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Two years ago, Arizona State University graduate student Greg Peterson and a friend hatched plans for a TV show that would instruct homeowners how to renovate in environmentally and socially responsible ways. But the two didn't have enough money to cover the production costs, or the expertise to market the show.

They submitted their idea to a new campus program helping students bring business concepts to life, called the Edson Student Entrepreneur Initiative. The program gave them $15,000 in seed money and access to on-campus office space, along with training seminars devoted to student start-ups on topics like product development, intellectual property and finance. It also hooked them up with the chief executive of a local e-commerce business, whom they met with every other week to discuss online marketing tactics.

"That in itself was worth the price of my tuition," says Mr. Peterson, who in December earned his master's degree in urban and environmental planning. He and his partner recently finished the pilot show and are trying to sell it to various cable networks.

Small business is becoming a big deal on college campuses these days. The Arizona State program hands out $200,000 to student ventures annually, accepting about 15 to 20 of the roughly 100 submissions that are made each year. And hundreds of other U.S. colleges and universities also have awakened to the fact that many of their graduates are likely to work for themselves someday. Many are bolstering their courses and extracurricular activities for aspiring entrepreneurs and helping students create businesses before graduation.

It's a far cry from just a decade ago, when most colleges ignored students' entrepreneurial ambitions, or just offered basic business-planning courses in the business school. Now, many schools are adding entrepreneurship majors and minors, holding business-plan competitions for cash prizes and teaming students up with local entrepreneurs. And many campuses are teaching entrepreneurship beyond the business school, to get students in other disciplines interested in business development.

Giving Ideas a Boost

This fall, the University of North Carolina at Chapel Hill will begin offering a three-course certificate in entrepreneurship for graduate students in all academic fields. Those looking to eventually start businesses can pursue an "enterprise" track, while those just seeking basic business skills and an understanding of the entrepreneurial mind-set can choose the "literacy" track, says Ted Zoller, executive director of the university's Center for Entrepreneurial Studies. The school also is creating a venture-capital fund, to be run by professional venture capitalists who will consider investment recommendations from students. Among other things, the exercise is designed to help students learn what it takes to attract private equity investors, Mr. Zoller says.The University of Wisconsin at Madison, which launched an undergraduate entrepreneurship major last fall, wants to encourage its students to learn from one another. It plans to designate dorm rooms by the academic year 2008 so that students who have an interest in entrepreneurship can live together and network. The school also is opening an entrepreneurial-law clinic by this fall, where law students will give free advice to student and faculty entrepreneurs on legal matters such as intellectual-property law and business structure.

Washington University in St. Louis is trying to help student entrepreneurs move past the idea stage with a program it started in 2005 called IdeaBounce. Several times each year, students and locals -- usually about 100 to 150 -- give two-minute "elevator pitches" of their business ideas before a live audience and judging panel. Five winners get $100 each and dinner with the judges, who are often faculty members, venture capitalists and local entrepreneurs.

"We saw lots of situations where people had good ideas, but 90% of the time they wouldn't act" on them, says Ken Harrington, managing director of Washington University's Skandalaris Center for Entrepreneurial Studies. The school hopes that giving students a little boost will compel them to think more seriously about starting ventures.

For-profit schools also are jumping on board. Grand Canyon University, a Phoenix for-profit school with about 13,000 students, opened a new entrepreneurship college in January with 25 students. Starting this fall, a new $30 million venture-capital fund created by a local entrepreneur will dole out $100,000 in seed money to each of about 10% of the business concepts submitted by students. Those students will then be eligible for $500,000 each in second-round funding if their businesses achieve certain benchmarks.

Overall, about 2,140 two-year and four-year colleges now offer entrepreneurship courses, up from about 1,400 in 1998 and fewer than 300 in 1980, according to research from the Kauffman Foundation, a Kansas City, Mo., resource center for entrepreneurs. Kauffman has doled out about $51 million in matching grants to 23 universities in the past four years to expand entrepreneurship education beyond the business school.

