All In Business

This is the third in a series of lessons on entrepreneurship. "Entreduction" and "Improving on the Original" help students understand what innovations are, and what it takes to get an idea off the ground. This lesson will take students through the process of calculating risks associated with starting a new business — the decisions and choices they'd have to make and how to calculate what makes something "worth" the risks.

Introduction

roundtableNone of your Business? It's ALL your business. In this lesson, you'll map out the basic decisions you'd have to make to start your own business. You'll weigh the risks and benefits of each decision to determine whether the trade-offs provide a strong enough incentive to get you going!

Learning Objectives

  • Identify steps necessary to plan and start a business.
  • Recognize that there are costs and benefits associated with any new project.
  • Assign their own values to each of the identified costs and benefits in order to determine whether or not to take the risk of starting a new business.

Resource List

  • PBS' s BizKids site includes games, lessons and video clips from the show.  You can view profiles of young entrepreneurs here
  • My Own Business: This site is rich with videos and interviews from people who are in business for themselves. Some of the people providing advice are more helpful than others, but students can learn about incentives, business plans, and marketing from people who have been through all of the ups and downs of starting their own businesses. The audio file index is particularly helpful in finding specifics on deciding on a business and business planning, which are emphasized in this lesson.
  • Small Business Administration: The Small Business Administration of the U.S. provides good information and tutorials for people interested in starting their own businesses. In this lesson, students will be asked to explore the "Your First Steps" section to answer questions and begin weighing the risks and potential benefits of starting their own business.
    www.sba.gov
    www.sba.gov/smallbusinessplanner/index.html

Process

Activity One

Use PBS's BizKids series learn about what it takes to start a business. What do the teenage entrepreneurs in this show have in common? How are they different? Make some notes on the skills they needed and the lessons they learned in getting started in business.

Now answer the following questions about the videos you watched.

  1. What are some of the things the teen entrepreneurs say are most important in starting a business?  [research and planning, having a savings strategy, finding mentors]
     
  2. Describe Jordan’s savings strategy (Buttons By Jordan). [He has a 50/50 savings strategy.  50% is reinvested in his business (short-term savings strategy) and 50% is saved in his college fund (long-term savings strategy].
     
  3. The three girls in Big Quil Enterprises relied on mentors to help them with many aspects of their business.  What did these mentors teach them? [A restaurant owner taught them how to fry oysters, another mentor showed them how to make change and a third mentor showed them how to tell which oysters were filled with sand instead of meat].
     
  4. Why is math important in running a business? [You need to use math to calculate your profit, hourly earnings, and sales revenue. It’s also important to have good  math skills when working the cash register].
     
  5. What are some things that all these teen entrepreneurs have in common?  [They love what they do and they are responsible]

View Interactive Activity
Activity Two

The first decision you need to make is whether you will be in business on your own or in partnership with someone else. Unless your teacher has assigned partners already for this activity, pick a partner or get started alone.

Use the answers to the questions in Activity One to begin mapping out your plan.

Visit the Small Business Administration section called “First Steps – How to Start a Small Business " to answer some questions about your hopes and ideas for your business.

Discuss with a partner what you need to consider, and add to the sections on Business Description, Financial Management, and Management.

Activity Three

Each of the questions you have considered and each idea you have written down points towards a potential risk or cost and a potential reward or benefit. People who are considering going into business for themselves must weigh the costs against the benefits to decide if their idea is worth the effort. This is called a cost/benefit analysis.

Have your students watch several of the videos or read interviews available at My Own Business.

  • Session 1 — Deciding on a Business

    • Elaine Mitchell – Specialized Veterinarian
    • Millard MacAdam – Pro Active Leadership
    • Sophia Garcia – A-Z Glass Company
  • Session 2 — The Business Plan

    • Antoinette Douglas – Mother Love Family Day Care
    • Ezequiel Padilla – Jugos Tropacales Mexican Food
    • Mari Lohr – Graphic Artist
    • R.D. McDonnell – Architect
       

These are real stories of people who have tried their own businesses. Focus on "Deciding on a Business" and "The Business Plan" sections to see what challenges people faced, and what they might do differently if they were starting again.

Activity Four

scaleUse this "Balancing Act" activity to identify the costs and benefits you'll have to consider. Place a number value on each one to say how important it is compared to the other things you're considering on the lists. The activity will help you determine whether you are leaning in favor of or against building the business.
 

Conclusion

Now that your students have a sense of what it takes to start a business. Here are some questions that they might think about and discuss with their classmates:

  • What do you think you’ll do next?
  • Will you start the business or look back to the idea of licensing your product?
  • What are some important parts of a business plan? Why are they important?
  • What are some of the costs (risks) and benefits (rewards) of starting a business?

If you decide to start your own business, one of the next things you’ll have to consider is whether you’ll have employees – and how to keep them happy if you do.

Assessment

Have you considered all the potential costs and benefits that might be involved in starting your business? Check over your printed answers and then hand the journal activity and "Balancing Act" papers to your teacher.

Collect student work on the journal activity and "Balancing Act" activity. Look for examples of student understanding about the risks they would take and the things they would have to consider in order to structure a sound business.