The effects of experiential learning and entrepreneurship research paper

Running Head: EXPERIENTIAL LEARNING AND ENTREPRENEURSHIP 1

Experiential Learning and the Implications on Entrepreneurship at Bishops University

Matthew Jones and Alexis Stogowski

Bishops University: Williams School of Business

EXPERIENTIAL LEARNING AND ENTREPRENEURSHIP 2

Abstract

This paper reviews the current status of Experiential Learning [henceforth EL] in the

entrepreneurship program at Bishops University’s Williams School of Business [henceforth

WSB]. The paper reviews current works by authors such as Kolb, Lewis & Williams,

Chapman & colleagues, and relates their work to entrepreneurial studies. The author also

studies the effects of EL on entrepreneurial students at WSB through the analysis of data

acquired from surveying various entrepreneurial students. Additionally, this paper provides

a first person perspective of the entrepreneurship program at WSB. This paper is designed

to be used as a professional tool to assist teachers in integrating EL activities into

entrepreneurial curriculum.

Keywords: experiential learning, millennial, student, teaching, learning theory,

lateral thinking, linear thinking


Experiential Learning and the Implications on Entrepreneurship at Bishops

University

EL is an important and well-researched subject intended to immerse the learners

in an experience and encourage reflection in order to develop new skills and attitudes

(Lewis & Williams, 1994). While it is difficult to develop a concrete definition because

of the open-endedness and non-linear nature of EL (Chapman, McPhee, & Proudman,

1995), it is a relatively simplistic theory when observed through the theories of Kolb

(1984). Theories pertaining to EL are important when it comes to teaching millennial

students because they tend to prefer EL techniques as a learning tool (Hawtrey, 2007).

EL theories are especially important when it comes to teaching entrepreneurial students

as entrepreneurs tend to be lateral thinkers (McGuinness, n.d.) and classical teaching

practices trend towards linear thinking.

EL teaching practices have been successfully integrated into the WSB

entrepreneurial curriculum. The utilization of EL encourages creative thinking, a vital

component for future entrepreneurs. The entrepreneurial program combines classical

teaching practices such as lectures with field and classroom based EL activities to

broaden the student’s knowledge of the topic, and assist the student in finding future

entrepreneurial success. This was found through evaluating the applicable knowledge

transferred from guest speakers to students as well as reviewing past experiences of

entrepreneurial students at WSB.

The purpose of this research is to broaden students and instructors understanding

of EL teaching methods and the ways in which they have been successfully applied in the

entrepreneurial program at WSB. The research also aims to expand prospective students


awareness of the entrepreneurship program, and the benefits provided by studying at

WSB over other institutions.

Literature Review

Experiential Learning

In the words of Lewis and Williams (1994) “experiential learning means learning

from experience or learning by doing. Experiential education first immerses learners in

an experience and then encourages reflection about the experience to develop new skills,

new attitudes, or new ways of thinking.” However, due to the open-ended nature and

nonlinear concept of EL it is hard to create a concrete definition (Chapman, McPhee &

Proudman, 1995). As such it is crucial to review the various aspects of EL.

In experiential education, David Kolb’s work is omnipresent with more than

28,000 citations (as measured with a Google search on March 10, 2015). In Kolb’s EL

theory [KELT] (1984), Kolb argued that learning is “the process by which knowledge is

created through the transformation of experience, [and] knowledge results from the

combination of grasping and transforming experience.” “As such, ELT is applicable not

only in the formal education classroom but in all arenas of life” (Kolb, 2008) meaning

that one never stops the EL process as they progress. This relates to all aspects of society

from businesses to individuals (Kolb, 2008). Kolb (1974) devised a theory based upon a

four-stage learning cycle [Appendix B] where the learner touches all the bases. The four

stages of KELT are Concrete Experience [CE], Reflective Observation [RO], Abstract

Conceptualization [AC], and Active Experimentation [AE]. The CE stage of KELT is

where the learner is subjected so a new experience of situation or a reinterpretation of an

existing circumstance (McLeod, 2010). The RO stage is when the learner finds


inconsistencies between the experience and current understanding (McLeod, 2010). In the

AC stage the learner applies the reflection, which gives rise to a new idea or leads to a

modification of an existing abstract concept (McLeod, 2010). During the AE stage, the

learner applies the new theories to the world around them (McLeod, 2010). The circular

nature of KELT is important as individuals never stop learning, and continue to reflect,

modify and apply previous experiences to current problems. Kolb (1974) believes that

each stage of the learning cycle is mutually supportive of the next; however, effective

learning occurs only when the learner is able to complete all four stages of the cycle

(McLeod, 1974)

According to Schwartz (2015), EL can be divided into two categories: field based

experiences, and classroom based learning. Field based learning was first integrated into

higher education in the 1930’s (Schwartz, 2015). Field based learning is when the student

is subjected to external learning opportunities such as internships, cooperative education

programs, practicum’s, and service learning (Lewis & Williams, 1994). Classroom based

EL can take many forms including case studies and role-playing exercises, simulations,

presentations and various types of group work (Schwartz, 2015). Classroom EL

exercises have been growing since “Chickering and Gamson recommended ‘active

learning’ as one of the seven ‘principles of good practice’ for excellence in undergraduate

education” in 1987 (Lewis & Williams, 1994). As EL differs from conventional

education, the student teacher relationship changes with the student taking on more

responsibility. The curriculum itself may not be clearly defined requiring the student to

identify applicable knowledge and progress through the KELT four-stage cycle (Moon,


2004). Chapman and colleagues created a list of characteristics that should be present for

EL to occur [Appendix C]

Teaching Millennials

Millennials are the largest and most diverse generation to ever attend university

(Strauss & Howe, 1993) and are unlike their predecessors who attended college 20 years

ago (Monaco & Martin, 2007). Millennials are characterized by their collective

personality, thought processes and educational tendencies that are unique to the

traditional classroom practices in the educational environment (Monaco & Martin, 2007).

