When entrepreneurs launch companies, they typically suffer from a lack of money to pay staff and consultants. When students pursue undergraduate and graduate business degrees they lack the opportunity for real-world, hands-on experience.
Thanks to a growing trend of business schools teaming up with start-ups to provide aid to entrepreneurs, students are gaining the experience they need, while entrepreneurs garner help with business plans and marketing strategies.
Such synergies are part of a typical academic year at Chicago's DePaul University College of Commerce. At both the undergraduate and graduate levels, students savor the opportunity to immerse themselves in studying new ventures and helping the entrepreneurs at the helm grow their businesses.
At the undergraduate level, for instance, the Entrepreneurial Strategy senior seminar lets students work with a local business, in the process putting into practice lessons they've learned in economics, marketing, finance, and accounting, says Patrick J. Murphy, associate professor and entrepreneurship faculty member in the College of Commerce. "The traditional academic process doesn't prepare students effectively to become entrepreneurs," Murphy says.
"Here at DePaul, we're bringing the context into the classroom. If you want to teach entrepreneurship effectively, you have to transcend traditional boundaries. You don't learn to become an entrepreneur in a silo."
The result is a win-win, he adds. The growth of the economy and new jobs tend to come from entrepreneurial ventures. But these start-ups need resources, time, technology, space and equipment. "Students are the exact opposite," Murphy says. "They have lots of ideas and energy to offer. They're willing to get involved, and above all, they want jobs. They want to go to work . . . It's a great way to get them out there and gaining experience."
DePaul senior business administration major Natalie Meza is currently taking the Entrepreneurship Strategy class, and is part of a class group assisting a Pilsen-based not-for-profit called Taller de Jose, which helps those with limited English skills deal with credit card debt, gaining health insurance for children and other issues. Meza's group presents to the organization in June, laying out suggested strategies and desired outcomes. "We're helping them with marketing strategies and management decisions," Meza says.
"I believe the class helps us think in business model terms. We have a third-party type of observational role because it's hard for them to see what they need, being so close to the organization. . . You can't get this from reading a textbook. I feel like I'm gaining real world experience. It's a great class."
Sara Ruby, a recent graduate of DePaul's MBA program, took graduate level course Social Entrepreneurship last autumn. She was the leader of a five-student group that worked with Bright Endeavors, a Chicago start-up helping at-risk young women break the cycle of poverty by employing them in a candle making operation while providing career and employment services.
"They asked us to create a marketing and branding program for their candle-selling business," Ruby recalls. "It gave us a chance to see how we would react when faced with a business challenge, and how to attack that challenge."
Learning by doing
Kellogg School of Management at Evanston's Northwestern University is another institution where students gain insights working with start-ups. Working in groups of two to five, some students in the MBA program undertake independent study in which they generate business, finance and marketing plans for Chicago-area entrepreneurs. Their study is under the guidance of professor Steven Rogers, director of the Larry and Carol Levy Entrepreneur Center.
Both students and entrepreneurs love participating in the program, Rogers says. Students apply what they have learned in the classroom to the real world, and sometimes actually land jobs at the start-up studied.
And, Rogers says, "(Business owners) gain business plans vetted by students and professors, and take that to their bank. It's a money-raising document they couldn't have created on their own, and would have required them to pay up to six figures to obtain."
Those participating in this program are often very serious about starting their own companies. Worldwide, Kellogg has approximately 40,000 alums, and about 15 percent of them have become entrepreneurs, Rogers says. Among those who major in entrepreneurship at Kellogg, 85 percent will eventually launch their own start-ups or accept positions in other new businesses.
Across town at UIC, profs have noticed an intriguing student quirk. Often, students think of entrepreneurs as very different kinds of people, says Rod Shrader, UIC's Denton Thorne Chair in Entrepreneurship. But in the school's Entrepreneurial Consulting class, they get to know and work with entrepreneurs, helping them understand entrepreneurs are often folks much like themselves.
The entrepreneurial "clients" with whom UIC students partner vary widely. Some are medium-sized and growing but still entrepreneurial firms, while some are very early-stage start-ups with zero sales, Shrader says. "It's a clear win for the students," he adds. "It gives them something solid to dig their teeth into . . . Most students learn by doing, not by listening to lectures."
Real business in action
Community college students aren't excluded from real world business lessons. At Palatine's Harper College, the Business Simulation class focuses on established rather than start-up companies. The class combines six separate classes, three each in management and marketing.
Each of the six classes lets students partner with a real company. Those in a finance class analyze that company's finances, for instance, while those in a human resources management class delve into the firm's HR issues.
"These are small businesses, often family run," says Gary Anderson, instructor and co-coordinator in the management department. "Like so many business owners, they are totally consumed in running their businesses. They don't have time to step back and look at the larger picture. Our students do that by being one step removed from the issues . . . they bring a new perspective."
Businesses have included a high-end lawn equipment retailer, carwash, residential lawn service, bakery, sports retailer, music store and restaurant.
The benefit to students is going beyond lectures and case studies to seeing how real businesses work. By the class conclusion, they know enough about the business to present a professional, bound marketing and business plan to the business owner during a class-ending presentation.
"The issues of the business become theirs," Anderson says. "They take some ownership of the business, and often refer to it as 'our business.' "