By CK Braun-Schultz

It’s 6 p.m., and students in the Entrepreneurship 302 course are in for a surprise.  Their professor, Craig Silvernagel, splits the students into teams of four, and hands each an envelope with $5 inside.  Their assignment: use the money to create a business and turn a profit within three hours, and then return to class.

Beyond the three-hour time limit, Silvernagel sets other rules: no charity, donations, or gambling; there has to be a real value exchanged as part of the business; and, if the student groups are going to sell on campus or anywhere public, they must obtain permission.  The $5, all expenses, and profit must be accounted for, down to the penny. 

Could the entrepreneurship students capitalize on an idea and create a business with only $5?  Could they turn a profit in less than three hours?  They could, and they did. 

Each group approached the venture differently.  While some teams ran out the door to seize every moment, others stayed to develop a plan of attack.  One team ­ consisting of two graphic design majors, a banking and finance major, and a criminal justice major ­ originally had a difficult time coming up with an idea.  With the clock ticking, the team decided to seek out newly opened businesses in the area and sell graphic design services.  They approached Patrick Streyle, owner of the newly opened Pita Pit restaurant in Grand Forks, and negotiated a contract to design the graphics for the Pita Pit delivery vehicle.  In less than 90 minutes, the team had used their money to create a business contract and turn a profit of more than $200.  Within three hours, the team’s total sales reached $778.

Another team, a group of students with a lot of technical expertise, used their money to promote their ability to fix technical computer problems for students.  At the end of the evening, minus their initial expenses, the team’s profit was $155.  Another team sold bottled water at bus stops, for a total profit of $111.  Additional ideas were selling S’more kits and advance sales of T-shirts for a popular UND event.   

When the student teams returned after three hours, Silvernagel calculated profits:  From the initial investment of $20, the student teams made a combined profit of $1,054.  The total earnings were divided among the student teams, with the winning team netting 65 percent of the pool, second place with 25 percent, and third place received 10 percent.

“I don’t want to hear that there aren’t enough resources, opportunity, or capital for entrepreneurs,” Silvernagel told the students at the end of the evening.

Silvernagel conducts this exercise with each entrepreneurship class.  “Explaining these techniques as a lecture would not have given students the hands-on experience or had the huge impact,” he said.  “Using the experimental approach created a fun environment in which the students were challenged, and it created a dynamic, entrepreneurial experience for them.”

This article can also be found at http://www.universityrelations.und.edu/dimensions/February2007/HTML/Business.html.