According to Howe and Strauss (1993), Millenials have seven general characteristics.

These characteristics read as follows: Millennials like to feel special. Millennials are

sheltered. Millennials are team oriented. Millennials are confident, Millennials have a

strong desire to achieve, and Millennials are cultured (Howe & Strauss, 2003). As such it

is important to pursue new teaching methods in order to appeal to this new generation of

learners.

According to Sweeny (2006) and Nicoletti and Merriman, (2007) “lecturing is the

least effective teaching strategy to use to create a positive learning environment for the

Millennial student” (Brown, Hansen-Brown & Conte, 2011). Millennials prefer to learn

through EL activities such as group work and simulations rather than teacher centered

approaches that most faculties prefer (Pardue & Morgan, 2008). A study conducted by

Hawtrey (2007) agreed with this when she found that students ranked experiential

learning techniques as their most preferred learning tool. This clearly demonstrates that

the EL is one of the most applicable teaching techniques that assist Millennials in

retaining information.


EL at Williams School of Business Entrepreneurship

Experiential learning is a primary component of Bishops University’s Williams

School of Business entrepreneurship program. The program begins with BMG214

Introduction To Entrepreneurship: New Venture Creation, followed by BMG318 The

Successful New Venture: Feasibility Analysis and the Management of Risk, and BMG320

Topics in Entrepreneurship.

BMG214 is designed to assist students in thinking entrepreneurially. As such it

aims to teach students how to pursue goals and opportunities by ‘creating something new

from little.’ This course combines traditional teaching practices with EL theories.

According to professor Albert James (2014) syllabus [Appendix D], 20% of the course is

made up of case studies, 55% by a large-scale business proposal, and 20% classroom

participation. With this grading scheme James (2014) was able to provide a safe

environment for students to learn the applicable theory, and created a long term project

that was applicable to EL as it followed Chapman & colleagues (1995) theories of EL.

BMG 318 builds on the foundation of entrepreneurial thinking developed in

BMG214. Students are divided into teams and paired up with local entrepreneurs. This

creates a unique course dynamic as students play a consultant role to the entrepreneur. As

such the students are faced with the real issues facing local firms, and have to apply

knowledge gained throughout their academic career in order to streamline the business.

Utilizing specific deadlines for various aspects of the assignment, students are

required to reflect and apply the knowledge and insights gained from the reflection to

further better the company. This continues the development EL and the student’s

entrepreneurial thinking as the margin of safety is significantly reduced from BMG214.


This creates unique problems that would not be present in a classroom based EL activity

because there are many external factors at play that are impossible to replicate outside of

a field based activity.

Students Perception of Entrepreneurship at WSB

I began studying at Bishops University in the fall of 2011, and it wasn’t until

my third year that I began to pursue the entrepreneurship concentration of WSB.

The first entrepreneurship class I took was BMG 214 in which fellow classmates and

I had to create a business proposal. For this project we decided to create a proposal

for a localized cross border shipping service [Appendix E] for Bishops students in

order to capitalize on the high Canadian dollar and cost effective shipping within the

continental United States. Throughout the course we had classroom based EL

activities that prepared us to develop a professional business plan. By using EL we

were faced with more challenges than a traditional lecture based course.

The first problem we encountered was the group dynamic, and how to deal

with social loafers; a common problem in real world teams. Secondly, we had to

invest ourselves emotionally in the “company” as we had to sell ourselves to fellow

classmates in the Bishops version of the hit T.V show Dragons Den. We capitalized

on each members experience and education in order to devise a strong marketing

plan, financial proposition, and value offering. As such we each took away valuable

experiences for what is required behind the scenes when starting your own

business.

After BMG214 I followed the logical course progression into BMG318

[Appendix D] where we were required to play a consultant role to a local


entrepreneur. This consulting opportunity provided us with real world experience

and further developed the skills initially learned in BMG214. Instead of working in a

controlled environment we were faced with the real world challenges that

entrepreneurs undergo daily. The course was designed with specific reflection

points where the teams presented the information collected, and their suggestions

to be critiqued by classmates. This allowed us to make improvements and to

capitalize on the knowledge and perspective of other entrepreneurial students.

For this project my team and I worked with a local firm in a highly

competitive industry; as such we were faced with unique challenges. The

entrepreneur had a specific direction he wanted his firm to go, and our team

disagreed. However, we decided it would be better to present the information

required to come up with the same conclusion to the entrepreneur rather than

create a potentially volatile situation due to the emotional disconnect. We decided it

was more important to create relevant and obtainable goals based upon an analysis

of both local and national competitors.

This course was very beneficial to me both as a student and as an individual.

We learned about the business from someone with first hand experience, and had

the opportunity to learn about the struggles and successes of small business.

Professor Karpenko played a mentor role to us, and encouraged creative thinking

while applying theories learned in the class. By having the project span the whole

semester, we were able to form a relationship with the firm, and become

emotionally attached to the success of the company. Professor Karpenko’s use of


deadlines created a sense of urgency with my team and it resulted in more time to

reflect, and adapt our suggestions.

On an individual level, this course prepared me for the challenges involved

with consulting. I initially thought it would be a simple task of going into the

business; observing and analyzing the various activities in order to create a new

strategy. After working with the firm, I learned that shifting the culture, and making

changes is no simple feet as there are many facets involved. This taught me that it is

important to choose your battles wisely when it comes to consulting. While a

fundamental shift may have benefited the firm, my team and I felt it would be better

to address many minor issues instead of tackling the greater issue as a whole.

