In fall 1999, the Small Business Institute at St. Thomas celebrated 25 years of putting student teams to work helping companies of all shapes and sizes throughout the Twin Cities.

It has been a successful quarter of a century. In national competition, St. Thomas SBI teams have won 18 consecutive district-level awards, 10 regional awards and six national awards; that’s more than any other school among the 221 U.S. colleges and universities participating in the program.

St. Thomas is home to one of the largest and best SBI programs in the country; 6,500 students have helped 2,034 metro area businesses and organizations since 1974.

The SBI program gives students a chance to apply their classroom knowledge to real business situations while it helps businesses boost performance and profits.

Consulting teams of three or four students, supervised by faculty members with considerable business experience, are paired with client companies that have applied for assistance. Projects usually focus on one area, such as marketing, human resources, computer applications, operations or public relations. The projects are graded and represent a substantial part of the student’s senior capstone course.

"We offer clients cost-effective research and planning and over the years we have been rewarded with some wonderful success stories," explained Dr. Dave Brennan. A member of St. Thomas’ marketing faculty and director of the university’s SBI, he has supervised more than 200 student consulting projects over the past 13 years.

"And it’s a perfect opportunity for the students," Brennan said. "It’s exciting for them because it brings to life what’s in the books. It’s proven that active learning … the kind that takes place with these projects … produces the kind of knowledge that students remember. It also makes the students more attractive to future employers."

What’s really interesting are the stories behind those numbers and the array of businesses in the program. Past clients have included everything from the Goodrath Sheep Farm to the Magnetic Poetry company, from Castle Rock Orchids to Sweet Martha’s Cookies, from the St. Paul Farmers’ Market to the Northwestern School of Homeopathy, and from R.F. Moeller Jeweler to the Wild Bird Center.

Mark Moeller has used St. Thomas SBI teams a couple of times. In 1990, he asked a team to analyze the possibility of expanding his family jewelry business in Highland Park, or moving to another location, or both.

"You have to be smart enough to do what the consultants tell you," Moeller said. "I had an inkling of what to do, but the students provided the statistical and scientific background that made the decision clear.

"I took their advice on both counts; we expanded in Highland Park and opened another store in Edina. Since then we worked on a second project that involved advertising and promotion. We also went from $1 million in sales in 1990 to $7 million now."

Last spring the North-western School of Home-opathy in Minneapolis had an SBI team design a Web site and prepare a marketing plan. The school, the only one of its kind in the Midwest, began offering courses in homeopathy (treating disease with very small doses of drugs) in 1995.

"Our current class of 36 students is the largest we’ve had," said Jan Forsberg, the school’s administrator. "The two young men on the SBI team were just wonderful. They were bright, creative, industrious and innovative. They did a lot of work on their own to understand homeopathy. They gave us a number of recommendations and we used all of them. And they designed the Web site so that we can edit and make changes to it when necessary."

Wharton Sinkler is president of Castle Rock Orchids. Located west of Minneapolis near Independence, Castle Rock has 20,000 square feet of greenhouse space, 15 employees and is the state’s largest (and only) wholesale orchid grower. The 5-year-old company has two operations: it sells blooming plants to florists and orchids via the World Wide Web.

In addition to being an orchid expert, Sinkler is an Episcopal priest, was an anesthesiologist, and taught sixth, seventh and eighth grades, but he hasn’t worked as an accountant. That’s where the SBI team came in.

He was having trouble sorting out the profits and losses of Castle Rock’s two operations. "The SBI teams helped with marketing and accounting, and their work helped us, especially the accounting," Sinkler said.

Dennis Flaherty of Creative Banner Assemblies in Brooklyn Center has worked with several SBI teams. "I think we learn from each other," he said. "They learn to put into practice what they have learned in the classroom, and I need them to provide me with reliable information. It’s important for them to do a good job."

Most recently, Flaherty used an SBI team to help him determine how many days customers would wait for an order to arrive before looking for another supplier. "We

ship our products nationally, and the SBI designed a questionnaire and did a sampling that helped us determine that our customers would wait two days," he said.

James Hartman, president of Plymouth-based MedAmicus Inc., used an SBI team last year to help reduce turnover and improve the morale of the medical-device company’s 40 production workers.

The MedAmicus workforce represents many cultures, including Somalian, Russian, Hmong, Laotian and Vietnamese. "By having the assessment conducted by the SBI team, it was seen as more objective, and the students offered some very good suggestions," Hartman said. "We conducted an objective pay survey and made some adjustments in salaries, our managers have more contact with the workers and thank them, and now we give our employees time off to attend English-as-a-second-language classes in our building. It is helping."

Meanwhile, an SBI project that a team of four St. Thomas graduate students conducted for the St. Paul Farmers’ Market in 1992 is continuing to help guide development of the downtown market.

"It’s amazing what has happened," said Patty Brand, former manager of the market and for the past three years executive director of the Friends of the St. Paul Farmers’ Market. Her husband, Bernie, has sold honey at the market since 1977.

The four students, she said, conducted research and developed a plan that led to changes in the market in recent years and laid the groundwork for developments that will be presented soon for city approval.

Based in part on the SBI research, Brand said, the market diversified its product line, adding things like fresh meat, goat cheese, baked goods and wild rice, as well as coffee and goodies to eat while shopping.

