More Arkansas Students Study Entrepreneurship

While taking graduate business courses at the University of Arkansas, Misty Stevens decided to start a company.

In January, the 32-year-old Little Rock woman and three of her classmates formed BiologicsMD to develop osteoporosis medication.

Stevens and her classmates already have won two national business plan competitions and are now trying to secure the $5.3 million in startup costs.

“There’s still a lot of development that’s left to go,” Stevens said.

But with her entrepreneurship training, she hopes her company can tap the approximately $9 billion global market for osteoporosis medication.

Stevens is part of a growing trend reported by business professors nationwide and in Arkansas: students taking entrepreneurship classes.

“I don’t know if it’s because of the recession,” said Carol Reeves, associate professor of management at the UA’s Sam M. Walton College of Business. “Across the country it has been the fastest-growing major … in the universities.”

At Harding University at Searcy, enrollment in entrepreneurship classes has doubled in the last five years, said Allen Frazier, chair of the management department at the school.

“Students are recognizing the fact that there’s a lot of opportunity that’s out there,” he said.

The entrepreneurship programs teach students everything from how to write a business plan to management, accounting and marketing.

While entrepreneurship classes won’t turn just any undergrad into the next Bill Gates, they can decrease the chance that a new business will fail, said Jerome Katz, who holds the Coleman chair in entrepreneurship at the University of St. Louis.

About 60 percent of start-up businesses will close after four years, he said. But by taking entrepreneurship classes and receiving other outside help from resources such as business incubators, Katz said, entrepreneurs can increase their chances of survival after six years to between 85 and 90 percent.

Of course, there are anecdotal stories of college dropouts who went on to form successful businesses – Gates being one of them.

“There are always these people who are just gifted, natural entrepreneurs, but that’s true in every area,” Katz said. “The advantage of an entrepreneurship education is that it makes [starting a business] accessible and workable for the average person.”

Others outside of business schools also believe the entrepreneurship skills can be taught.

“It’s like a discipline,” said Kerri Daniels, executive director of the Arkansas Economic Acceleration Foundation, which is part of the Arkansas Capital Corp. Group of Little Rock.

The AEAF holds the annual Donald W. Reynolds Governor’s Cup business plan competition, where the first-place prize is $20,000. (This year’s awards were announced at a luncheon on April 19.)

Even if the entrepreneurship classes don’t turn a student into a business mogul, the experience will be valuable.

“Those are the people that all companies want because they don’t want employees sitting on their hands until their boss says, ‘You must do this,'” Katz said. “Employers want employees who are noticing what’s going on and who are attuned to the marketplace.

“If you are talking to the HR managers, they want people with a little bit of entrepreneurship in them,” he said.

 

More Students

In 2000, Reeves said she had two students in her entrepreneurial graduate program at the UA. Now she has 30 students, which is the limit.

She said people have always been attracted to starting a business.

“It’s the American dream,” she said.

With an unemployment rate that has hovered around 10 percent nationwide, investment banks and Wall Street firms aren’t hiring as many business school graduates as they once did. So students have decided to start their own companies, Reeves said.

In the MBA entrepreneurship classes at the UA, students analyze the growth and profit potential of a new business by “examining intellectual property, the competition, and the allocation of human and financial resources,” according to the course material provided by the school.

“Students complete the track with a viable business plan in hand, for which they seek funding through state, regional and national business plan competitions,” the material reads.

Katz, with St. Louis University, said there are two kinds of entrepreneurs: those who start businesses out of financial necessity and those who are driving to exploit a perceived void in the marketplace.

Katz said some of the most popular new businesses are those in the service industry or those companies that can be launched on the Internet because of the low startup costs.

“The Web has made it possible to start global businesses literally on a shoestring budget,” he said.

The key to launching a business is finding an attractive market in which a small operation can compete, Reeves said.

“And for our students, it can’t require too much capital or else they just aren’t going to be able to do it,” she said. “And it’s hard to find those.”

Entrepreneurship programs also teach students how to sidestep the common pitfalls of opening a business.

“I think a lot of people have a rose-colored-glasses view of entrepreneurship,” Reeves said. “It’s just an incredible amount of work.”

Joe Bell, an associate professor of entrepreneurship at the University of Arkansas at Little Rock, said he has a steady stream of business owners come in to tell students of the “trials and tribulations” involved in creating their businesses.

“A true entrepreneur tends to always view the glass as half-full rather than half-empty,” Bell said.

The entrepreneurship classes also might steer students away from opening their own business, which would save the owner potentially thousands of dollars by avoiding a business dud.

“If a 20-year-old finds out that he is not cut out to run his own business,” Katz said, “that is valuable career information.”