This course was extremely interesting, as our work was valued and did not

end simply at the end of the semester. When the project culminated, all of my team

members were offered jobs within the firm. Additionally, after a recent follow up

with the firm, it was nice to find that they were implementing our strategies and

gaining ground with them. This prepared us for real world situations that cannot be

recreated in a traditional leaning environment.

The WSB Entrepreneurship program is an excellent experience. Students are

subjected to many EL activities, and lateral thinking is highly encouraged. The use of

EL prepares students for real world scenarios. Classes provide students with a safe

place to discuss ideas, and create emotional investment as the class material can be

directly applied to student’s own entrepreneurial ambitions. The encouragement of

lateral thinking fuels the natural entrepreneurial spirit instead of stifling creativity


through linear tasks. As a whole the WSB entrepreneurship program is what the

student makes of it.

Method

Participants

There are two primary groups of participants involved in this study. The first

group consists of students enrolled in BMG214 for the Winter 2015 semester. The second

group of participants is restricted to an individual who has completed the entrepreneurial

program at WSB and their perception of the entrepreneurial program as a whole.

Research Design

The first participants were subjected to a short survey [Appendix A] distributed

immediately after multiple guest lectures. The survey aimed to determine the interest

levels of the students, and whether or not they found the information provided relevant to

their studies.

The second aspect of the research was designed to gain a past student’s

perspectives and insights regarding the WSB entrepreneurship program as a whole.

Procedure

The data was collected immediately after a guest lecturer presented. Participants

were subjected to an 11-question survey [Appendix A], which combined quantitative and

qualitative measures. Informed consent was gained through the approval of the course

instructor, and all participants remained anonymous. Validity was derived from multiple

questions such as asking if the participant would voluntarily see the speaker at an

inconvenient time if participation marks were not awarded. Additionally, participants


were subjected to multiple questions applicable to the same topic. Survey’s that had

contradicting responses were discarded.

Results

After analyzing the collected data in Microsoft Excel the authors found that there

was not a statistically significant correlation between the interest level of the student and

the applicability of information presented in the lecture. The guest lecturer did not

provide a direct EL experience for the participants; however, they gave students greater

insights into the world of entrepreneurship. This leaves students with the tasks of

applying the knowledge and insights provided by the guest lecturers in future

applications.

The general consensus of the research conducted was that the guest lectures were

beneficial to the students overall understanding of entrepreneurship. The lectures

provided first person experience in the world of entrepreneurship and the struggles

entrepreneurs have to overcome in order to become successful.

Summary

Experiential learning is a theory pertaining to ‘learning by doing’, and research

shows that it is the most preferred way of learning by millennials (Hawtrey, 2007). EL

teaching approaches typically take one of two forms: field based and classroom based

(Schwartz, 2015). Instructors in the entrepreneurship program at WSB tend to utilize a

blend of the two approaches creating a greater benefit for the students. The

entrepreneurship program begins in a safe environment where repercussions are

negligible. As the students develop throughout the program the assignments become

risky, as students partner up with real businesses in a consultant role. This exposes


students to real world situations and allows students to see the challenges presented by

being a small business owner that may be unobservable in a classroom-based activity.

The program also encourages lateral thinking that is a key component for entrepreneurs.

Additionally, course instructors bring in outside entrepreneurs to speak with students

providing first person insights into the world of entrepreneurship.


References:

Arpiainen, R., Lackéus, M., Täks, M., & Tynjälä, P. (2013). THE SOURCES AND

DYNAMICS OF EMOTIONS IN ENTREPRENEURSHIP EDUCATION

LEARNING PROCESS. TRAMES: A Journal Of The Humanities & Social

Sciences, 17(4), 331-346

Brown, C. J., Hansen-Brown, L. J., & Conte, R. (2011). ENGAGING MILLENNIAL

COLLEGE-AGE SCIENCE AND ENGINEERING STUDENTS THROUGH

EXPERIENTIAL LEARNING COMMUNITIES. Journal Of Applied Global

Research, 4(10), 41-58.

Chapman, S., McPhee, P., & Proudman, B. (1995). What is Experiential Education?. In

Warren, K. (Ed.), The Theory of Experiential Education (pp. 235-248). Dubuque:

Kendall/Hunt Publishing Company.

Dewey, J. (1897). My pedagogic creed. The school journal. LIV(3):77-80.

Hawtrey, Kim. (Spring, 2007) Using Experiential Learning Techniques. Journal of

Economic Education, 143-151.

Howe, N., Strauss W. Millennials Rising: The Next Greatest Generation. New York:

Vintage Books, 1993.

Howe, N., Strauss W. Millennials Go to College. Great Falls, VA: American Association

of Collegiate Registrars and Life Course Associates, 2003; 70-84.

Kolb, D. A., & Fry, R. E. (1974). Toward an applied theory of experiential learning. MIT

Alfred P. Sloan School of Management.

Kolb, D. A. (1984). Experiential learning: Experience as the source of learning and

development. Englewood Cliffs, NJ: Prentice Hall.


Lewis, L.H. & Williams, C.J. (1994). In Jackson, L. & Caffarella, R.S. (Eds.).

Experiential Learning: A New Approach (pp. 5-16). San Francisco: Jossey-Bass.

McLeod, S. A. (2010). Kolb - Learning Styles. Retrieved from

http://www.simplypsychology.org/learning-kolb.html

McGuinness, M. (n.d.). The 3 Critical Characteristics of the Creative Entrepreneur.

Retrieved March 15, 2015, from http://lateralaction.com/articles/creative-

entrepreneur/

Pardue, K.T. & Morgan, P., (2008). Millennials considered: A new generation, new

approaches, and implications for nursing education. Nursing Education

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Schenck, J., & Cruickshank, J. (2015). Evolving Kolb: Experiential Education in the Age

of Neuroscience. Journal Of Experiential Education, 38(1), 73-95.