'A Very Different Outlook'

Advocates of entrepreneurship education say the new momentum stems partly from a growing understanding of entrepreneurship's key role in economic and job growth, and a realization that more college graduates will start ventures or work at small firms after graduation instead of flocking to corporate America. Also, more young adults are arriving at college having already started businesses or ready to do so -- a shift from the past, when most people didn't launch ventures until middle age.

"We've got a generation coming up that has a very different outlook on life than the one before it," says Jeffrey Cornwall, an entrepreneurship professor at Belmont University in Nashville, Tenn. "They're more interested in balancing their work with their family life, and that makes entrepreneurship attractive to them." Three years ago, Belmont introduced "hatcheries," where student businesses get shared office space and mentoring from faculty, local entrepreneurs and attorneys. About 70 student businesses now participate.

Schools also are starting to realize that traditional business-school curricula do a poor job of teaching the basics of business formation, focusing instead on management and prepping students to work for large corporations, says Judith Cone, the Kauffman Foundation's vice president of entrepreneurship. "What we've learned is really that the M.B.A.'s role has not been to train the entrepreneurial mind -- people who know how to run businesses," she says.

Of course, there are also some financial incentives for schools to push entrepreneurship. Campuses that spur innovation often earn prestige -- and perhaps even more-direct financial rewards. Successful entrepreneurs in many cases have given generous bequests to their alma maters or local universities: Orin Edson, the founder of a luxury-boat company, gave Arizona State $5.4 million in 2004 to start the student entrepreneur program now named for him.

The Dropout Factor

Some skeptics might question the value of teaching entrepreneurship in the classroom. After all, some of today's most successful entrepreneurs -- including legends like Steve Jobs and Bill Gates -- dropped out of college or never attended at all, and learned their business through trial and error.

But supporters and academics counter that while the drive and high risk tolerance natural to most successful entrepreneurs indeed can't be learned, there are helpful skills that can be taught. Entrepreneurial curricula include courses on identifying good opportunities, cash-flow management, handling growth, intellectual-property law, venture capital and marketing. And many courses are now geared toward entrepreneurship in particular fields, such as engineering, science and technology.

"I can't teach somebody to have passion, but I can teach them things to improve their chances of success," says Mr. Cornwall of Belmont. He cites studies that have found above-average survival rates for businesses founded by college-educated entrepreneurs.

Universities also offer a less-hostile environment for starting a business, so students can get hands-on experience without many of the real-world financial risks of business failure. Many schools are offering students seed money or helping them launch businesses with little or no capital contributed by the students themselves, so there's little to lose if the business goes bust.

And campus programs that foster entrepreneurship give students the advantage of an extensive network of people to work with, both on campus and potentially after graduation.

Adam Bates, the 31-year-old head of the student entrepreneurship club at the University of Rochester, in Rochester, N.Y., is launching a social-networking Web site this summer where users can build online family newsletters. He met his business partners at a "preseed" workshop on campus that pairs undergrads with M.B.A. candidates. His team also was assigned a coach, a local entrepreneur who helped them get a patent. "At the academic institutions there's a broad community of people" to consult with, says Mr. Bates, who returned to school after being involved with a few other start-ups. "It's very hard to go at most start-up projects solo."

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WHEN YOU RUN A lean operation, how do you motivate your work force?

Sure, large corporations with deep pockets can easily dangle bonuses, perks and an array of fancy reward programs (often created by outside consultants) to encourage employees to outperform. Yet, small businesses with limited budgets have a distinct advantage: Chances are, you probably know all your employees. So it's easier to show 'em you care.

In many cases, employees will perform best for a boss who can accommodate their needs, whether that's giving them an afternoon off to take care of a personal situation, re-arranging their work schedule so they can pick up kids from school, or allowing them to telecommute as needed, says John Challenger, head of outplacement firm Challenger, Gray & Christmas in Chicago.

"Small business can be so flexible," he says. "Big companies have policies, and if they make an exception they think the whole world will fall apart."

So when it comes to energizing your staff, being small can be your best advantage. Here are five steps to engage your employees:

1. Communicate your vision

A boss at a small firm should explain the company's missions and goals, preferably right when a new employee starts, says Jeanie Adkins, a rewards consultant at Mercer Human Resource Consulting in Louisville, Ky. Studies at larger corporations show that employees perform better when they understand the company's vision, think the company's mission is worthwhile, and think they can contribute to the success of the organization, she says. "Small businesses have perhaps an easier task than big ones because it's easier to create that line of sight," she says.

