Wednesday, February 29, 2012

Young Entrepreneur Fair

Gizmo and Spike recently had an opportunity to participate in a young entrepreneur fair held in our area. They had to choose what their "store" would sell, figure out the profit and pricing, produce the item, and then set up a stand to sell their wares at the gymnasium where the even took place. Me and Brady felt that it was very important that the kids paid for all their materials and ingredients, and subsequently keep all the money they might make,  so that they would better grasp the risks and benefits of starting a business.

Gizmo made a variety of cute soaps, and even some tub crayons, while Spike had some gluten and dairy free baked goods. We worked on figuring out how much each item cost them to produce, and then decided on what would be a good price to sell it for. Although I knew it was a great opportunity even if they didn't earn any money, I was pretty nervous that it would be a sad drive home. However, they both made a profit!They both learned a lot about what worked and what did not, and since the mom who organized the event would like to make it a bi-yearly thing, they will hopefully be able to test out those lessons sometime in the late fall.

To explain the method of figuring out how much the items cost them to make, I first started by just showing them the series of math problems needed on a piece of scratch paper. It quickly became apparent that it was not making clear sense to them. I think that having a very visual way of laying something out often makes things easier to understand, so I made a couple of worksheets for them.

The first is a graph used to find out cost of materials in the amounts used, such as how much is an ounce of flour or soap base.
Cost of Materials

The second is the process of adding up all the costs involved, dividing by the amount produced, and then figuring out how much profit will be made.
Cost per Item

Hopefully they can help someone else out as well. :)