Venture: Loyola students dive deep into business
On Tuesday we’ll find out how enthusiastically consumers have been shopping, and that has big implications for the economy as a whole, especially in this make-or-break holiday season.
For college students, this time of year can be make or break for another reason – final exams. And seniors face a double whammy – they also need to line up jobs. The unemployment rate for young people with bachelor’s degrees has been falling, but it’s still higher than before the recession hit.
So new grads need to find ways to stand out. How about opening and running your own business? That’s the path some Loyola University Chicago students have taken – and their business is starting to take off.
On a recent afternoon, Sean Connolly has two pressing matters to attend to - he has to write a paper on the Bush Doctrine in foreign policy, and he needs to figure out where to place the CO2 line for his new pizza restaurant’s Coke machine.
Connolly is a political science major who spends his days thinking about American hegemony in world politics – and working with vendors for a new restaurant called Felice’s. He’s overseeing construction of the restaurant on the ground floor of a Loyola administrative building in north side Rogers Park. It’s just the latest ambitious undertaking of Loyola Limited, a company run by undergrads that started last year.
Connolly says he works hard to get taken seriously in the business world.
"We may be students, but we don’t want to get hosed, you know?" he says. "We want to make sure we’re treated like real customers because we are real clients. It’s not play money, this isn’t a play business."
It’s definitely not a play business.
It all started with a piece of land the university owned next to the Loyola stop on the CTA red line. Loyola planned to build condos there, but then the market crashed. So Loyola decided instead to build a 10-unit, luxury guesthouse for parents and visitors so they didn’t have to stay downtown or in Evanston.
Michael Brosko helps manage the university’s real estate and had the idea – why not put students in charge? He and an intern went canvassing business professors to see if they’d take the idea on as a case study.
"I think they thought we were somewhere between used car salesmen and Baptist preachers in trying to sell the idea, but we finally found a taker," he said.
An entrepreneurship professor assigned it to his MBA class, and they spent a semester figuring out whether the idea could work. Their answer was yes.
So Loyola spent $2.8 million building the guesthouse and then, in spring of 2010, turned it over to a crew of seven students to run. The students have done everything from picking out furniture to figuring out how much to charge for rooms, and fielding middle-of-the-night requests for extra blankets.
Michael Brosko’s main job these days is to help Loyola Limited succeed, though he stresses he’s in the background – the students are the ones making decisions. He says the company has to pay back the construction money to the university over time – and he’s hopeful they’ll get close to breaking even next summer.
"I think that there are skeptics still out there now, and I mean, is the building doing well financially? Yeah, it’s doing well. Is it doing exceptionally well? Most businesses in their first few years it takes a while to get going, but you know if we look at the summer quarter versus last year, we doubled occupancy rates," he said.
And the company has grown in size from seven students to 40 as they added two more businesses - a bike rental and repair shop and a property management arm to take care of some buildings Loyola owns. When Felice’s opens in February, Loyola Limited’s headcount will grow to 75 students.
They’re paid the same as other student workers – $8 to $12 an hour. The company operates under the university’s non-profit status, and any profits they generate will be set aside to fund more businesses.
Michael Fetters is an accounting professor at Babson College in Massachusetts who has written about entrepreneurship programs at universities. He says Loyola Limited fits into a bigger trend of growing opportunities for entrepreneurship on campuses - with everything from business plan competitions to students helping to invest university dollars.
But what's unique about Loyola Limited, he says, is the size of the asset the university has entrusted to the students. Fetters says students not only get job experience, but can share their real-world dilemmas in class.
For example: "I’m worried that our customers aren’t going to pay. What steps do I need to take to get them to pay more quickly?" he said. "It all of a sudden doesn’t become theoretical, it becomes, I’ve got to get the cash in the door so I can turn around and pay my suppliers."
The person who ultimately has to worry about all that is Jonathan Ferrera. He’s a marathon runner from Colorado, business major and CEO of Loyola Limited.
With a student-run company, executive meetings take place at night – sometimes as late as 10 p.m. There are other key ways this company is different from one run by full-time professionals. Take succession, for example – imagine if Boeing or Northern Trust or even a neighborhood deli lost its top management every single year.
"The seniors we have in the room, we really need to make sure we pass down everything we know to the younger kids," he said.
So now Ferrera’s juggling not just schoolwork and the business but also the job hunt. That’s okay – running the company has taught him how to keep a lot of balls in the air.
"We get to do so much and we’re given such a great opportunity that you almost feel like, am I going to be bored when I get out of here?" he said. "Am I going to get that job where I’m just kind of sitting there filing stuff. I walk into a meeting now and I’m the ultimate yes or no."
And that’s made him toy with starting his own business. But no matter what, having been a CEO at age 22 can only help as he enters the job market.
And here’s this week’s Windy Indicator, where we take the economy’s measure from an unusual angle.
In this case, that means a visit to Ted Nazarowski’s Arctic Circle Taxidermy Studio on Chicago’s Northwest Side—the only taxidermy shop within the city limits.
Busts of deer line the walls, and the floor is a maze of preserved animals—from the grizzly bear at the window to the tiger on your right as you walk in the door. (Also noted: A collection of South American beetles, a rhino skull, and – peeking out from behind a bison’s enormous head—a polar bear.)
Nazarowski got the taxidermy bug when he was in college — at the Art Institute of Chicago, where he trained as a sculptor. “I put my art training to use,” he says, chuckling. “I was thinking of how hard it is to be a sculptor and make a living. I was going to be a commercial artist, but drawing logos and products wasn’t enough for me.”
An internship at the Field Museum planted a seed, but he worked a series of other jobs before pursuing the dream of blending his art with a particular interest.
“I’ve traveled the world hunting and fishing,” he says, “and I’ve put it together with my taxidermy work, so I can preserve my trophies.”
So, has the recession hurt his business much?
“Definitely,” he says. “When the bottom falls out there, it falls out here too, right? Look, this is not a necessity. This is more a luxury type of item.”
But in recent months, he sees a thaw in the economy, with more hunters coming in to get their trophies mounted. “It’s picking up,” he says. “So hang in there, right?”
Nazarowski, who is 64, hopes to hang in—well, forever.
“I mean what else would I do?” he asks. “I’m already retired, wouldn’t you say? I’m doing what I want to do, and I travel—that’s being retired, isn’t it?