$10 for a Lifetime of Entrepreneurial Learning!
The $10 Business, developed by Dr. Craig Armstrong of the University of Alabama, is an experiential learning exercise that requires students to start their own business using $10 or less.
A member of USASBE, Dr. Armstrong won the Third Place Prize in the 2009 3E-Learning Competition for the $10 Business. One key rule of the exercise requires students only allowed to spend or invest additional funds in their business with profits earned. In the execution of their business plans, students are responsible for keeping a weekly diary that details the thoughts, actions, and responses throughout. Dr. Armstrong notes a very favorable response from his students, who claim this exercise as the highlight of their undergraduate education. A strong sentiment indeed, especially considering that Dr. Armstrong uses the exercise with his first-year entrepreneurship students.
Some $10 Business stats include;
Dr. Armstrong's highest earner made over $2,200; Student used wine corks to make framed displays and magnets for customers.
Same student continued to operate the wine-cork business for the rest of the semester and earned over $3,000.
Two students earned over $1,000 after 5-weeks.
In a class with an enrollment of 47, the average amount of profits earned per student was $200.
This same class generated about $9,400 of wealth on an initial investment of $470.
90% of all students make more than $10 in five weeks
Dr. Armstrong's inspiration for developing this exercise lies in his entrepreneurship research regarding the resourcefulness of entrepreneurs. The $10 Business is intended to identify resourcefulness and expose the entrepreneur's creative side. According to Dr. Armstrong, “This exercise raises the type of research questions that we need to ask in entrepreneurship.”
The $10 Business is truly a test of the imagination. Especially for entry level entrepreneurship majors, this exercise produces an initial shock that soon fades away after some thought and discussion about the ways to start a $10 business. The initial question is always; do I start a service-oriented business or develop a product offering? The answer to this question will undoubtedly be affected by given limitations, but real success comes when a student can most effectively maximize the impact of their initial investment.
Dr. Armstrong does point out, however, that there is a lot of heterogeneity in students' imaginations. Some business ideas are bland, some are really innovative and others fall into the undergraduate party mentality of creating a beer delivery service. All things considered, students turn to service-oriented businesses more frequently than product offerings. Some past service-oriented businesses include dorm room cleaning, home delivery for beer, house painting, and babysitting. One student started a business that supplied out-of-town condo owners with food, supplies, and labor to stock and prepare their homes prior to arrival. As Dr. Armstrong points out, “College service-oriented businesses such as food and drink delivery are much more representative of the majority as opposed to those selling home-made gift baskets.”
The $10 business is also a result of Dr. Armstrong's past experiences with students who have often expressed their desire to learn how to start a business. This experiential learning exercise gives students' the chance to see first hand what it takes to execute such a task. The experience gained is invaluable for the entrepreneur, particularly considering that they began with only ten dollars!
In the lecture that immediately precedes implementation, Dr. Armstrong expresses to the entire class that there are no ground rules for the creation of your business. The only requirements are; the daily maintenance of a journal that includes ideas and business plan initiatives, and observation of the $10 maximum initial investment. Dr. Armstrong encourages the inclusion of emotions and thought in the journal because it serves as a great way to track progress over the five-week process. The journal is graded for completion and weekly maintenance as apposed to quality ad success which will be difficult to judge. The goal of the exercise is to award completion and thoroughness and not to punish students for unsuccessful ventures because successful entrepreneurs often have stories of failure.
Over the course of the exercise, Dr. Armstrong will only share a few journal entries with the class for guidance. The journal does have a very informal style. Dr. Armstrong even recommends creating a separate Gmail account for email all correspondence and accessibility to the gChat and Google Groups features.
Students who have participated in the exercise have started a wide-array of businesses that cover a multitude of industries. The real joy for the professor is to see the spark of imagination among students and their commitment to making it work. Dr. Armstrong told me that, ‘Pushing the initiative is really fun to watch and after 5 weeks, when they want to take the business farther, then I can help.'
Implementation advice from Dr. Armstrong;
Please click here for necessary documents.
Visit the 3E-Learning website for more details.
Visit Dr. Armstrong's website.
Check with your University's legal department in regards to selling products and services on campus.
You don't need a lot of resources to have a great learning experience.
The diary is important because it forces students to keep track of their business cycle.
There is a hindsight bias, meaning that when you write it down you can see it. Entrepreneurship is about taking action on an idea. The process is to imagine the idea, and the evolutionary process that results.
Quotes from Students
"Our professor gave us the seemingly impossible task of starting a business and running it for the semester... with a start up budget of only $10! How do you start a business for $10? I started making crafts with wine corks. I started out small making wine cork boards and refrigerator magnets, and it has been a very good experience so far. I started collecting wine corks from local restaurants and wine stores on a weekly basis to build up as much inventory as I could. Once I got to the point where I had enough capital to start buying corks in bulk, things actually took off."
"This is one of the best activities that I have done during my tenure at the University. I enjoy practical experiences. I wish the University would place more emphasis on activities of this type."
"I really thought that it was a great learning experience because when you first think about starting a business with just ten dollars, it seems impossible, but when you gather information and find a problem that can easily be solved then you can start your own business."