Practice firm

A Practice Enterprise (also known as a Practice Firm or Virtual Enterprise) is a business simulation company used by people in commercial training or at a business schools that operates with business procedures, products and services like a real enterprise's. A Practice Enterprise resembles a real company in its form, organization and function.

Each Practice Enterprise trades with other Practice Enterprises, following standard commercial business procedures in the Practice Enterprise worldwide economic environment. It offers a ‘learning-by-doing’ training programme with the aim to better prepare young people for their future careers and to increase their entrepreneurship potential through running their own Practice Enterprise.

The origins of the Practice Enterprise concept run back to the late 19th Century. Letter exchange clubs were formed in Europe as a way of training commercial communication. The letter exchange clubs became more and more popular and turned into the first practice bureaus around 1920 and were used in a number of countries across Europe.

The first structure to the practice bureaus was the “German Practice Economy” in 1934 and in 1948, the first central office for Practice Enterprises was established by the German Trade Unions. Thereby, a real practice firm market was formed which offered for example a database to connect, bank services resembling real bank systems, mail exchanges and trades with other countries, such as Austria, Sweden and Switzerland. In the 1960s, the first central office organising the services provided to the network was formed in the city of Heidelberg in Germany and the first fair for Practice Firms was held in a gymnastic hall in Northern Germany in 1964.

In 1993, a European project was funded by the European Social Fund and the German Federal State of North Rhine-Westphalia to connect the different networks around the world to an international association. The European project established the non-profit association EUROPEN which at that time was a department of the Bfz-Essen e.V. in Germany. As the association grew internationally and became an independent entity in 1997, it adjusted its name in 2005 to EUROPEN-PEN International emphasizing the members from across the world. Since 2021, the international association updated its name from EUROPEN-PEN International and becomes PEN Worldwide.

The Practice Enterprise concept is applied in different educational systems: from schools, colleges, universities, vocational training institutions³, companies and further training centres worldwide. The primary target group is students from secondary schools and universities. Adults can also participate in the training programme, either as employees, jobseekers, and people with disabilities or women returning to work.

This applied way of learning, the ‘learning-by-doing’⁴ methodology, allows people with all kinds of backgrounds to learn and improve their skills in a Practice Enterprise. Trainees get to know the real-life international business experience and learn and improve important skills such as language and communication skills, intercultural competences and various soft skills which are helpful in finding one’s own path and increase the employability.

Trainees learn many different entrepreneurship skills⁵ such as Administration skills, Accountancy, Computer-based skills (ICT), Human resources management, Marketing and Sales, Purchasing, Business planning, International trade, and Time management. In addition, they also develop the necessary competences to become a better employee or entrepreneur, such as teamwork, problem solving, taking responsibility and developing self-initiative. Because of the international nature of the programme, trainees also learn about intercultural differences when doing business and additionally they have the opportunity to increase their language skills. The skills and competences gained in a Practice Enterprise can easily be transferred and adjusted to other markets, countries and potential work fields.