Schwartz, M. (2013, March 1). Best Practices in Experiential Learning. Retrieved March

8, 2015, from

http://www.ryerson.ca/content/dam/lt/resources/handouts/ExperientialLearningRe

port.pdf

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York: Marrow, 1991.

Vincenti, G. (2011). Teaching through multi-user virtual environments applying dynamic

elements to the modern classroom. Hershey, PA: Information Science Reference


Appendix A

BMG 214: Experiential Learning Survey Speaker:

Instructions: Please complete the following survey using a 0-10 ranking system where: 0: Not Applicable, 1: Low, 5: Indifferent, 10: High

1. What is your current interest level in entrepreneurship? ______

2. Was the topic enjoyable? ______

3. How interesting was the topic? _______

4. Do you think you can apply what you learned from today’s speaker? _______

5. How focused were you during the speech? ______

6. What were your 3 favorite points?

a. __________________________________

b. _________________________________

c. __________________________________

7. What is the likelihood for you to voluntarily see the speaker again if s/he

came back at 9:00am on a Friday? _______

8. Who would you recommend see the speaker if given the opportunity? (Circle all that apply)

a. No one

b. Friends at Bishops University

c. Friends not at Bishops University

d. Family

e. Co-Workers

f.

9. Has your perception of entrepreneurship been changed? ______

10. Would you contact the speaker in the future? ______

11. Was this inspiring? _______


Appendix B

Kolb’s Experiential Learning Theory


Appendix: C

Characteristics of Experiential Learning (Chapman, McPhee & Proudman, 1995)

1. Mixture of content and process: There must be a balance between the experiential

activities and the underlying content or theory.

2. Absence of excessive judgment: The instructor must create a safe space for

students to work through their own process of self-discovery.

3. Engagement in purposeful endeavors: In experiential learning, the learner is the

self-teacher; therefore there must be “meaning for the student in the learning.”

The learning activities must be personally relevant to the student.

4. Encouraging the big picture perspective: Experiential activities must allow the

students to make connections between the learning they are doing and the world.

Activities should build in students the ability see relationships in complex systems

and find a way to work within them.

5. The role of reflection: Students should be able to reflect on their own learning,

bringing “the theory to life” and gaining insight into themselves and their

interactions with the world.

6. Creating emotional investment: Students must be fully immersed in the

experience, not merely doing what they feel is required of them. The “process

needs to engage the learner to a point where what is being learned and experience

strikes a critical, central chord within the learner.”

7. The re-examination of values: By working within a space that has been made safe

for self-exploration, students can begin to analyze and even alter their own values.

8. The presence of meaningful relationships: One part of getting students to see their

learning in the context of the whole world is to start by showing the relationships

between “learner to self, learner to teacher, and learner to learning environment.”

9. Learning outside one’s perceived comfort zones: “Learning is enhanced when

students are given the opportunity to operate outside of their own perceived

comfort zones.” This doesn’t refer just to physical environment, but also to the

social environment. This could include, for instance, “being accountable for one’s

actions and owning the consequences”


Appendix D

Course: BMG214-01 Introduction to Entrepreneurship & Entrepreneurial Thinking Professor: Albert James Office: H-215 (extension 2191) Email: [email protected] Office hours: Tuesdays 10-12 or by appointment COURSE DESCRIPTION: An introduction to thinking entrepreneurially, thinking how to pursue your goals and opportunities by “creating something new from little”. The course is designed to help students pursue their goals through entrepreneurship. Topics include opportunity identification, financing your goal, and venture generation. COURSE OBJECTIVES: To learn the ‘entrepreneurial method’ so as to be able to apply it to meet economic, social and cultural needs. TEXTBOOK: Read, Sarasvathy, Dew, Wiltbank, & Ohlsson (2011). Effectual Entrepreneurship. Routledge.

GRADING SCHEME: Case Studies (20%): (pick any 4)

#1 U-Haul Due Jan 27 #2 PupCups Due Feb 12 #3New Barn Studio Due Feb 19 #4 ICE Hotel Due Mar 12 #5 Lumni Due Mar 17

Rocket Pitch (5%) Due Mar 16 Business Proposal (55%) 2 Page summary of your team’s idea (5%) Due Feb 5 Business Plan Presentation (10%) Last week of classes

Final Business Plan (40%) Due Apr 9 Participation (20%) ASSIGNMENT DESCRIPTIONS Case Studies:


Your teams will work collaboratively on answering the case questions. Assignments are due at the start of class. Pick four cases from the five cases. Each case assignment is worth 10% of your final grade. Rocket Pitch:

Teams will be asked to present a 5 minute presentation on a blue sky solution to a problem assigned by the instructor. Business Proposal: 2 Page Summary: (5%) Your team’s idea: in a page tell me what your idea is, who your customer is, why the idea will be attractive, what need you will fill, and how you propose to “make it happen” Business Plan Presentation: (10%) During the last week of classes each group will present their business plan to the class. Presentation Grading Scheme Set: effectiveness at establishing interest, rapport, credibility, and overview of prez content 2 Support: extent to which the substance of the prez. came across as concrete, complete, relevant, and sound

2

Sequence: degree to which the ordering of the material followed a clear and logical progression

2

Access: effectiveness at making information visually and psychologically vivid to audience members

2

Polish: degree of attention to details 2

Final Proposal: (40%) complete a business plan developed by your team - maximum of 24 pages (12 point font double spaced lines and excluding appendices).

