Practice firm

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A practice firm (also known as a practice enterprise, training firm, virtual enterprise, virtual business) is a virtual company that runs like a real business silhouetting a real firm's business procedures, products and services. A practice firm resembles a real company in its form, organisation and function. Each practice firm trades with other practice firms, following commercial business procedures in the practice firm's worldwide economic environment.

A practice firm is a simulated company set up by trainees, with the assistance of a facilitator, to undertake commercial activities and it provides the trainees with hands-on business skills and enhances their knowledge and experience of business practices.

Working in a practice firm provides different types of learners with the necessary skills and knowledge to either become an entrepreneur or find employment after they finish their work in a practice firm. Practice firms do not only foster entrepreneurial attitudes and skills among young people (e.g. secondary school pupils, College students..) but also among adults (e.g. employees, unemployed people, women returning to work, adults with disabilities, University students…)

Although there is no actual transfer of goods or money, other transactions take place: orders are made, invoices issued and financial records maintained - including creditors, debtors, stock holdings and so on.

A practice firm is very often assisted by at least one real company – the mentor company - whose products and services the practice firm silhouettes. Mentor companies supply information on technical and management issues.

A practice firm researches the market, advertises, buys raw materials, transports, stocks, plans, manufactures simulated goods, sells simulated products or services, and pays wages, taxes, superannuating etc.

[edit] A practice firm is a framework for training in:

  • administration skills
  • accountancy
  • computer-based skills
  • personnel management
  • marketing and sales
  • purchasing
  • entrepreneurship

A couple of the objectives of the practice firm methodology are to train the ability to take initiative, self-reliance and also to deliver knowledge on how to establish and run a company. Practice firm participants learn how to work in a team, to take on responsibility, to develop self-initiative and to improve their soft, professional and technical skills.

Trading with other practice firms is an essential component of the concept. Practice firms trade with each other in a closed economy according to strict commercial principles. The global practice firms’ network consists of more than 42 countries and thousands of practice firms.

Practice firms’ international network is called EUROPEN (used in the Europe) or PEN International (used outside of the Europe).

[edit] Benefits of Practice Firms for Companies

  • Get a well trained workforce
  • Reduce recruitment costs
  • Reduce the settling-in period
  • Avoid errors when placing employees
  • Effective system of assessment
  • Provide good public relations opportunities
  • Enable companies to support the community in a practical way
  • Free Product/Market Research for products

[edit] External links

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This article has been tagged since September 2007.