Russ: This is the BusinessMakers Show heard here and seen online at TheBusinessMakers.com. It's guest time on the show and I am honored to be out on the campus of the University of Houston right in the heart of the Wolff Center for Entrepreneurship because I'm here with the founder of the Entrepreneurship Program out here at the University of Houston and the Chairman Emeritus of the Wolff Center for Entrepreneurship Bill Sherrill. Bill, welcome to the BusinessMakers Show once again and thanks for having me.

Bill: Pleasure to be here.

Russ: All right. Great. Now we're here because once again this program has gotten national ranking and I mean numero uno. For 2010 the Wolff Center for Entrepreneurship at the University of Houston is rated by the Princeton Review and Entrepreneur Magazine as the best in the country. Bill congratulations once again.

Bill: Thank you Russ.

Russ: That is incredible. Now but before I get you to talk about it 2010 number one, 2009 number two, 2008 number one and 2007 number two. What the heck happened in 2006?

Bill: Well we just were warming up Russ.

Russ: Great, great. Bill that is so incredible. As I have told you I've travelled around the country. I've seen BABS and I've seen USC. I've seen MIT, TCU, UT and they are serious programs with lots of money and yet this is where it's always won, the championship. How do you explain that?

Bill: Well I think we have the most comprehensive program. We have a method that we use here to really take students and teach them how to take ideas and turn them into businesses and that's very creative. Having an idea is important. That's what inventors do but an entrepreneur has a superior talent in how to turn that idea into a business. It takes a lot more creativity to do that.

Russ: Okay. A lot more creativity to turn one into business than it does to have the idea.

Bill: Exactly.

Russ: Okay. It sounds right on to me but is that probably pretty unique to this program?

Bill: I think it is. We have a core program that's for two years. The same 30 students are together. They study together and we take them through a series of courses that takes them through the business process as we've defined it and then they do a business plan and finally implementation. So it gives them the entire process necessary to start up a business.

Russ: Well I know that you've really focused on the core aspects of business. I remember being here and it would have been in 2008 the first time you won the national contest and when they announced and you went up to the podium and there's a student at the back and I might get this formula wrong but he yelled out, "R minus C equals P," and everybody started clapping.

Bill: You've got it.

Russ: Everybody started clapping. Tell our audience what that is.

Bill: It's revenue minus cost equal profit and that's why we play the game.

Russ: Absolutely.

Bill: So it's a formula that we describe in detail in two courses, the revenue and the cost course. The third course in the business process is capital but capital doesn't make a profit. Operations make the profit and operations is the revenue minus the cost. So trying to have students really understand that and what they do in the capital side of course is fund the business but in addition they increase the return on equity by use of leverage, bring in debt to apply and it gives a chance to up the return on equity out of return on investment which is what the operation makes.

Russ: Bill this sounds so important and yet so basic at the same time. I just remember my personal experiences and experience of others that I've witnessed. So many think when they raise the capital, "Hey we've made it. We got a lot of money." I've seen that evaporate before. I've also seen this lack of focus particularly on the C, on the cost side and people actually have a good model and they're bringing in revenue but somehow or another they just can't press down the cost. Kind of like that.

Bill: Yeah. Control the cost is important and that's why we devote an entire semester to it. The cost - control the cost we use the P&L method and we start with revenue, take away the cost to get sold which is all the cost it takes to get the product ready for sale. Right? That leaves you the gross margin. So when you see the gross margin of business you know what - how much money it has left for the other two categories. The other two categories are selling cost, general administrative, the dreaded overhead and what you have left after that is profit, before tax profit. So knowing what each one of those categories should have in it and controlling each category is the key to controlling cost.

Russ: Okay. Now you already mentioned the program and you still have it kind of limited here to 35 new students every year. Right?

Bill: That's correct.

Russ: Okay. Well have you thought about expanding it?

Bill: Well we thought about it but you see it's unique in that the only way to expand it is 100 percent. We have to add another class and that means we have to double faculty and that's the most difficult thing to obtain well about faculty.

Russ: So you're holding firm with that 35.

Bill: Well we'd love to double but we just haven't had that resource opportunity yet.

Russ: Now there's this other thing that the program does out here though that is way beyond 35 students that I've heard about that in fact I remember the first year that you won I interviewed the gentleman from The Princeton Review and he gave that program great grades and it played a huge role in the recognition. Tell our audience about that program.

Bill: Yes. The first course that we invite all comers from any of the colleges to come and take is called the Overview Course. It's a survey course that covers everything we cover in the program but very thin coverage. It also has a second course called Intrapreneurship for people that will be working within a company. There's only one entrepreneur per company. That's the chief executive officer. Right? So everybody else is an intrapreneur. So we have those two courses available to everybody. People that take those two courses we give a Certificate in Entrepreneurship. So that now has gotten to in both semesters almost 3,000 students.

Russ: Oh my goodness. Okay, so there's like two programs. There's the serious entrepreneurship program but then there's curriculum offered to anybody that goes to the University of Houston.

Bill: That is correct.

Russ: That is so cool. Well I got to tell you my hat is off to you. You guys need to keep doing what you're doing out here because it's fantastic. It's successful and man, oh man, I want to come back and witness a class sometime soon. I think I might learn something.

Bill: You look like a young man with potential. I think we could help you.

Russ: [Laughs] Bill thank you a lot for having me.

Bill: You're welcome.

Russ: You bet. That's Bill Sherrill, the founder of the Entrepreneurship Program here at the University of Houston and now the Chairman Emeritus of the Wolff Center of Entrepreneurship. You're listening to the BusinessMakers Show heard here and seen online at TheBusinessMakers.com.