Forming and managing a student-run business is part of the academic program of the Woltemade Center and Ohio Wesleyan University. The university can serve a laboratory for students to form and manage an entrepreneurial venture. While existing contracts, insurance provisions, liability protections, and solicitation policies must be followed, the University encourages students to generate ideas, prepare a business plan, and implement that plan in accordance with adopted University procedures.
Procedure to Become an Authorized Student-Run Business
In order, to be sanctioned as a student-run business, the student(s) must prepare a business plan that details the need for the business, the procedures by which the goods or services will be provided, and a basic approach to marketing and sales. A pro-forma income statement and a schedule of the source of capital required will be included. The plan should describe the proposed duration of the business. The business plan will be submitted to the Woltemade Center for review, critique, and revision.
The Center will enlist at least two people (faculty or administrators) to act as advisors who will perform this review, critique, and revision. When the plan is complete and approved by the advisors, the proposed Board of Directors will be added to the proposal and the plan will be submitted to the Vice President for Finance’s office for review. Specifically, this review is to assure that the University is not exposed to violations of existing contracts or that the University is subject to unreasonable liability as defined as a substantial increase in insurance premiums as a result of sanctioning the student-run business. The review is to be completed within three weeks, unless a special exemption is granted by the Provost because of the difficulties of gathering the necessary information to make an appropriate assessment.
In case that the student and advisors cannot agree that a business plan is sufficient to be submitted to the Vice President for Finance’s office, the student may file an appeal with the Director of the Woltemade Center. In the case that the Vice President for Finance determines that the business should be sanctioned because of existing contracts or insurance premium increases, an strong effort will be made to find an acceptable way to mitigate the need for sanctions and still allow the student business to proceed. If the student and/or advisors cannot resolve differences with the Vice President for Finance, an appeal can be made to the Provost who will bring the matter to the University Officers for a final decision.
All Student Businesses will need to be approved using the above process annually without exception. The Director of the Woltemade Center shall inform the campus via an email to all employees and students whenever a student business is approved and provide a brief explanation of the business and its key stakeholders.
There is no prohibition against any particular form of organization. But the form of the organization may require independent insurance that names Ohio Wesleyan University as an additional insured. Sanctioned businesses may be able to be covered under the University’s insurance policies, but this will be determined on a case-by-case basis.
Board of Directors
The student-run business must have a Board of Directors with a minimum of three and a maximum of ten members. At least one member of the Board will be a representative of the Woltemade Center as approved by the Center’s Director. The other Board members can be any faculty, staff, alumni or administrators. Any internship credit to be given to students in the business must be supervised by a Board member who has faculty rank. Financial statements (Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash Flows) must be submitted annually to the Board of Directors and the Vice President of Finance. This can be done August 15 or May 15 or at the conclusion of the business but must occur within 12 months of startup or previous statements being submitted.
Employees of the Student-Run Business
Employees of a sanctioned student-run business must be students at Ohio Wesleyan. The business may contract services with outside people but any requirement that these services are to be provided on the Ohio Wesleyan campus must be described in the business plan. Employees may be compensated at a rate not to exceed twice the minimum wage for a maximum average of 20 hours per week and 32 weeks per year unless approved by the Board of Directors. These can be paid as wages or bonuses. Approved compensation that exceed the maximum allowable (regardless of approval by the Board of Directors) will be added to the business’ net income in determining the amount owed to the University’s general operations and fees as described below.
Sanctioned student-run businesses will be assessed any fees that are assessed to other registered student organizations. The university will provide space or other concessions for business paraphernalia consistent with other registered student organizations. If the student-run business reports net income (plus any excess compensation as described above) that exceeds $10,000 in a given year, the business will pay 17% of the amount in excess of $10,000 to Ohio Wesleyan University for the University’s general operations.
Sanctioned student-run businesses are permitted to display sales material on all community bulletin boards and posting areas. They may place up to one piece of mailing into community members mailboxes (students, faculty, administration and staff) per month by working with the mail room staff. They may send a broadcast email once per semester to members of the on-campus Ohio Wesleyan community through our normal campus-wide email distribution mailing list. Door-to-door solicitation in student residences (residence halls, Small Living Units, fraternity houses) is prohibited without a prior appointment with the resident.
Solicitation in the areas outside and adjacent to student residences requires permission of the Director of Residential Life. The Director’s decision must be made within 10 business days of the submission of the request. In the case that the student-run business’ solicitation plan is not approved by the Director of Residential Life, the student-run business may appeal to the Vice President for Student Affairs and may involve the business’ Board of Directors in making the appeal. The Vice President will provide an answer within 10 business days after receiving a written appeal.
The goal of all the parties involved in this process will be to work to find constructive ways in which the student business might achieve its greatest possible success.
These same rules govern any object that the business wants to locate in these areas (e.g. vending machines, depositories for collecting laundry, etc.).
Non-compliance of Student Businesses and Termination of the Business
If a sanctioned student business does not follow proper procedures or fails to abide by a duly made decision, it shall be subject to a disciplinary procedure and penalties that are developed and published by the Division of Student or other University offices. If, during the operation of the business, the any appropriate University authority determines that the business should not have been sanctioned, the University has the right to terminate the business. Upon the termination of a student-run business, all the assets of said business will be used by the Woltemade Center to support the growth of other student-run business.
The University has a right to amend these procedures for any reason regardless of any potential detriment to existing sanctioned student businesses.