The market now is proposing changes that include new outdoor facilities at its Lowertown site and using part of a nearby building to open an indoor, year-round market.

"The two men and two women on the SBI team each put in more than 200 hours on the project," Brand said. "They did that in addition to going to school and working their full-time jobs. They contacted and studied other markets around the country and conducted focus groups with our customers, our growers and board of directors. I was blown away by their dedication."

Two SBI projects during the fall 1999 semester looked at ways of reducing peaks and valleys for two very different companies.

The 17-year-old Thorwood Historic Inns, located in the St. Croix River valley, hoped to increase midweek business, while the 3-year-old Wild Bird Center in Wayzata hoped to improve sales during the slower months of January, February and March.

Pam and Dick Thorsen have two historic inns and when they opened their first bed and breakfast it was only the third in Minnesota. They used an SBI team for a marketing project that included increased use of the World Wide Web.

"Working with the team made us focus on important aspects of the business," Pam Thorsen said. "Sometimes you get so busy with day-to-day running of the business, and life, that you don’t pay attention to the things you should."

"We probably put in close to 300 hours on the study throughout the semester," said Laura Yantos, 24, a December 1999 graduate. "We put all the aspects of business we had learned in four years into this final marketing proposal. I think our most valuable contribution was working on bringing in new mid-week business."

Tom Terry designed computer networks for banks for many years before opening his Wild Bird Center in 1996. He turned his hobby of 30-plus years into his career and loves running the independently owned franchise. He used an SBI team last fall to help increase sales, especially during the traditionally slow months after the holiday shopping season. "There’s simply not a big margin in seeds, so we do need to sell other bird-related products, including feeders, houses, books, CDs, binoculars and gifts.

"The students interviewed customers, did surveys and studied other stores. They checked back with me regularly as they developed a strategy for our store, and we had a plan by the end of the semester," he said.

"It was a great learning experience to apply textbook marketing skills to the real world of the Wild Bird Center," said Scott Rudin, a member of the class of 2000. Rudin, 34, who works at IBM, said, "I work for a large corporation during the day and am a night student St. Thomas, so I was especially interested in exploring small businesses. It was fun to see theory applied."

Thorwood Historic Inns and the Wild Bird Center were two of about 50 SBI projects underway at St. Thomas, which is down from about 120 to 130 projects formerly conducted each year. Part of that decrease is due to national changes in the SBI program.

The Small Business Institute started as a test project in 1972 and two years later, the year St. Thomas joined, the U.S. Small Business Administration decided to expand and help finance the program. Eventually, more than 500 colleges and universities participated and the SBA was helping to pay for 6,000 SBI projects annually.

In 1996, federal funding for the program was cut and the number of colleges and universities participating in the SBI has dropped to 221. St. Thomas is the only school offering the program in the Twin Cities; the only other participating school in the state is the University of Minnesota-Duluth.

"We now offer the SBI program to businesses on a sliding-fee scale," explained Brennan. "We’ve had to become more entrepreneurial ourselves in recruiting clients and marketing the program."

Operated on a break-even basis, the cost to the business or organization depends on its annual revenue. Fees can range from $400 for a nonprofit agency or small business to $1,200 for large companies.

There was a silver lining in the federal cutback, Brennan said. "We have more flexibility now, and one benefit is that we can help nonprofits. Before, SBA policies made it difficult for our SBI teams to work with nonprofit organizations, so we are doing more of those projects now, as well as projects with larger companies.

"We also find that although the quantity is down, the quality is up," Brennan said. "When companies pay to participate in the SBI projects, they expect more for their investment, and they tend to get more involved."

Brennan, a nationally noted expert on shopping malls and the impact of large discount stores on communities, has authored or co-authored several studies on the SBI program and its effect on students and businesses. Surveys found that while most students felt their SBI experience was extremely positive, some disliked working as part of a team, and many complained about how much time the projects consumed.

"It’s very time-consuming," agreed Steve Van Gheem, a senior from Green Bay, Wis. "But I really liked it. The first couple of weeks into our project I wasn’t too sure, but I got into it. It was exciting and I think we helped our client."

Van Gheem and three other seniors on his team were working last fall with the host and producer of a public-access cable television program, "Author Author." It can be seen weekly in St. Paul on Channel 6 and in Bloomington on Channel 17. One goal of the project was to help increase sponsorship of the program, and the students each spent about 100 hours researching and preparing their report and final presentation.

"I think working on this project might have an impact on my future," said Van Gheem, a double major in marketing and entrepreneurship. "I’ve been thinking of starting a small business some day, and this definitely has been a good influence."

Ten years ago, Chris Blom was a senior business major at St. Thomas; today he operates a Rochester-based in-home nursing agency called Comfort Home Health Care.

Blom learned a couple of things while working on two SBI projects, one for a computer software company and another for an executive-level personnel agency. "It was a bridge between school and work," he recalled. "Studying case histories was interesting, but it was exciting to work with an actual business.

"This also was my first real experience working on a project with other people … people who have different personalities and skills … and I learned how important it is to have a strong group that you can trust," Blom said. "That was some real-world experience that helps me in my work today."

"We put all the aspects of business we had learned in four years into this final marketing proposal."