Final Proposal Grading Scheme Feasibility of the project: clarity of description, maintained theme, and did you convince me 10 Use of Means 10 Projected Outcomes: (Financial Picture) Realistic, rationally explained, well detailed

10

Structure & Grammar 5 Style & Creativity 5 GRADING AND DISCIPLINARY POLICIES Late Assignments Please note that late assignments will not be accepted except under extenuating circumstances. Arrangements should be made with me in advance. I typically deduct 10% for assignments submitted the class after the one in which they are due, and 20% for assignments submitted within one week of the due date Maximum penalty of 30%). I will not accept assignments beyond one week of the due date unless official documentation is provided to support the claim of extenuating circumstances. Academic Dishonestly

Bishop’s University is committed to the highest standards of academic integrity and honesty. Students are


expected to be familiar with these standards regarding academic honesty and to uphold the policies of the University in this respect. Students are particularly urged to familiarize themselves with the provisions of the Code of Student Behaviour (http://www.ubishops.ca/fileadmin/bishops_documents/admin_governance/u_policies/Code%20of%20Student%20Conduct.pdf)

and avoid any behaviour that could potentially result in suspicions of cheating, plagiarism, misrepresentation of facts and/or participation in an offence. Academic dishonesty is a serious offence and can result in suspension or expulsion from the University. I will immediately forward any suspicious cases to the dean of the dean’s office.

SCHEDULE

Week Session Topic Assignment Date

No classes Jan 13 & 15

1 1 Myth of entrepreneurs

Jan 20

2 2 I don’t have a great idea Creativity Exercise

Jan 22

2 3 Myth: entrepreneurs are risk takers

U haul case Jan 27

3 I don’t have enough money 1st guest speaker

Jan 29

3 4 Myth: entrepreneurs are extraordinary forecasters

Feb 3

3 5 I don’t know how to take the plunge

2 Page summary due

Feb 5

4 6 Myth: Entrepreneurs are not like the rest of us & Afraid of Failing

Feb 10

4 7 Bird in Hand Principle

PupCups Case Feb 12

5 8 Affordable Loss Principle: Risk a little, fail cheap

Feb 17

5 9 Worldmaking: Understand transformation

Lumni Case Feb 19

6 10 Feb 24

http://www.ubishops.ca/fileadmin/bishops_documents/admin_governance/u_policies/Code%20of%20Student%20Conduct.pdf

http://www.ubishops.ca/fileadmin/bishops_documents/admin_governance/u_policies/Code%20of%20Student%20Conduct.pdf


6 11 Financing: Bootstrap the venture 2nd guest speaker

Feb 26

Reading Week Mar 3-7

7 12 Crazy Quilt Principle: Form partnerships 3rd guest speaker

Mar 10

7 13 Ownership & Control: Manage investors

New Barn Case Mar 12

8 14 The Lemonade Principle: Leverage surprise

ICE Hotel Case Mar 17

8 15 Business Plans and Business Models: Make Pitches 4rd guest speaker

Rocket Pitch Mar 19

9 16 Venture Identity: Build brand

Mar 24

9 17 Pilot-on-the-plane Principle: Apply non predictive control

Mar 26

10 18 Entrepreneurship as a Technology for Social Change

Mar 31

Proposal Presentations

Apr 2

10 19 Proposal Presentations

Apr 7


Appendix E

BMG 214: Introduction to Entrepreneurship

Business Proposal Prepared For: Albert James

Prepared By: Matthew Jones, Taylor Herbert-Copley, Marcus Lam-Peters, Jake Quain,

Philippe Demers


Transbo Shipping Business Plan


Table of Contents Management Team

Executive Summary

Business Description

Marketing Plan

Financials

Offering


Management Team

CEO: Matthew Jones Matthew Jones was elected CEO and majority stakeholder due to the high amount of capital resources he invested into the company, and his entrepreneurial passion. He began his first company “Matt’s Drive Clearing” in 2006 and grew the business to 120 clients in the Bragg Creek area before he sold it in 2011. He is currently in his third year of a management and entrepreneurship degree at Bishops University, with a strong background in accounting and finance. VP of Management and Brokerage: Taylor Herbert-Copley Taylor was a good fit for our VP management role in the company. Taylor is currently in his second year of his business administration degree and is looking at doing a dual concentration in Management and Human Resources. He is a well-organized individual with good people skills. He is able to keep individuals on motivated and focused on company goals. As for brokerage VP, we felt within Transbo Shipping we needed our own broker. Taylor took an interest on the topic and stepped up for the position. VP of Marketing: Marcus Lam-Peters Marcus is a fifth year student completing a Sports Studies degree with a minor in Creative Writing. He is very socially connected and involved in the communities he is affiliated with. Marcus has an interest in trends that effect industries and how companies navigate through the various hazards that effect individual businesses. With a passion for customer relationships Marcus was a natural choice to head marketing initiatives. COO: Jake Quian Jake was selected to be our Chief Operations Officer due to his background in sales and planning. He is from Hefei, China where he helps manage his families hospitality business. He is currently in his fourth year of general business studies at Bishops University. His background in management will play an integral role in Transbo’s daily operations. VP of Communication: Philippe Demers Philip will be in charge of the communication. As he speaks French and English we believe that it is indispensable to communicate in the two languages in Canada. His study in marketing will be an addition to his competence. Philippe is currently a student, but he worked five years in international relation based in Vancouver, Canada.


Executive Summary We want to give people an opportunity to get fast, affordable shipping options from the United States. We will be serving clients in the Sherbrooke area, specifically starting with the Bishop’s University community. We are keeping our target area small to start because of the way our service works. What we will be doing is driving across the border, at the Derby crossing. On the other side of the boarder there is a warehouse that people from anywhere can ship products to. By doing this people are able to get free shipping across the U.S. We think there is a viable business to be made by driving down and picking up products for clients. Many university students want to order products from the U.S but do not want to pay the outrageous shipping expenses. We realize that many students do not own cars and are unable to drive to the border, so we would be providing a desirable service to them. To market to our customers we will use a couples sources: website, word of mouth, and flyers. Although these forms of marketing are very basic we feel that they will be effective to our target group. Since Bishop’s University is a very small school, word of mouth is the most effective way of getting our service out to people. The website will be very important for both people who haven’t heard of our business and for people who have heard of it but are looking for more information. Start up costs are going to be low. We already own a commercially licensed truck that we will use to drive down to the United States to pick up orders. We do not need to hire any additional staff because we will only go down to the border limited times during the week. We will not be dropping of product directly to the customer, they will have to come to where we store inventory. We have an extra apartment bedroom that we will transform into a storage room. Our only costs will be for the website creation/maintenance, flyers, and gas. We will be looking to turn a profit after the first month of being operational. If we are able to secure committed cliental be are hoping that we will be going to the border to pick up full palate loads twice a week.


