your background, and then create a strategy whose sole aim is to get you to the business school of your dream. Know what makes us different.

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MBA for a career change? Go for it!

These days, you’d be hard pressed to find someone who stays with one company or even on one job track throughout his or her entire professional life. By some estimates, two thirds or more of graduating M.B.A.s use the degree as a means of switching careers. If you’re looking for the fast track to gain the skills and network to launch your career in a new direction, a popular way to do so is through an M.B.A. program. So-called “career switchers” look upon the degree as a way to expand international job opportunities, develop the right connections for future employment, and establish the potential for long-term income and financial stability. In fact, there’s even an M.B.A. for Career Change offered by Willamette University’s Atkinson Graduate School of Management.

I personally went to business school because I wanted to transition from finance to marketing. While I did achieve this, I also found that the M.B.A. experience opened up my mind to an array of new possibilities. I ended up in a career with a marketing focus, but it unfolded in a way I never would have considered before my M.B.A. Since application season is ramping up, I have a few words of advice for those applying to business school now or in the near future. If your undergraduate degree or work experience falls into the nontraditional category, make sure you clearly convey your long-term career goals within your application and essays, and explain in detail how you arrived at the conclusion that an M.B.A. would help you further your professional aspirations.

Business school demands a huge investment of your time, energy, and finances, so make an airtight case to the admissions committee for why you want to go into this new field. Show that you know what the industry requires, the challenges you expect to face, and convey all previous experiences that demonstrate you have the transferable skills to make this switch.

Speaking with M.B.A. Podcaster, Regina Resnick, assistant dean and managing director of the Office of M.B.A. Career Services at Columbia Business School, says demonstrating transferable skills depends on whether you’re changing industry or function or both.

“Your work experience should reflect everything that you’ve done and be complete and accurate, but you may want to put more emphasis on those things that relate most closely to your new job opportunity,” she explains. This may mean taking additional classes to bulk up your quantitative skills, or highlighting extracurricular activities that cement the reason for your career shift. Once you’re in business school, you have the opportunity to see how you fit in that new industry through coursework, student groups, internships, or networking with alumni. Self reflection and exploration are key components of the M.B.A. experience, giving students a chance to sample various fields and functions without making any firm commitments.

Embarking on a new career path with a freshly minted M.B.A. tucked under your arm isn’t just about new knowledge acquired in the classroom. It’s about leveraging your existing experience with enhanced skills, and even more so, it’s about making the most of personal relationships. All of the people, classes, activities, etc. in an M.B.A. program catapult you into a whole new sphere, and you may come out with completely new ideas that help facilitate career change in ways you would not have thought of before. For me, this is the best part and the real opportunity business school provides.

from US News Education

How to handle a low GPA in MBA Applications

A lot of times applicants are concerned that completing an undergrad degree from a second tier school or a low GPA or a non-quant major (non -  finance, economics, engineering, etc) or all of them, will be seen by the admissions committees as a major red flag in their application. It is indeed true that in when the applicant has a very weak academic grades from a lower grade schools, the top business schools may feel that the candidate’s application does not demonstrate his/her ability to stand out in a competitive, rigorous academic environment.

Looking back at our clients who had profiles similar to these, we recommend that following steps can help address this issue a great deal:

• Crack the GMAT
A low GPA can also be addressed through a high GMAT score. A great GMAT Score, especially in the quantitative section, tells the adcom that at least the applicant is smart and has the potential. Suddenly, the low GPA doesn’t automatically categorizes you into a future struggling-with-academics student.

• Take a quantitative class BEFORE applying
This can be done by building an alternative transcript and acing the course at your community college or a night school. If there are specific weak spots in your academic transcript, retake those classes and do well in them. For e.g. if you are a humanity major, take a statistics class and get a A in the course. Building such kind of transcripts as these will not only demonstrates to the adcom that you have the ability to stand out in a rigorous academic environment, but also reflects upon your seriousness and commitment about a business education.

