Student projects aid area small businesses

A semester-long project through UW–Madison’s Small Business Development Center in the School of Business gives small businesses in and around Madison a jump-start on creating business plans while university students receive hands-on training for future jobs.

Students in groups of four or five select a business for which they will create a business development plan. Working with the owner or manager from that business, each student group puts in a total of between 100 and 200 hours during the course of the semester. The students apply principles learned in class to a small business and use practical skills such as creating a financial analysis, as well as answer questions related to budgets, target audiences and executing business plans.

Students participate in this project through a three-credit course at UW–Madison. Small Business Management/Entrepreneurship, offered through the Management and Human Resources Department, meets twice a week and is taught by Assistant Professor of Management and Human Resources Jon Eckhardt. The businesses that participate can range from restaurants to hair salons to high-tech firms.

“They apply a lot of the tools that we’re learning in class,” Eckhardt says. “They of course get to write a business plan, and they learn to work with each other as well as working with people on the outside. They learn to apply a lot of the financial tools that are sort of addressed problems that are unique to running small businesses, such as working capital and cash fall issues.”

The businesses that participate receive a number of benefits from the students involved in the project. The business development plans and the final projects students are required to write serve as a starting point for businesses, which can tailor the plan to suit their specific needs. Businesses save the time of doing the initial legwork.

In addition, students sometimes provide unique viewpoints without the biases employees close to the business can develop. The student may look at certain situations differently and find different opportunities the company had not considered or taken advantage of. The disadvantage, however, is that the students do not have the experience of the managers in that industry and are not as knowledgeable about the business.

Matt Stamerjohn, a December 2003 graduate of the School of Business, participated in the project in spring 2003 and helped to design a business plan for a bicycle shop.

“I think a lot of times you start thinking about, ‘What would you do?, What would I do?’ and this and that,” Stamerjohn says. “It’s great to have somebody else step in and be like, ‘You know what? Here’s something you can do,’ and all of a sudden, you’re just like, ‘Whoa, I never saw it from that point of view.'”

The success of the student-created business plan depends on the business and the relationship it has with its group. If an owner works with the group throughout the semester instead of meeting with it once and handing it a pile of numbers, the group is more likely to assemble a comprehensive plan that the business can use down the road, according to Eckhardt. Businesses do use some of the plans students compile, as in the case of a catering company.

“I think a plan was done for them almost 10 years ago now and they’re still using some of the analysis tools that were developed when the plan was written for running the business today,” Eckhardt says.

Not all businesses are a good match for this project, says Small Business Development Center Director Neil Lerner. Some businesses may not need a new business plan or may not fit the criteria. Businesses must be at least two years old, must have more than five full-time employees or the equivalent of five full-time employees, and be willing to provide financial records.

“This is a voluntary program where businesses are told about the opportunity and they sign up for it. From the information presented to them, they feel like this is a good opportunity. But other businesses may not feel like that is what they need right now,” Lerner says. “Every circumstance is different based on what the business is trying to accomplish at that particular time and the processes they are using to try and grow the business.”