Business Description The Business: We are Transbo Shipping. We are a short distance shipper specifically serving the Eastern Townships region of Québec. Working in part with Kinek, Norman G. Jensen located in Derby, VT, our customers are able to utilize many American’s companies “free shipping in the lower 48” deals, while retaining a cost effective door to door service priced substantially lower than competitors such as UPS and FedEx. Currently, we are working with A&A Contract Customs Brokers Ltd. on an as needed basis, until October 23, 2014 when we will be taking the Customs Brokers Examination. By January 2015 we will be able to bring customs brokerage in house further reducing our costs. Functionality: We allow individuals who do not own a vehicle or do not have time to go down to the U.S. during normal business hours to take advantage of free and low cost shipping within the continental United States and provide customers with reasonable brokerage fees. What we do: We ship products specifically from Derby, VT to the Eastern Townships, for a lower cost then that of UPS and FedEx, all while maintaining a higher level of service. Our customer demographic is varied and predicted to change substantially over the life of the company; however, retaining previous demographics as it expands. When we open our doors in September 2014 our primary customer will be university students aged 17-25 who do not own vehicles. As our brand image and reputation develops our customer base will widen, first appealing to seniors and then middle-aged people (25-50). The Service Provided: We provide the same services as large shippers such as UPS at a lower rate with more personal service. We offer customs and brokerage service through A&A Contract Customs Brokers Ltd. We offer shipping insurance at an added cost. We have a secure storage area so you will be able to rest assured that your package will remain safe throughout its journey. Furthermore, all of our drivers are experienced and fully insured. We also provide many services that larger shippers may not provide such as delivery on demand (package delivered at pre-set time), tracking updates via SMS, and most importantly, convenience and affordability. Business Industry: Transbo Shipping is a member of the shipping industry. Product Distribution Channel:


We utilize an indirect distribution channel. Through co-operation with Kinek, Norman G. Jensen we reduce Canadian consumers shipping cost. Pricing Change in the Distribution Channel: Pricing changes in the distribution channel based upon external factors. Changes in warehouse charges by Kinek, Norman G. Jensen would have substantial effect on the cost to consumers. Flow of product from source to end-user: Consumer → American Website → Consumer Buys Product → Order sent to shipping warehouse → product shipped to Kinek, Norman G. Jensen → Customer Contacts Transbo Shipping and arranges delivery → Product Arrives at Norman G. Jensen → We pick product up → cross border (pay fees/duties) → Deliver it to customer specified location (ie storage, business, house…) → Bill Customer Position of the business in the channel: Transbo Shipping is positioned as a final shipper in the distribution channel of other companies’ products. Existing and new channels: Currently there are three ways to receive packages from the United States and they are costly or timely ways. Currently an individual can order from a website to Kinek, Norman G. Jensen and go to the warehouse in Derby, VT and pick up their package. This is approximately a 1.5 hour round trip should crossing the border be uneventful. This costs approximately $36.5 [Minimum Wage 1.5hrs ($15.50) + Fuel ($14) + Kinek Fee ($7) on average, in the best case scenario and not taking into account Canadian duties. The second way utilizes a shipper such as UPS. Shipping prices to Canada vary greatly but they are substantially higher than when shipped within the Continental United States. A typical package valued between $40.01-$100 has a UPS Brokerage fee of $19.95 on top of regular shipping charges, duties and additional service fees. The third way utilizes USPS and Canada Post; however, while less expensive than a company such as UPS the international shipping rate is high, and they aren’t accommodated to service a wide array of products. Satisfying a Need: Individuals who want to get the best possible price on a product need our service. Display: We enhance low shipping prices within the Continental United States, and we displace large carriers such as UPS by beating them through prices and services offered. Benefit: We provide timely affordable shipping with more personalized services than a


major carrier. Unmet Need: There is currently an unmet need for an affordable international shipper. Today there are only two major companies that both charge an arm and a leg for brokerage and importation services.


Marketing Plan

Defining the Market:

Members of the Sherbrooke and neighboring communities (The Estrie region) who want a product shipped from the United States to their home, business or to be available for pick up at our location. Specifically personal shoppers and small business owners. We provide a service which lowers the cost of shipping and delivery from the United States by consolidating the hidden fees of importing.

Many Canadian consumers order products from the United States to a) get products that aren't available for sale in Canada and/or b) to get products at a cheaper price than are available in Canada. The cost of this is inflated by hidden border fees and delivery brokerage fees. Our research has been unable to find a company providing this brokerage service to the Estrie region with our sales model. The shipping brokerage's already in place are UPS and FedEx.

Sherbrooke itself has a population north of 154,000; the Estrie regions total population is over 312,000. As brand recognition increases and our sales model becomes proven we intend to expand first through Quebec and long term inter provincially. The market for the product has already been established for quite a while. UPS and FedEx have a stranglehold because they are the only options for consumers in the Sherbrooke area. Our ability to capture some of this market will depend on our ability to a) make ourselves a reliable and recognized option in this area (brand recognition), b) make our value to the consumer over the established brokers undeniable.

