STTC4 TEGY NOTEWORTHY NEWS Prashanth Nagendra, Stephen Osborne &r Joette Wisnieski Indiana University of Pennsylvania Newbridge Capital, a San Francisco investment firm was interested in forming a joint venture with North Dragon Iron and Steel Works —the only problem was that North Dragon had 12 subsidiaries with outdated accountingpractices. Sounds like a problem fora consulting firm but that's not what this company chose to do. Instead they hired a group of MBA students from the Walter A. Haas School of Business at the University of California, Berkeley. The result was a 90-page report which broke down production costs for each subsidiary alerting the firm about some potential problems. This was just one of the many stories featured in a recent article in Forbes entitled, "McKinsey 101"about the active role business schools have taken to provide their students with real-life business consultancy experiences. Many business schools are recognizing the value that a hands-on experience can add to an MBA program and its importance in attracting the best students to their institutions. One school taking the lead in this area is the University of Pennsylvania. During this year, Wharton will have 144 teams of students in the field with clients as diverse as General Instrument to Britain's Imperial Chemical Industries. And, according to past B-school clients, there are few differences between professional consultants and the student consultants. Student consultants are tackling a wide range of projects from researching joint ventures to international marketing plans to new product development and are achieving satisfactory results at much less cost. B-schools currently charge anywhere from "expenses only" to up to $25,000 (Haynes &. Setton, 1998). While "business school students consulting for real businesses" may have been newsworthy to Forbes and its readership, this is pretty common stulT for most Small Business Institute Directors. The Forbes article suggests that over 700 business schools are jumping on the bandwagon by providing real-life consultancy experiences for their MBA students, something SBI directors initiated over 20 years ago. However, business school consultancy is not limited to large clients. Since 1972, the SBI program has helped over 150,000 with business planning, growth issues, cash flow management, strategic issues including advice on how to market internationally and many other projects One such example is Kane Manufacturing's story featured in an fnc. article. Donna Kane believed there was a market for her livestock products in Europe and a 5-member student team from 64 Journal ofSmall Business Strategy Volume 9, //o. l Spring /998 Drake University operating under the SBI program provided a report that outlined the obstacles Kane Manufacturing would face in this new market (Greco. 1993). The need for small business consultants is very real. While on the surface a mom-and-pop grocery store may not seem to have much in common with a small manufacturing firm, many small businesses have very similar needs. With few employees, owner/managers have no one to bounce ideas off or assign projects. Also, small businesses can't justify hiring many permanent employees (Rosso, 1993). Student consultants can provide these services by working on projects covering a variety of business areas. And how do business students measure up to professional consultants? According to the articles in Forbes and /nc., student consultants are able to get the job done. Students bring a lot to the table. Student consultants have access to business faculty in a number of fields, not just business, to assist with the project. Professional consultants often have a favored bag of tricks to bring to the client whereas students have fewer preconceived notions of what will work best. Also, students are interested in finishing the project within a semester and not expanding it beyond the original specifications. Employees otten tend to be more open with students than professional consultants. Students are oRen much better at dredging information from the Internet. Finally, there is no doubt that the low price tag appeals to clients, especially small business clients who cannot afford huge consulting bills (Greco, 1993; Haynes 4 Setton, 1998). As for Kane Manufacturing, its exports were grown to 33'/B of sales and it commissioned a second SBI study looking at Brazil as a possible site (Greco, 1993). The consultant business is booming. Total industry revenues for business consulting grew by 17'/B to about $73 billion in 1997, according to the Kennedy Research Group. With positive results for both students and businesses, business school consulting and the SBI will continue to provide a valuable service to the American economy. REFERENCES Greco, S. (1993).First-class export help. Inc. 15 (10), p. 30. Haynes, P. /k Setton, D. (1998).McKinsey 101. Forbes May 4, p. 130-135. R .C l)993) C I RC III I ' IIB I .0 I 9 61 lg) 9.)6. 65 Proud to Honor Outstanding Achievement! John Kerr Lynn Hoffman Florida State University University of Northern 1997 Fellow Colorado 1997 Fellow Lowell Salter Leo Simpson Harriet University of East Washington Stephenson North Florida University Seattle University 1997 Mentor 1997 Mentor 1997 Mentor Award Award Award We'e singing the praises of five Over the life of their careers, these individuals who have made on-going new Fellow inductees have made contributions to the field of small significant contributions to our business and entrepreneurship and to the understanding of small business. continued development of the Small Business Institute™Program. Lowell Salter, Leo Simpson, and Harriet Stephenson were recognized as John Kerr, and Lynn Hoffman were 1997 Mentors for their outstanding inducted into the exclusive ranks of guidance to other SBI programs and SBIDA Fellows during the 1998 SBIDA directors. Conference in Santa Fe, New Mexico. No more than two individuals may be All five deserve our thanks and inducted in any one year. admiration. I ~ Small Business Institute 1998 Fellows and Mentor Awards Directors'ssociation Wouldn't you and SBIDA be a perfect professional fit? YES ...ifyou have a strong interest in the growth and prosperity of small. entrepreneurial, and family-owned businesses. YES ...ifyou believe that collegiate business management education is strengthened by experiential learning opportunities. YES ...ifyour academic program, Small Business Institute, SBDC, or management assistance center strives to give small business and entrepreneurship issues equal exposure to those of large business. YES ...ifyou have a strong interest in small business consulting and/or small business case writing. Our publications and regional and national conferences explore issues, trends, and managerial training for small, entrepreneurial, and family-owned businesses. Student development is encouraged and supported through our Small Business institute 'rogram, the preeminent small business iield case consulting program in the United States. For Membership Information contact: Ronald Cook SHIDA VP-Marketing & Membership Rider University 2083 Lawrenceville Rd. Lawrenceville. NJ 08648 Voice: (609) 895-SS22: Fax: (609) 896-S304 E-mail: Cookr CoI rider.edu 1998 Dues: US, $ 100.00:International. $ 125.00 Small Business Institute 199$ Membership Directors'ssociation