AMES, Iowa – There are some lessons in business that can only come from experience, and others that entrepreneurs wish they would have known before starting their own business. It is the kind of advice that business professionals will share with Iowa State University honors students this fall to help them avoid similar pitfalls.
Shoba Premkumar, a senior lecturer in finance, designed the class to give students an opportunity to learn from those who have successfully started a business as well as network and pitch their ideas for a startup. She wants students to see that Iowa is a good place for new business ventures.
“There is a general perception among students that startups are most successful on the East and West coasts, and they think that Silicon Valley is the place where people ideally start a business,” Premkumar said. “This class will help change that perception and students will realize there are successful companies here in Iowa.”
Giving students the tools to start their own businesses is not only vital to their success, but the creation of new startups is beneficial to the state economy. Nearly 98 percent of Iowa employers are small businesses, which include about 52 percent of the private-sector workforce, according to the Small Business Administration.
Experts in the classroom
Business professionals will share their expertise for developing an idea and business plan, financing and identifying sources of capital for a startup, as well as product development and franchise opportunities. Students will take what they learn and develop their own business concepts throughout the semester to present at the end of the course. Most importantly, Premkumar wants to make sure students know how to access the free resources available to anyone interested in starting a business.
The Small Business Development Center is just one of those resources. The program is supported by ISU’s College of Business and provides free counseling to Iowa businesses with fewer than 500 employees. The Pappajohn Center for Entrepreneurship at Iowa State partners with the SBDC to offer workshops and guidance to small business owners.
“These services are available to help students with their business plan, develop the idea and connect the students with venture capital funds and make sure the idea will be successful. What really amazes me is all these services are free,” Premkumar said.
Mike Upah, regional director for the SBDC, critiqued the students’ business concepts and talked about sources of capital during a recent class. Upah said entrepreneurs need to research their competition and make sure they have a plan to market their product or service.
“Most people underestimate the sales and marketing challenge, so sales come more slowly than they anticipated, and they run real low, or they run out of cash,” Upah said. “Lots of pretty good business ideas have died because the business just couldn’t afford to stay around long enough.”
Matt Rizai, CEO of WebFilings; Dave Tucker, director of product development for WebFilings; Rick Brimeyer, president of consulting firm Brimeyer, LLC; and Eugene Hibbs, owner of Little Caesars in Ames, will also visit the class throughout the eight-week course.
Rick Dark, associate professor and chair of the finance department, said the class is a great opportunity for students to ask questions of business professionals and gain confidence in taking that first step. He said students often seek employment with an established company after graduation because they’re afraid to risk starting their own business.
“There are lots of opportunities for students to create their own business, and the more they know before they get started will only help them to be successful in the future,” Dark said.
Sushi shop to green energy
Only a handful of the students in the class are studying business, and their startup concepts are just as varied as their majors. Sheila Evans is pursuing a degree in aerospace engineering. Her team is pitching plans for a sushi shop aimed at getting more people to try sushi.
Kyle Brown is a landscape architecture major and would one day like to follow in his father’s footsteps and start his own business. Brown and Rebecca Ahlers, an agronomy student, are working on a concept to limit nutrient runoff from farm fields.
“It’s really good to help me see what my dad went through when he started his business, and it helps me to work through those numbers on my own for the first time,” Brown said.
Both speak passionately about their business plan and desire to work with farmers to limit pollution from farm-field runoff. But the class has already opened their eyes to just what it will take to make their dream a reality.
“When we started talking numbers and just looking at start-up costs and how much equipment costs, all of a sudden you realize there are a lot of zeroes behind those numbers,” Ahlers said.
The process can seem overwhelming at times, but that is exactly what Premkumar wants students to take away from the course. Understanding financing and other market factors will help guarantee success if and when students do launch their own business.