2. Acknowledge your limitations

Admit it: You may not be able to provide the same opportunities for promotion that a large company can. But, "what you can do is make sure employees are getting the mentoring, training and development that they need to build a career with you — or someone else," Adkins says. While it sounds counterintuitive, offering an employee valuable (and marketable) work skills can reinforce good performance, she says.

3. Involve workers in special projects

Ask your employees to step away from their routine jobs and come up with creative solutions to customers' problems, suggests Ron Wince, president of Guidon Performance Solutions, a Mesa, Ariz., consulting firm. That sends a message that you value their creativity, which in turns boosts their job satisfaction. "If you go into a company and all people do is punch the clock, you as a customer can almost always tell how the morale is in an organization," he says. Once a month, invite a cross-section of employees to meet for a few hours and work on a particular issue, usually one involving customer service. Not only will you probably get some good ideas, but "the employee feels like they're part of something," he says.

4. Offer "add-ons" in addition to wages

Younger people, in particular, have grown up hearing catch phrases like "work-life balance" and value benefits such as child-care programs, flexible schedules, and even wellness initiatives almost as much as competitive salaries, says Pete Stoddart, a spokesman for Ceridian, a Minneapolis human-resources company. A small-business owner might not have the resources for formal programs, but can promise the flexibility to work with individuals in the event of major life events, such as the birth of a child, the death of a relative or health problems. And consider employee-assistance programs, which have come down in price and can be purchased by small businesses for roughly "a few dollars per employee per month," he says. "It's a very easy thing for a small-business owner to have in place."

5. Get creative with rewards

At trucking company Admiral Merchants Motor Freight in Minneapolis, which has about 60 employees, human-resources manager Augusta Kirk has come up with an original (and relatively low-budget) rewards program called "Run to the Border" to encourage the office staff to exercise. Working under a $2,000 budget, Kirk doles out gift certificates to restaurants and sporting-goods stores to employees who agree to work out for 30 minutes, five days a week, for all of 2007. (Kirk says each work-out session equals about six miles, so by the end of the year, employees who stick to it will log 1,508 miles, roughly the distance between their office and the Mexican border.) "You definitely do have better-performing employees if they are more active," she says. If an exercise routine doesn't work for your staff, Challenger suggests something like an NCAA basketball tournament. "Rather than drive the pools underground, do it for free and give an award out to the winner," he says.
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PayPal Entices Small Business

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PayPal has launched a product aimed at helping small and medium businesses accept online payments securely and cost-effectively.

The Website Payments Pro product is the first non-hosted payment suite from PayPal, a subsidiary of online auction giant eBay. It includes Express Checkout, Direct Payment API and Virtual Terminal functions, so firms can let shoppers choose how to pay for their purchases.

The Direct Payment API lets businesses accept credit or debit card payments. Buyers enter card details directly on the business’s own website and payments are processed through PayPal.

Customers can also pay for their goods using PayPal’s Express Checkout, removing the need to re-enter billing or delivery information with every purchase. Buyers can use any major credit or debit card, Banka account or PayPal account balance.

The Virtual Terminal allows businesses to accept orders offline via phone, fax or mail and then enter the details online so the transaction is processed by PayPal.

Companies can include their own branding on the checkout process web pages and can direct buyers back to their websites to continue shopping after payments are completed.

Carl-Olav Scheible, general manager of merchant services at PayPal said the product was developed to meet the needs of businesses that wanted the benefits of PayPal combined with those of a merchant account and gateway.

PayPal processed ?4.2 billion (US$8.2 billion) of payments in Europe last year, and figures from Forrester Research show it is now a preferred payment method for 35 percent of online shoppers in the U.K.

But PayPal users have been heavily targeted by criminal phishing scams. In July, security firm Sophos revealed that 54 percent of the phishing emails received by its threat analysis centers were aimed at stealing log-in and other details from PayPal users.

Pricing for Website Payments Pro includes a monthly fee and a rate per transaction.

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