Accounting students craft a five year budgeting plan for Orono-based company
Minnesota School of Business- Elk River students learn about the budgeting process as they apply capital budget models to a local startup company.
With a full debriefing on the specifics for Diabetes Sentry, students went to work creating a bottom up budget, which included operating costs, employee costs, marketing costs, professional services, capital expenditures and a look at cash flow over a five year timespan.
Students broke into small groups to tackle their assigned piece of the budget. Two students acted as the finance department to ensure each piece of the budget meshed with the overall finances of the company.
“In many cases we had to come together to revamp the numbers so that we were in line with what Mike (Russin, a cofounder of the company) wanted and what was realistic based on his company’s projected revenue,” said
accounting student Jeremy Pouliot.
Students also researched similar companies to ensure their numbers were on the right track and in some areas used other companies’ information as a baseline for Diabetes Sentry.
The accounting class worked closely with Mike Russin, one of three cofounders for Diabetes Sentry, to ensure their numbers and ideas were realistic for Russin.
“It’s a win, win for both parties,” said Russin. “The students have the opportunity to apply
what they’re learning in the classroom to a real company and my company gets
some great information that we may not have had the funds or resources to get.”
Once the five year budgeting plan was completed, the class presented their plan to Russin, who challenged them even more by asking clarifying questions or asking how they came upon certain decisions.
According to Pouliot, the entire class worked extremely hard on the project not because a grade was involved, but because they could see the real world application and that it would have a real impact on a real business.
“Simply put, our result mattered because if good enough, it was going to be used by Mike to obtain a SBA loan,” Pouliot said.
After the presentation, Russin commended the group on a thorough plan and confirmed he would be bringing the budget to the SBA.