Learning from Student Businesses

For some undergraduates, the first taste of running a business happens right on campus

by Francesca Di Meglio

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In 2001, MBAs at the University of Maryland's Robert H. Smith School of Business opened up the Smith Store, a shop that sold university paraphernalia, such as logo T-shirts, and bulk orders for special events at the university. The goal was to provide business students with a safe environment for taking risks and experimentation.

Three years later, the school's Dingman Center for Entrepreneurship took over the project and hired two MBA students to manage the store. The MBAs did fine, but the following year the school gave undergraduates a shot at running the show—and the results were surprising.

"The MBAs did well, but undergrads have a lot of fire in the belly," says Melissa Carrier, director of Venture Investments & Social Entrepreneurship at the Dingman Center. The undergraduates doubled the revenue in six months, and now the jobs remain in the hands of undergrads exclusively. A profitable business, the revenue pays the working students, and the rest goes to the Entrepreneurship Club and to scholarships. Plus, Carrier says, students learn three key lessons: leadership, team skills, and customer service.

A Different Sort of Classroom

The Smith Store is one of a number of student-run, on-campus businesses designed to give business majors and other students a hands-on experience. While each may have a unique history, all have a common purpose: teaching young people about how to manage a small company.

Learning comes quickly. John-Paul Kwasie says he was a typical undergraduate student at the University of Massachusetts, Amherst—meaning he used to sleep in and lacked a real direction. Then the communications major signed up to work for Campus Design & Copy, a student-run business that provides photocopies and graphic design work for students and faculty.

Kwasie's college life changed with the new job. "I had structure," says Kwasie, who is co-manager of the business. "All that energy I wasn't using, I put it toward something." A senior who will graduate this December, he dreams of opening his own design or visual arts firm.

Students Only

Whereas some schools take an active role in setting up and running businesses, others are run strictly by the students. At Georgetown University in Washington, the Alumni & Student Federal Credit Union (GUASFCU) operates without any faculty or administrators as supervisors. In 1982 four undergraduates wanted to help students with their banking needs, and by the fall of 1983, the credit union was chartered. In 1994 services were extended to alumni. Now, the 147 credit-union employees come from the university's four schools, but 80% are from the Robert Emmett McDonough School of Business. For B-school undergrads, the best part of the gig is getting exposure to their chosen industries. "[The job] lets me apply everything I've learned in class," says Lorena Ferrara, chief marketing officer of GUASFCU, which has more than 6,000 accounts and over $10 million in assets.

Students at the University of Colorado who had an interest in entrepreneurship sought a loan of about $42,000 from the Leeds School of Business and Deming Center for Entrepreneurship to open a coffee cart. The business was launched in 2005 but closed for a year while the business school building was being renovated. In 2007 the Trep Café—"Trep" being short for entrepreneur—reopened, this time as a full-service café inside the renovated building.