You have a pretty good idea for a business. You’ve raised $25,000 from friends and family, and you believe you can make a go of it. Maybe you can even make people’s lives a little better.
What do you do now?
Basic primers on accounting, leadership and finance, among other topics, are supplied throughout the semester. And students use what they have learned in an exercise they will probably repeat when they enter the business world.
“I think it’s like a culmination of the whole class,” Joe Erbe, a freshman from Spring Lake, N.J., said of the business plan exercise. “It is like a final exam.”
“This became an entrepreneurial exercise because the assignment was to create your own business,” said Frank Werner, an associate professor of finance and business economics who helped create the Ground Floor program.
The hypothetical $25,000 in seed money is part of the backstory for the Ground Floor students. Teams of students, picked by Werner with an eye toward diversity of experience and culture, collaborate on choosing a business and developing the plan, within the framework of the class.
Students put together spreadsheets of cash flows – all the money coming in and all the money going out – for the first year. This helps to keep them and their plans grounded.
“They can’t be totally wild and devoid from the financial reality,” Werner said.
At the end of the process, the teams must submit a 20-page paper and prepare a 30-minute presentation. Students must dress in business attire during the presentation and put together a PowerPoint slide deck.
“I tell them, ‘You’re making a pitch to someone. What you’re doing is you’re trying to convince someone that this is a great business,’” Werner said.
Erbe is part of a Rose Hill-based team – along with Haley Hauge of Seattle, Kiki Eleftheriadis of Brooklyn and Nikolas Karsos of Warren, N.J. – that is pitching a company called Jigsaw, which would sell shirts adorned with artwork provided by community centers. A percentage of the profit will go back to the organization that provided it.
Their team is considered a social entrepreneurship effort and is eligible for extra credit because of that. Werner said this is the first year that option is being offered to students. It is part of the Gabelli School’s emphasis on social responsibility in business.
The diversity that Werner seeks in each team was evident in the plan of four Lincoln Center students, whose “Opportunity GMLF” business proposes to sell healthy foods out of trucks and recycle profits to Second Chances, a nonprofit organization.
Rejepmuhammet Gurbannazarov of Turkmenistan, Kaitlyn Frieling of Chicago, Celine Merabet of France and Francesco Lonardo of Italy came up with the idea.
“Every Italian sgonfiotti ripieni, French baguette and croissant and Mediterranean gyro purchased by customers will serve as a SECOND CHANCE for homeless people to return to a traditional lifestyle,” their proposal reads.
Werner does give the students some flexibility. The businesses the students come up with are sometimes too ambitious.
“The goals of this is to get them to think about how you put something like this together, more than ‘is it realistic?’” Werner said. “They’ve got three more years of school to learn realism and to get disappointed with some of their fantasies.”