From the book – I SAID YES: Real Life Stories of Students, Teachers and Leaders Saying YES! To Youth Entrepreneurship in America’s Schools (www.amazon.com)

TEN SUGGESTED CONCEPTS EVERY YOUTH SHOULD LEARN

ABOUT BUSINESS BEFORE GRADUATING HIGH SCHOOL

(we want to hear from you on what YOU feel kids should know– see below– please weigh in)

Teaching the free enterprise system and encouraging children to start businesses and create wealth are powerful tools that promote independence and self-sufficiency. Over the past 16 years, I have seen countless examples of how teaching entrepreneurship brings the so-called 3 Rs (reading, writing, and arithmetic) to life for youth. I actually believe that entrepreneurship is educational freedom and it connects to everything young people are learning in school. It’s a practical lifeskill.

I taught a young man in 1994 who learned to do math by selling T-shirts and another young woman learned to read by selling Avon products. Mathematics is incorporated into almost every lesson plan NFTE (the National Foundation for Teaching Entrepreneurship) uses, including the Economics of One Unit, Return on Investment, Income Statement, Rule of 72 and many others. When our students meet business leaders, they write thank you notes and use a dictionary to check their spelling. They also learn to write contracts-a crucial business skill-and often begin reading authors like Steve Covey and Reginald Lewis to refine their skills. Public speaking is also reinforced when each young person participates in a mock sales call and sells to the general public through a NFTE field trip to a local wholesaler followed by a youth trade showcase.

But let’s take a deeper look at the life skills of entrepreneurship. These are the 10 concepts we believe every young person should learn about before they graduate from high school.

1. Mental and Physical Health: This means eating right; getting enough sleep and exercise; and building strong ties with friends, family and community. You are part of a larger world and your network is crucial to your personal and professional success. The most important relationship you will have with anyone for the rest of your life is with yourself-so treat yourself well; do the right things. Everyday, I want you to be able to look at yourself in the mirror and say, “I like myself and I believe in myself and my potential.” This is the foundation of your success. Having good friends and community and building strong families are also foundational to your success. Treat others as you’d like to be treated. If you offer someone a smile and a warm handshake, you will usually receive one back and just maybe you will become friends or do business together.

2. The Joy of Business and Opportunity Recognition: Where others see obstacles, train your mind to see opportunities. That burnt out old building one day might become a hair salon, a high-tech business, a grocery store, or a beautiful mall. While many see despair and crisis in our inner cities, I see opportunity and the gifts of our young people, who have special skills-“street smarts”-that can be channeled into “business smarts.” You cannot teach drive and hunger in business school, but I have met thousands of young people who have the drive and the hunger to make their families proud, build good communities, go to college and exit tough circumstances via entrepreneurship. What are your passions and hobbies? Please write them down on one side of a piece of paper and on the other side, consider what businesses could be started from those hobbies. You should chose something you love to do as it takes a lot of work to make that first $100, $1,000 or more.

3. The Economics of One Unit: This is the brick in the wall of your business plan. Every youth should learn that if it costs $1.55 to make a turkey sandwich with bread, mayo, turkey, lettuce and tomato and you sell it with chips on a plate for $5.00, your economics of one unit is $5.00- $1.55 = $3.45, which is your gross profit. A lot of young people think of how they will make millions. I want you to think how of how you will sell one product or one hour of service and make a profit. From there, think how you will sell dozens, hundreds or thousands.

4. Think through your Competitive Advantage. We all have strengths and weaknesses. Why don’t you write yours down. For example, you might be really good at designing computer websites, but not enjoy budgeting and financials. You need to think about how will you beat your competition? A lot of young people will answer ‘my prices will be better’, but what if your competitors also lower their prices. What’s your edge in business?

For example, three of our students started selling aquariums to downtown offices in Washington, DC. Their angle was that people in the business world are stressed, so beautiful fish swimming around in custom-designed tanks would be calming. For $25 a month, they would also service and clean the aquarium on a 6-12-month contract. The name of their business is Aquatic Kings-“We Treat Your Fish Like Royalty,” is their motto. In their business, they were no longer COMPETING with Petco and Petsmart; they were creating an original business model where they would set up AND service aquarium owners.

