June 28, 2005 - Today's Other News Items

Students Make Mountain Out of Molehill

What happens when you give seven teams of business students $100 each and five weeks to start, run and make money from a small business?

In the case of the University of Oregon Lundquist College of Business, the answer is lots of hard work and a cumulative 523 percent return on the initial investment--a profit margin that would delight even the toughest venture capitalist.

"Research shows that students learn better from experiential learning than from traditional classroom instruction--and these students have learned plenty," said Lynnette Claire of the Department of Management who taught the course. "They've learned that starting a business is hard to do while maintaining other life commitments. They've learned about working as a team. And they've learned about 'the real world' just as most of them are graduating into it."

The student teams launched the "Business Blitz" on April 11 and concluded business operations on May 18. Each Monday afternoon at the start of class, teams were required to report earnings. Even with slow--and sometimes negative--initial earnings, the final five-week cumulative return for all teams was $3,659.28.

Each team created a different business. The Spring Blitz Team provided lawn care and window washing for homeowners and was the most profitable, with net proceeds of $851. Other team businesses included promoting Oregon-inspired T-shirts, selling baked goods and household items, marketing landscape plants, operating a temporary agency, providing consultant services for other businesses and selling items on E-bay.

The goal of the class was to give students real-life experience in the risk of business ownership and investment. Student teams were required to repay the $100 in seed capital from the business college's Lundquist Center for Entrepreneurship and to pay "taxes" as a class.

The tax was 20 percent of net profits and is being donated to charity--in this case, aid to children suffering from the ongoing civil war in Liberia. Tax revenue amounted to $732 and is sufficient to cover the costs of four years of tuition for two children. As the class recognized, this is particularly meaningful in a country where tuition is required even at the elementary education level.

The remaining funds--just under $3,000--were distributed as dividends to team members by venture and amounted to about $125 per student.

For more news on university people, events and programs, you're invited to read the current issue of Inside Oregon, the official e-newsletter for UO faculty, staff and graduate teaching fellows.