Carole Wolfand started looking for advice when she realized her paint and decorating company had grown too quickly for its own good.

In less than a year, the company went from one store to three. But Wolfand's policies for dealing with all her new employees were ad hoc. She knew she needed help, but she didn't think the company could afford a full-scale review by a business consultant.

She got it anyway.

One of her three store managers contacted Bill Schulte, director of the Small Business Institute at George Mason University, and Wolfand's company, Vienna Paint and Decorating, soon became the laboratory for a group of business students studying the problems of small companies.

The team of three MBA students met for three to four hours a week for 10 weeks last spring to study the company, which Wolfand runs with her husband, Bill Kramer. The result: a manual outlining standard operating procedures for employees on such subjects as dress code, sick leave and vacation time, an employee bonus plan and a slick report mapping out a long-term plan for the company.

"Everything was handled extremely professionally," Wolfand said. "I did not feel like I was dealing with students. I felt like I was dealing with people who are very well-versed in their field."

But these students had an advantage over many students: All three were returning to school after working for an average of 20 years.

Of the 44 cases Schulte saw this year in Northern Virginia and the District, this one was so compelling and well-presented that he nominated it for Case of the Year in a competition run by the Small Business Institute Directors Association. When the group meets next month for its annual meeting, it will be announced that the George Mason students won.

The bill for the students' work is picked up by the Small Business Administration. The university receives $400 for each case its classes take on, but the students receive only course credit for providing what would otherwise cost the business a lot of expensive consulting.

Small Business Institutes, established in 1972 by the SBA, are run out of more than 500 universities across the country. George Mason has participated in the program since 1977. A program at the University of Maryland works with Maryland companies.

Coleman Raphael, dean of George Mason University's business school, said the program helps establish ties between the school and the local business community.

"If you are a business school you should be considering not only what you're going to do to help students, but what you are going to do to help businesses," Raphael said.

Small businesses that participate in the program often come with particular problems in mind, Schulte said, or the students may identify a new opportunity for them. The idea of the program, he said, is to get the students to do research projects for which business owners usually don't have time.

"A lot of small-businessmen know what they want to do and they're so busy doing it and running their companies that they never sit down and {write} a good long-range plan," said Bill Forsyth, one of the students who worked with Wolfand. In this case, he said, "they'd moved so fast that a lot of immediate things had passed them by."

When the company grew so quickly, managers with different levels of experience were hired for new stores. Since they weren't being paid the same, Wolfand wanted to put in writing a fair and objective way of evaluating employees based on sales and other criteria, such as attention to customer service. As the students looked into it, though, they found that symptomatic of the problems the company ran into during its rapid growth.

The students researched compensation plans, getting models from other companies and from trade associations. They wrote a plan for Wolfand that was flexible enough for all three of the company's stores, which had three different sets of problems, the students said.

One student, Jennifer Jones, said the broad-based approach of their report made it a more compelling case.

"We needed to look at the whole picture first. Where you are, where you want to be, what are your short-term goals, what are your long-term plans?" she said. Wolfand didn't have any kind of formal business plan or personnel policy, Jones said. "It was a general lack of direction for the company ... we had to cover a lot of little problems. We took a more broad look at the business and what was going on and how to get the pieces working better together."

Wolfand said she has started using parts of the employee manual that the group drew up for her. The incentive plan has not yet been used, but Wolfand said she hopes to start using it.

Small Business Administration officials tout the Small Business Institute as a win-win-win situation in which businesses, universities and students all benefit. What the students gained from the project was clear: exposure to the workings of an actual business.

David Kaufman, the third member of the student team, said that this method of study is rewarding. More than the case-study approach to business problems, working with companies "brings home the fact that decisions are not always as simple and clear-cut as they may first appear."

(To find out more about Small Business Institutes in this area, call Bill Schulte at George Mason University, 703-323-3471, or Mike Ostrow at the University of Maryland at College Park, 301-454-7833.)