Friday is Entrepreneur Day at The Kid’s school. The fourth graders have booths where they sell goods or services. Some kids have games, others make and sell stuff. Some do face painting, others sell stickers or little toys. The Kid is selling slime; a non-Newtonian fluid, i.e. a fluid whose flow properties are not described by a single constant value of viscosity. Basically, it’s cool gooey stuff.
Production has been a team effort. Packaging, glue, and 20 Mule Team Borax compose the COGS. Marketing has been minimal, but the audience is captive and the product is fun and has sold well in the past. The Kid’s Slime is available in four vibrant colors. He is selling them for $1 each. Others are also selling Slime, but we are hopeful that The Kid’s super-size portions will drive sales.
The school takes 50% of revenue, not profit. After the school’s cut, the remaining revenue goes to the Kid. If we take out COGS, net profit is just $10, which is not a lot of money for a lot of work (and his support staff worked for free!) We discussed a higher price point, but The Kid says others are selling slime for cheaper (though the quantities are smaller) so he doesn’t want to mark it up too much.
I’m going to make sure to show him net profit so the lessons about making and selling stuff are not lost to Mom and Dad’s desire for him to enjoy the experience.
Good ideas. My daughter had a similar activity when she was in middle school, only her school had their own currency too. The upperclass students ran the bank and made small business loans. The student government collected taxes.
I’m surprised that {m}’s teachers are not making the same points about COGS and profit that you are trying to make. Perhaps they see this as a fund raising event and not an economic study. Which, I guess, would not be surprising considering that its a public school, and teachers probably don’t get a lot of training in economics.
The most effective financial lesson I ever did with my daughter was putting her in charge of paying the bills one month. I gave her the checkbook and the pile of bills and supervised as she wrote out each check, and balanced the account. When it was all over she was appalled at how much normal stuff like heat and water cost. And how relatively large sums get eaten up by lots of small expenses. She was so much more careful about money and asking for treats after that.
It does sound like a good learning experience, and if you add to it at home by calculating costs and profits it will be more meaningful.
does this mean there will be a lemonade stand set up on the corner this summer ? once he has had a taste of money - he will want more.