Business capstone program enters second decade of helping regional organizations thrive

Khupsamlian “Sam” Khaute grew up in a small town at the foothills of the Himalayas in rural India where his family members brewed fresh chai (tea) many times daily for themselves and guests.

When Khaute immigrated to the United States in 2013 at age 33, he had no work experience in this country and faced challenges finding a job.

After six months, a refugee from Iran gave Khaute a job in his coffee shop. Khaute didn’t know anything about coffee or even the difference between a bagel and a donut. His boss trained Khaute as a barista, and he grew to love the coffee business.

A few years later, Khaute decided to use the skills he had developed to open his own coffee shop. However, he lacked business expertise.

“I had no idea how to get started. The business side was totally new to me,” he recalled. “I am not very good with numbers. Numbers freak me out.”

Luckily, in 2018 Khaute met Bill Jones from The School of Business at Portland State University. Jones had been administrating, directing, teaching and client recruiting in the capstone program since practically its beginning (Jones recently retired from PSU).

Undergraduate business capstone students provide free business consulting advice to entrepreneurs, established businesses, nonprofit groups and government agencies. This academic year marks the program’s 10th anniversary.

Undergrad students at many other business schools only experience business consulting through hypothetical computer simulations. Unlike at PSU, students often don’t work with actual companies until they enter an MBA degree program. Community engagement at all levels is a big selling point of PSU.

Creating a business-focused capstone

Back in 2011, under the umbrella of PSU’s innovative University Studies general education program, all graduating seniors completed a service-learning capstone, but “they weren’t business-focused,” said Melissa Appleyard, associate dean of graduate programs at The School of Business.

Darrell Brown, who was serving as the school’s associate dean of undergraduate programs at the time, suggested The School of Business serve start-ups across the region by bringing the senior capstone program “in-house,” she said.

“He felt strongly that we needed a more consistent experience for our undergraduate students and that it should be focused on serving start-ups founded by women and people of color,” said Appleyard.

Brown appointed Appleyard and three others to a task force to create the program, which reflects PSU’s motto of “Let Knowledge Serve the City.”

The capstone program has become a required 10-week class for all senior business undergraduates. It’s typically the last course a student takes before graduation, said Jones, who helped teach the class for its first 10 years.

In the class, students studying all business concentrations work in teams. They apply what they’ve learned during their time at PSU to address a specific goal. The goal, as defined by the client, might be to increase revenue, find new customers, expand services and/or increase awareness.

The team of students meet with their client periodically, develop a work program (scope of work) based on their client’s goals, collect and analyze data, synthesize their work and then make recommendations that the client can implement or ignore.

“The challenge is for the team members to work together. Each student contributes their expertise to help meet the client’s goals,” said Jones. “This is unlike capstones at other universities where all the team members are in the same major. Those teams don’t have the capacity to handle the client’s other needed services outside of that major.”

A unique model

“It’s a really unique model,” said Associate Professor Ted Khoury, who has taught the class since 2012. “The confidence building and the thresholds they cross through this experience is just amazing for an undergrad. They get to use their entire business education to deliver a consulting package.”

“It allows undergraduates to apply their academic and theoretical concepts to a real-world client,” said Jones.

The program has served much more than just those in the city of Portland. Since those humble beginnings, more than 8,600 students have provided free consulting advice to more than 800 clients, Jones estimated. Almost all the clients are in the four-county Portland/Vancouver metro area. The value of the consulting totals more than $2.6 million since the start of the program, Jones said.

The eclectic nature of the clients reflects Portland’s unique personality, said Khoury. There has been a wide variety of clients over the years. Here are two examples:

Glowing with herbs

Nicole Bryson of Portland participated in the program as a PSU student, graduated from The School of Business in 2012 and now works as a retirement plan investment advisor.

In 2018 Bryson started her own company called Cocoglow with a girlfriend. In their free time, the friends sell little glass jars of plant-based, Chinese medicinal herbs for a variety of purposes, including immune support, energy and digestive health. Their clients include acupuncture and wellness clinics across the nation.

Bryson turned to the capstone program in 2021 to obtain advice on growing the company in terms of its manufacturing, branding and marketing.

The students found a number of grants for women-owned businesses for which Bryson could apply.

The team also researched manufacturing companies in the United States that could package the product for Cocoglow. The students found only a few existed, and that the pipeline for glass containers is not strong.

So instead of jars, they recommended Bryson consider packaging her products in pouches, which are lighter and less expensive to ship. While hesitant at first, “we are considering it strongly now,” she said.

The students also advised Bryson and her partner to implement a subscription program where customers sign up to receive regular shipments in exchange for a discount.

“That’s something we will implement this year for sure,” she said.

Helping immigrants succeed

Khaute, the coffee entrepreneur, dreamed of operating coffee shops that would provide barista training and jobs to immigrants. He opened his first Café Diaspora coffee shop in January 2020 inside Portland City Hall.

When he asked the capstone team for advice, they introduced him to the importance of social media, setting goals, strategic planning and other facets of business he hadn’t thought out. They also suggested he focus on his strength: producing and selling the special blend of chai from his homeland.

“I had a hard time saying yes to that. I started the company because I love coffee. But along the way I realized they were right,” Khaute said.

The students also advised him to produce fresh chai concentrate and sell it wholesale to other shops. He followed their advice and now has 10 wholesale clients.

“That is the main thing we do right now and what we’re known for,” Khaute said. “It’s fresh. We make it every week. I’m the person who makes it. I’m the person who delivers it.”

Khaute had planned to open a second location in 2020. The pandemic shut down both his locations early that year.

“We’re just awaiting reopening. It’s all up in the air right now,” he said.

Khaute became a repeat capstone client in 2021. He still wanted to help immigrants develop job skills and learn English and decided the best way would be to start a nonprofit coffee shop.

Khaute and three friends created Jubilee Hall PDX. They plan to open the shop in mid-2022 inside Central City Concern’s Blackburn Building, 12121 E. Burnside in Portland.

The students researched income and funding sources and studied the operations of other nonprofit coffee shops.

“They gave us ideas about things we can apply once we are in business. We have a pool of information to draw from. That was helpful,” he said.

Producing career-ready students

The program helps students develop confidence in themselves and their abilities. One such student was Carter Young, who graduated with a bachelor’s degree in accounting and finance in December 2021.

Young, who now works as a data analyst at Intel, was part of a five-student team. The students’ client was a water cleaning and treatment company in Portland whose owner has patents for some cleaning processes.

“We helped her figure out a lot of logistics in terms of sales and getting the word out in an industry that is capital intensive,” Young said.

The startup had yet to attract a client base. This gave the students a lot of freedom in developing their recommendations, said Young.

“It was good practice in establishing theoretical business practices at the start of a company’s life. It was something I hadn’t had the opportunity to think about in my other classes,” he said.

Young analyzed the client’s logistics and supply chain management challenges. He also was able to learn about the specialized skills the other students possess, such as advertising and marketing.

“I really enjoyed it,” Young said. “You can’t just learn from textbooks. You need the real practice, even if it’s just presenting hypothetical solutions.”

Learn more about the business capstone program. Want to become a capstone client? Contact Marvin Washington at mwashington@pdx.edu.