Newswise — Through a partnership with a local bank, undergraduate students in a new capstone business course at the University of Missouri-Rolla are getting some real-world lessons in entrepreneurship by forming two companies, developing a product to sell and writing a business plan. Soon they will present those plans to a loan board to secure funding for their business start-up.
This is all part of a new mind set in business school capstone courses, says Dr. Ray Kluczny, associate dean of the UMR School of Management and Information Systems and chair of the school's business administration program. The course, SM&IS 397, allows students to gain valuable hands-on experience in a real-world business environment.
In addition to the nuts-and-bolts of running a business, the course is also teaching students to be responsible citizens of their community. Each company has chosen a local charity and will spend time throughout the semester performing community service. In addition, any profit the companies make after paying back their loans will go to their charity.
Phelps County Bank in Rolla saw the value this course can offer to Missouri's future small businesses, says Ryan Morris, a commercial loan officer at the bank. The bank will provide funding to each of the course's businesses " just as it would to any other small business that applies for a loan.
"Many small-business owners don't get the chance to make mistakes without major implications," Morris says. "They don't get a trial run at it, so a course like this provides very valuable business experience."
In traditional capstone courses, students haven't been given the responsibility to make decisions that have financial and product implications, says Dr. Madhu Reddy, assistant professor of business administration and information science and technology at UMR and course instructor. Students may have held internships in a company and worked on projects, but they lack that comprehensive experience starting a business provides.
"One of the goals of this course is to give students those opportunities in an environment where they can make mistakes," Reddy says. "We're trying to encourage them to learn about the problems they'll face in the business world after graduation."
Entrepreneurship is the principal mission of UMR's School of Management and Information Systems, says Kluczny. "This capstone course will provide students a transition experience to the real business world." The course is designed to allow students to make common mistakes " something the faculty is looking forward to " so the students can learn from those mistakes.
By the time the students take this course, usually in their senior year, they should have all of the theoretical knowledge from their foundation courses " in economics, business administration, and information science and technology. This will give them a chance to put the theory into practice.
The course is unique in that the instructor has a very hands-off role. "My job is basically to coordinate," Reddy explains. Each company has monthly meetings with an oversight committee made up of one faculty member from each department in the School of Management and Information Systems and Morris from Phelps County Bank. This group serves as a board of directors, reviewing monthly progress reports and providing feedback to the students.
The 33 students are divided into two companies: Managen Enterprises and Miner Solutions.
Managen Enterprises plans to sell engraved drinking glasses in three sizes: the Mighty Joe, a 20 oz. stein; the Average Joe, a 15 oz. glass; and the Joe Miner, a 10 oz. glass mug. A UMR gear design and an image of UMR school mascot Joe Miner will be engraved on each glass, and each can be personalized for an additional fee.
The group has chosen Prevention Consultants of Missouri to receive any profits from the sale of their Joe Miner glassware.
Miner Solutions plans to sell designer-style sunglasses. The sunglasses are replicas of styles by Adidas, Calvin Klein, and Armani, among others. Miner Solutions has chosen the Phelps County Community Partnership and the Adopt-A-School program to receive their profits.
When the course ends at the end of the semester, rights to the business and it's products will revert to the School of Management and Information Systems, however, Reddy says if any students are interested in continuing one of the businesses, the school will assist them. While the university owns the intellectual property rights, the business could be licensed back to the students.
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