• Stress on the analytical/quantitative aspects of your professional life 
You will need to demonstrate to the adcom that your earlier academic performance was a just a brief lapse in concentration and focus and is not a true reflection of your abilities or attitude. Rather than just writing about it in your optional essay, demonstrate this belief and confidence about your attitude through facts – in your resume and essays. Show them you have all the analytical abilities that it takes to become a successful business leader. For example, if you went on and worked you’re a** off to in a finance industry and grew quickly through ranks, let these stories say something about your passion, abilities and attitude. Through your essays and resume, demonstrate to the adcom that it would be a mistake for them to judge you just on your low GPA.

• Use of Optional Essay 
Write a convincing optional essay that explains the reasons for such kind of performance and stress on the positives – Don’t leave it for the adcom to guess why you did not perform in your undergraduate years. Be succinct. If you are taking too many lines in the optional essay explaining your low GPA, you are being defensive about it. There are few very valid reasons that can not only address a low GPA but also showcase a different kind of strength in your character and personality. For example, if you had to balance your academics in the face of a family illness, it could be used to demonstrate some a powerful personal and leadership qualities. If you were working part-time or full-time during school, it is a very strong indicator of excellent work ethics and determination while showcasing that you are someone who is passionate about your goals. If you are first in the family to go to a degree school, that in itself shows your perseverance and that you have the will and the passion to face the adversities in your life.

So don't let that low GPA spoil it all for you. Good luck!

Need help to get the best application out there for your dream Business School? Come to BizSchoolPrep Consulting. Whether you are a domestic applicant or an international one, our process is uniquely designed to understand your background, and then create a strategy whose sole aim is to get you to the business school of your dream. Know what makes us different.

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Round 1 vs Round 2 vs Round 3 of MBA Admissions

Let's start with the final recommendations first. The recommendations are:

1. Apply when you are best prepared, the sooner the better.

2. Avoid the last round.

Let's look at Pros and Cons of each round:

Round 1:

Pros:

1. You have all the seats empty.

2. No quotas/diversity seats (international, women, etc) are filled.

3. Number of applications are lower than that of Round 2.

4. Little easier to differentiate yourself with the rest of your profile pool just because there are not as many candidates applying from a pool as in Round 2.

Cons:
1. Highest quality applications (considerable number of reapps!)
2. Extra competition for top schools: Usually most applicants apply to their top schools in their initial rounds (and if don't get in, they apply to the lower ranked ones)
3. Lot of waitlists (Adcom don't know the quality of R2 and hence, follow wait and watch)

Round 2:
Pros:
1. Maximum number of admits come from R2.
2. You get more time to prepare (or wait for that promotion letter that you plan to leverage in your application)
3. Quality may not be as good as Round 1

Cons:
1. It gets crowded - Maximum number of applications (and hence, the 1st pro as well!)
2. Less number of seats to be filled (<100%)
3. Lot of quota/diversity seats already filled.
4. If you are from a pool that is well represented (Indian/Male/IT!?), chances are dim that you can differentiate well if you do not have a rock star application (and since few applicants from the same profile have already been admitted in R1)

Round 3:
Pros:
1. Very few applicants.

Cons:
1. Too late for internationals! (since notification date is just few weeks before the start of the class and visa, etc takes time. Some schools specifically discourage international applicants from applying in round 3)
2. Too few seats left. You are fighting for those 3-4 seats.
3. You need to have a "super" rock star quality to get in because all the rock stars are already in and few are hovering over your head with wait list balloons!
4. You are better off applying afresh in R1 of the next season rather than using the stale application and applying as reapp.

Need help to get the best application out there for your dream Business School? Come to BizSchoolPrep Consulting. Whether you are a domestic applicant or an international one, our process is uniquely designed to understand your background, and then create a strategy whose sole aim is to get you to the business school of your dream. Know what makes us different.

Like this post? +1 us and share it with your friends using any of our sharing widgets below!