Positioning:

We would like to be viewed as a reliable and cheap delivery/shipping service, an alternative to the major brokers at better value. Keeping money in the peoples' pocket. The service we provide is not new by any means but we do believe we can provide it at better value to this community than larger brokers. The benefit lies in the savings to the consumer.

We do not anticipate much of a reaction from our competitors if any. UPS and FedEx are companies that have been established for a long time and operate internationally. We are attempting to target a relatively small segment of their market (Sherbrooke and neighboring communities). It's small for them but large for us. Our value is created because the cost of our service is lower. The only ways for them to compete with us would be to lower their charges. It is not realistic that they would feel so much pressure because of our business that they would do so. We are not providing a new or different service. Our sales point is that we have save consumers money. Everyone wants to save money.


Our company’s size and our desire to focus on servicing an area makes us unique. We will open up as a business with relatively low operating costs. This is what allows us to keep our costs so much lower than our competitors.

Distribution:

Our distribution channel will be on road. Driving a commercial truck from our base location in Sherbrooke across the border into Vermont to our shipping receiver located in Derby. There the truck will be loaded with customers orders. The truck will then return to our location at which point the items will be handled accordingly. Either they can be picked up directly from us or for an additional fee we will deliver it directly to their door.

We will need to form a partnership with a customs broker. Norman G. Jensen Inc. is such a company founded in 1937. They have been working with Canadians businesses for a long time and have locations spread out across the border, They have a great reputation for quality and integrity. We will be doing business with their location in Derby, Vermont.

Costs

Apartment Rent: $10,800 a year; however, 2 people living there reduces cost to $3,600 a year

Vehicle: Paid for

Insurance: - Truck $3200 - Shipping Insurance: Variable assessed on a by customer basis (size of package, fragility of contents etc.)

Fuel: Variable, approximately $40 per trip at current prices, dependent on load size and fuel price.

Use of Kinek-Norman G. Jensen: $16/crate, skid or palate, $5 for package under 50lbs, $7 for package over 50lbs, avg. $8.75 per package (would be less with partnership)

Other Costs: approx $4500

Sales Plan:

Sales strategy:

We intend to create value by focusing on the money consumers save by using our service. We want to make it clear to our target market that shipping/delivery fees are inflated by broker monopolies and that we provide a service that is friends to


consumer’s wallets.

Promotions plan:

We have two market segments to target. Individual consumers who purchase personal products and small businesses that import products from the United States. Individual shopping of this type is done largely online and this is where we will focus our promotions to them. We will enlist the services of social networks to promote ourselves within the area and lead consumers to our website. We also intend to set up promotional booths in malls in the communities that we intend to service. This will hopefully reach potential customers who are not big Internet shoppers as well. Small businesses in the communities will be researched and potential candidates will be identified. We will then contact these businesses directly and inform them of our value you to them and hopefully earn their business.

We want to begin implementing our sales strategy by Canada Day of this year. This should give a few months before fall and winter seasons (peak shopping seasons) for us to gain some presence in the community. We intend for our company to be in full operation by September of this year.

Competitive positioning:

Our product is not unique; our value is in the savings to the consumer. Therefore our product cannot be copied only our prices which is unlikely to happen considering the size of our competitors.

The most important factor to our success is brand association. We need to be first thought of as another option alongside UPS and FedEx. Then asserting our value while maintaining a service equal or greater to our competitors. The barrier to competitors that will be worsened is a shrinking pool. A smaller potential market as we increase our hold will make the delivery/shipping industry in Sherbrooke and neighboring areas less enticing.

Forecasted income:

First year our target market will be Lennoxville, specifically the Bishop's community. The school has a population of about 2,200 students and includes a listed staff of about 500 people, some of whom live in the Lennoxville area with their families. We expect to service about 3.5% of the Bishop's/Lennoxville population our first year with many of those people likely shipping through us more than once. Lennoxville has about 3,600 people (not including Bishop's) living in the area. We hope to have a customer base that rivals our Bishop's market in size and volume of sales by the end of our first year. First year revenue = est. $4,040.


Our second year we will be expanding the area we market to and service. Our primary market will be Sherbrooke which lists a population of 147,250 and our secondary market will be the rest of the Eastern Townships which collectively have 175,000 inhabitants. This is a large increase in the size of the target market and to service 1.5% of that group would mean we vastly increase our revenue in the second year. Second year revenue = est. $109,360

By the third year we hope to again expand our market to another area that is close to the border and will allow us to continue using a strategy that limits cost to the customer. Currently we feel that setting up in Lethbridge, Alberta would provide this. Similar to Sherbrooke in that it's a university town with a total population of 85,700, we hope to service 3.5% of this market on first year entry. With this boost we should be nearing 20,000 customers annually by our fourth year. Third year revenue = est. $297,240.

Launch Plan We want to implement our business in two phases. Phase one will start during the summer, this will consist of the website creation and spreading the word of our service. We want to use social media to spread the word to the Bishop’s community. Phase two will be implemented during September 2014; this phase will include the set up of our business. Once we have gained clients we can start our actual business of driving down to the United States to pick up products.