5. Marketing, or putting yourself in your customer’s mind and listen. Think about what students in your school like and need. Are there things that could make their lives easier or better? Ask them. Do some research. If you listen to your customer and ask good questions, they will tell you their needs and what causes them stress. For example, one student listened to several working mothers in her community complain that they didn’t have time to organize their children’s birthday parties. Three months later, she built her first business, Dawn’s Parties in a Box, where she would bring games, food, cake and do all the set up and clean up for an affordable price. Her business expanded to other kinds of holidays and events as well. People are fascinating and you can learn so much about them and their needs if you put yourself into their minds by asking good questions and really LISTENING.

6. Leadership and giving back to your community: Every NFTE student will write and defend a business plan. We recently added a philanthropy plan so youth can think about how they will give back to their communities as well.Every great leader in business is aware of the community around them and looks to satisfy a community need. Philanthropy is good business, and if you are known as someone who cares about your community, more people will surely want to do business with you.

7. Think about your Return on Investment (ROI). A lot of parents call me and ask me how they can help their child start a business in schools that don’t have the NFTE program. I love to share this lesson with students and adults. If you put $50 into a bank account, how much will you have in a year at 2% interest? About $51. Now, if you put $50 into mutual funds with 10%, interest how much will you have after a year? About $55. A young person can start with an investment of $50 or $100 to create a business. Some of our students start businesses selling hair accessories, clothing, computers, holiday ornaments or baked goods. They often buy low at a wholesaler and sell for a profit at retail prices. Many will double their investment in two to four weeks, learning a valuable lesson with low risk about investing in one’s self. There are many online wholesalers and stores that students can buy in bulk quantity. One of our students painted pictures and sold them for $70 each. He made over $500 at a dinner event we hosted on May 11th. It is crucial in business to know your monthly financials. What you bring in and what you spend. If you are spending more than you are making, you will likely not be in business to long.

8. The Basic Sales Call: I always encourage students to view selling as teaching. By identifying the consumer needs, a young person can educate the customer on the benefits of the product or service. Let’s take Dawn’s business as an example. For $150, Dawn would set up and clean up a birthday party for a child aged 2-5 for up to 10 children. Dawn showed mothers that she could save them four hours of shopping and more than $100 in costs. She would make appointments and then confirm the appointments. She would win business in 70%-75% of her sales calls and would go the extra mile to get referrals for new business from her customers.

9. How to Write a Business Plan: There is an adage that goes, “Failing to plan is planning to fail.” A lot of young people have visions and dreams. But by putting them in writing, I am convinced their chances of success will quadruple.Every student will write and defend a business plan after completing 60-80 hours of coursework at NFTE. Through this exercise, business executives and their teachers can spend time with them and mentor them on their financials and more. Having a few extra sets of eyes is invaluable, especially if you want to compete in our nationwide competitions or access capital from investors.

10. Consider an internship. If you love animals, consider an internship at the local humane society or a part time job at Petco. Learn from others. How they run their business. How they manage inventory. How they get customers to walk into that front door.

* Tips created in partnership with Steve Mariotti

President and Founder, National Foundation for Teaching Entrepreneurship

Now its your turn– please ad your top tips for youth with your name and email– we just might be able to use them and share them with thousands of young people — especially during these tough economic times


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Comments
  1. Please weigh in now with your thoughts — what every youth should know about to be successful in business…

    Julie

  2. Indeed not only kids should know/learn that but also every entrepreneur willing to create its own business or purchasing an existent company.

    I’d add an 11th concept:
    – advertising the right way.

    I mean starting locally with business cards, radio, etc. when the money starts to come in your business reinvest a part of this cash to generate more buzz around your company & services and so on.
    Don’t do the common mistake to spend ALL your spare cash in a huge campaign leaving out close to bankrupcy!

    Try, test & monitor your advertising choices.

    To Your Success!
    AO.

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