Student Experiences With The Financial Basis Of Entrepreneurship

The fourth offering of a Junior level course aimed at stimulating engineering student’s entrepreneurial interests in the interplay between engineering decisions and business economics has been completed. In the course, students increasingly experience (1) market identification; (2) plant design; (3) staffing, and (4) the generation of basic financial statements. A novel grading scheme incentivizes the learning of engineering economics for use as an embedded tool in the preparation of financial statements. Projects are usually worked in teams of four and become differentiated as the teams compete for the best market ideas, volume targets, marketing strategies and manpower decisions. After their plans are integrated into multi-layer financial spreadsheets, the teams perform IRR-sensitivity analyses of the underlying assumptions to determine the best ways of operating the business or to alter unsound assumptions. For the most IRR-sensitive parameters, students must define the engineering implications of the dependency . The aim is to create a mindset that sees engineering practice in the context of its economic justification. Final team presentations are made to local financial officers, such as bankers, CPA’s, etc., to both motivate high performance and to have the students gain their first experience interacting with bottom-line, oriented decision makers. Course background materials have credibility because they have been evolved with the help of varied representatives of industrial management.