Financials: Expected Revenues: ($20 Per Package) Bishops/Lennoxville In our first year we hope to capture a 3.5% market share in Lennoxville and Bishops University with a predicted growth rate of approximately 300% over the first three years. In year one we hope to have 202 individual customers using our service at least once leading to approximate accrued revenue of $4,040. In year two, we expect to have 608 customers using our service leading to $12,160 of accrued revenue. Our predicted 1,824 customers in Lennoxville and Bishops should allow us to see approximately $36,480 of accrued revenues by our third year. Full Timeline Year 1 Year 2 Year 3 Accrued Revenue L/B $4.040 $12,160 $36,480 Sherbrooke/Eastern Townships In our second year we expect to be able to capture a 1.5% market share in Sherbrooke and the Eastern Townships with an approximate growth rate of 100% annually over the first two years in this market. In our first year in Sherbrooke and the Eastern Townships, we expect to have 4,860 individual customers allowing us to gain approximately $97,200 in accrued revenue. In our second year in this market we expect to see 9,720 customers leading to accrued revenues of approximately $194, 400. Full Timeline Year 1 Year 2 Year 3 Accrued Revenue S/ET Not In market $97,200 $194,400 University of Lethbridge/Lethbridge In our third year we expect to be able to capture a 3.5% market share at the University of Lethbridge and the city of Lethbridge, Alberta. During our first year in this market we expect to see 5,568 individual customers leading us to approximately $66,360 in accrued revenues. Full Timeline Year 1 Year 2 Year 3 Accrued Revenue UL/L $66,360 Total Expected Revenues Full Timeline Year 1 Year 2 Year 3 Accrued Revenue $4,040 $109,360 $297,240 Price Impact on Revenue Predicted Revenues: ($10 Per Package)


If we reduce pricing from $20 to $10, we expect to double our entry market share, and increase growth rate by 33% across the board. By lowering our price by 50%, we see an increase of revenue in years one and two and a decrease in revenue by year three. Full Timeline Year 1 Year 2 Year 3 Accrued Revenue ($10) $4,050 $113, 365 $253,550 Predicted Revenues: ($30 Per Package) If we increase pricing from $20 to $30, we expect our entry market share to drop by 50% and our growth rate to drop by approximately 33%. By increasing our price 50% we could expect to see a substantial drop in revenue. This is understandable because we are a low cost alternative to shippers such as UPS, and at a high price point customers typically utilize services of more established shipper. Full Timeline Year 1 Year 2 Year 3 Accrued Revenue ($30) $3,030 $78,960 $189,420 Demand Impact on Revenue ($20 Per Package) Lower Than Expected Demand: If the demand is lower than expected we expect to see revenues drop substantially. For this model we assumed that the entry market share would drop by 50%, and our growth rate in each market would drop by 33%. As illustrated below, revenues would drop substantially if the demand dropped and we did not adjust pricing. Full Timeline Year 1 Year 2 Year 3 Accrued Revenue $2,020 $52,640 $104,690 Higher Than Expected Demand: If the demand is higher than expected we expect to see revenues increase substantially. For this model we assumed that the entry market share would increase by approximately 50%, and the growth rate would increase at a steady 33%. As illustrated below, revenues would increase drastically if there were higher than expected demand. Full Timeline Year 1 Year 2 Year 3 Accrued Revenue $8,100 $226,820 $507,100 Capital Requirements: With an expected loss of $9,270 in the first year we require a $25,000 in order to sustain business, and develop our brand image. We have $33,000 in tangible assets (vehicles) and the $25,000 would go to the following expenses during the first year: Rent ($3,600), Insurance ($6,000), Fuel ($1,820), Registration ($190), Advertising ($500), Maintenance ($1,200) and Miscellaneous Expenses.


Forecasted Expenses: In our first two years our expenses are relatively low with the major expenses being insurance, rent, and fuel. However, in our third year when we expand into Alberta our expenses will increase substantially primarily do to the fact that we must now insure and maintain two buildings, two vehicles, as well as acquire a second vehicle for Southern Alberta. Forecasted Expenses Year 1 Year 2 Year 3 Rent $3,600 $3,600 $15,000 Insurance $6,000 $6,000 $12,000 Fuel (Assuming 1 Package/Delivery) $7,070 Fuel (Assuming 1 Delivery/Week) $1,820 Fuel $10,000 $30,000 Registration $190 $190 $190 Advertising $500 $5,000 $10,000 Maintenance $1,200 $2,000 $2,500 Equipment $6,000 $35,000 Total Expense $18,560 Best Case Expense $13,310 $32,790 $104,690

Forecasted Earnings Before Income Tax (EBIT) In the first year we expect to be operating at a loss, in order to develop brand equity; however, we expect to see explosive growth in years two and three (2015-2017). We expect to see explosive growth after the first year because the market base will be growing, thus reducing our fuel expense. Our fuel expense will be reduced with a larger market because our revenue per trip will increase. The model below is based on projected market shares, growth, and revenue generated from charging $20 per package.

Forecasted EBIT Year 1 Year 2 Year 3

Forecasted Annual Revenue

Bishops Students $1,540 $4,620 $13,860

Lennoxville $2,500 $7,540 $22,620

Sherbrooke $44,700 $89,400

Eastern Townships $52,500 $105,000

UofL $6,360


Lethbridge $60,000

Total Revenue $4,040 $109,360 $297,240

Less $15,000

Forecasted Expenses

Rent $3,600 $3,600 $15,000

Insurance $6,000 $6,000 $12,000

Fuel (Assuming 1 Package/Delivery) $7,070

Fuel (Assuming 1 Delivery/Week) $1,820

Fuel $10,000

Registration $190 $190 $190

Advertising $500 $5,000 $10,000

Maintenance $1,200 $2,000 $2,500

Equipment $6,000 $35,000

Misc. Expenses $8,000 $10,000 $20,000

Total Expense $18,560 $42,790 $94,690

Best Case Expense $13,310 $42,790 $94,690

EBIT ($9,270) $66,570 $202,550


Offering We would like to form a joint venture with the Kinek Company. A joint venture would be mutually beneficial for both companies because it would mutually increase the brand awareness of both companies. We propose to have Kinek branding and advertisements on our website, in return for a lower rate, and our advertising on theirs. Both parties would gain recognition through mutual advertising. Additionally, we would like to offer 10% holdings in Transbo for $25,000. This money would allow us to remain in business throughout the first year, and it would be paid back in the first quarter of year two.

The effects of experiential learning and entrepreneurship research paper

Small Business & Entrepreneurship

Transcript of The effects of experiential learning and entrepreneurship research paper