Experiential learning is what Grand Island Senior High students in Kristen Klein’s entrepreneurship classes received on Friday. One dictionary definition of an entrepreneur is “a person who starts a business and is willing to risk loss in order to make money.” The website, www.entrepreneur.com, goes one step further by saying that defining entrepreneurial mindset begins “with the awareness that it is our responsibility to figure out how to be useful to others and so empower ourselves.”
Perhaps that second definition is why Klein provided no formal classroom lessons to her students on being an entrepreneur. Instead, she gave the teens in her morning and afternoon classes a 12-page document from the Grand Island Chamber of Commerce that explains how to set up a business.
She then let her students figure out everything for themselves. On Friday morning, and again on Friday afternoon, students began learning just how well they had figured things out when they presented their “$50 Project” business plan to a mixture of school staff and local business people.
The experience was akin to a person going to a banker to request a loan to help start his new business. It also might be similar to an entrepreneur appealing to a venture capitalist to get the start-up money for their business.Klein noted that a banker who loans money to a person to begin a business will expect that loan to be repaid — with interest. Likewise, a venture capitalist often demands as much as 50 percent ownership in a start-up, with the idea he or she will eventually sell that ownership stake to regain all their money, plus a hefty profit.
All the students who made their presentations on Friday received the $50, but they need to repay the banker or make a profit for the venture capitalist. Klein told her students that even if their businesses turn a huge profit, they will not get to keep any money for themselves. “Fifty percent has to go to charity and 50 percent has to go to the project,” said Klein, who explained the 50 percent going to “the project” means money will go to students who do their own $50 Project during second semester.
Klein said the seed money for this semester’s $50 Project came from Union Bank & Trust, Home Federal Bank and Cornerstone Bank.
Friday mornings student entrepreneurs were divided into two groups: one group explained their proposed business plans to a group of people on the east side of Grand Island Senior High, and the others gave formal presentations on their business plans to staff members and business people, including Katie Coufal of Union Bank & Trust; Matthew Schultz, a financial services representative for Principal Financial Group; and Mayor Jeremy Jensen, a financial advisor.
Those people heard Kionah Love, Ashley Jenneman and Dani Olivares talk about KAD Tutus, which would create and sell tutus to parents of young children; Yuvinny Serrano, Austin Kober and Abbey Juett discuss their plans for Island Classic Cleaning, a car washing and detailing business; Isabel Rivera, Valentin Guerrero and Israel Koko explain El Flautero, which would sell pre-made flautas that would be ready to be cooked by customers; and Ellie Westerby, Adriana Vazquez and Edward Gonzalez talk about a proposed bakery, Peace, Love, & Desserts.
A theme for all fledgling entrepreneurs was identifying their competition, with another oft-recurring theme for an intent to slightly undersell their more established competitors. As is common for high school businesses, many students said they would begin by selling their products or services to friends, family members and other people they know. They also hoped for favorable word-of-mouth advertising. But to reach a wider audience, several of the start-up businesses proposed marketing and advertising through social media such as Facebook and Instagram.
All merchandise businesses calculated the cost of raw materials that will go into their products, while the car washing and car detailing company figured the cost of cleaning supplies. Most students realized they were selling themselves as much as their products and services. Consequently, Serrano, Kober and Juett revealed they each had previous experience detailing cars. The students who wanted to start up El Flautero and Peace, Love & Desserts provided their personal résumés.
Each evaluator, playing the role of a banker/venture capitalist, judged the students’ business explanation, marketing strategy, ability to demonstrate a group business effort, and whether they understood their target audience and how to reach that audience. Scores ranged from 1 on the low side to 5 on the high side.
But the best feedback came during the question-and-answer period that followed each presentation.
For example, evaluators asked whether students had properly calculated transportation, fuel and labor costs. Because some merchandise might differ in size or ingredients, they wanted to know if students had correctly calculated per unit costs, especially when those units might vary from one another.
Jensen asked the food business students how they would fill a food order that would far exceed their $50 seed money. Students said they might use their private capital to fill the order. Jensen suggested it would be better to demand prepayment to avoid the risk of bankruptcy if the customer reneged on the order.
Klein said all $50 Projects will be short-lived, operating for two weeks, which is when students will figure out their profits — and hopefully, no losses.