Objective: SWBAT develop a budget to sell lemonade Have the students turn to the budget worksheet on page 6 in the Entrepreneur Workbook and begin

Transcription

1 Activity 2: Budgeting Objective: SWBAT develop a budget to sell lemonade Have the students turn to the budget worksheet on page 6 in the Entrepreneur Workbook and begin completing their own budget. Let students know to fill in whatever they know, they can add on as they go. Discuss how in a later lesson they will look at their actual expenses and see how they compare to their estimates. Estimated # cups: Have them estimate how many cups they plan to sell and enter in the appropriate line at the bottom of the worksheet. Some items to consider include how many cups they think they can sell in an hour and how many hours they will be open. Supplies: Prompt students to complete the budget for consumables and capital equipment in their workbook. To complete this worksheet, students will need a Lemonade Recipe and the prices for items. Students can bring in recipes or search online. They will need to determine quantities based on their recipe and the # of cups they plan to sell. To determine how much things cost, they can take a trip to the grocery store, research online or check weekly newspapers. Discuss that they may be able to borrow some items (ex. table). Teacher Resource: If it is not possible to do the above experiential steps you can use the Simple Lemonade Recipe and the Advertising Circular included on pages 17 and 18 in this guide. Select method for pricing supplies: - Addition only provide the list of all supplies and their final cost to students so they will focus on addition. - Addition and beginning multiplication provide listed prices for all supplies that students will need along with one recipe for lemonade. - More advanced - provide resources (circulars, internet) for students to determine the price of the needed supplies from the previous activity. Demonstrate what students are expected to do for the first line item of the budget. Circulate checking to see that students are correctly multiplying the quantity times the cost per unit. Cost per Cup: Based on the total expenses, have the students compute the cost per cup (Total expenses/#cups) and enter in the bottom section of the worksheet. Selling Price: Have the students decide what price they will sell their lemonade for (a starting point could be to divide the number of cups from above into their financial goal; they should also discuss whether it s reasonable do they think people will pay that amount for lemonade.) Enter the selling price in the appropriate line at the bottom of the worksheet. Complete the questions at the bottom of the worksheet to compute profit per cup and how many cups they need to sell to meet their goal. Review: Have them compare the number of cups they need to sell to the number they estimated at the beginning. At this point, they may need to adjust their budget so that they can plan to achieve their goal. If needed to reach their goal, they could adjust number of cups sold, look for ways to reduce expenses or charge more for their lemonade. In deciding how to adjust their budget, they must also look at other factors. If they decide to sell more cups, is that number reasonable? If they decide to sell more cups, they may need to increase their expenses to make more lemonade. If they decide to increase price, will people pay that amount? If these items are not reasonable, they may need to adjust their financial goal. 16

2 ACTIVITY 3: FINDING AN INVESTOR Objective: SWBAT identify and secure an investor for their lemonade business Read through the Entrepreneur Workbook to the first Stop. Explain to students that if they need money to start their business, they will need to ask an investor for a loan. Prompt students to complete the Stop and Write by identifying one or more potential investors. Continue to read through the next Stop and ask for a volunteer to state in their own words the definition of interest. Ask students to refer back to their budget worksheets in the workbook to review the amount they will need to borrow. Give students time to complete the answers in the Role Play Activity on page 8 of the Entrepreneur Workbook. Ask for volunteers to share their answers/give a speech to the class. Ask students to complete the Lemonade Day Business Loan Agreement with their investors. closure Remind students to share their budget with their friends and family. Ask students to approach one or more potential investors for a loan. Challenge students to determine a location for their lemonade businesses with friends and family. Tell them that they need to have a location in mind before the next lesson. EXTENSION If students are proficient using MS Excel, allow them to create their own Planning and Budget Worksheet. COMMUNITY INVOLVEMENT Invite a financial services professional or bank loan officer (who is also a class parent) to speak to the class about investing and interest. SIMPLE LEMONADE RECIPE (Makes 1 gallon or 16 8-oz servings.) Ingredients 12 lemons (2 cups lemon juice) 2 cups white sugar 12 cups cold water Directions 1. Juice the lemons to make 2 cups of juice. To make your labor easier, FIRMLY roll the lemons between your hand and counter top before cutting in half and juicing. 2. In a gallon pitcher combine lemon juice, sugar and cold water. Stir. Adjust water to taste. Chill and serve over ice. 17

3 ADVERTISING CIRCULAR The Lemonade Day Times 4/$1 Lemons Sugar 5 lb./$3 Sweetner 50 ct/$5 Strawberries 1 lb./$4 1/$5 Tip Jar Pitcher Cups 1/$10 50/$3 Ice 10 lbs./$2 Paper Towels 6/$10 Trash Bags 1 box/$6 Hand Sanitizer 1/$2 Gloves 1 box/$8 Stand Signs Ice Chest Money Box 1/$75 1/$20 1/$40 1/$12 18

4 Lemonade Day LESSON 3 Advertising, Building a Stand & Purchasing Objectives Students will be able to (SWBAT) identify a location for their lemonade stand SWBAT create an advertisement to market their lemonade business SWBAT plan their stand design as they prepare to build their lemonade business SWBAT assess cost-effectiveness when making supply purchases Materials & Set-Up Writing utensil Entrepreneur Workbook: Site Selection, Advertising, Building a Stand, Purchasing (extra copies of the advertising template) Markers, crayons, colored paper, poster board (students should bring their own) 8 X 11 white paper for students who are unable to bring materials, or any creative materials you have available Drawings or photos of 2-3 types of cups, 2 bags of ice on the board with prices listed underneath (see Activity 3) Key Terms Advertising: everything that you do to tell customers about your business or product Warm-up Objective: SWBAT recall key terms Ask students to think of one sentence using the words Loan, Interest and Investor. Ask for volunteers to share their sentences. Review: Site Selection Objective: SWBAT identify a location for their Lemonade Stand Explain to students that choosing a location is one of the most important elements of a successful business. (Location, Location, Location) Read through the Site Selection section of the Entrepreneur Workbook. At the Stop, ask students, What s the most important thing to think about when picking a location? Prompt students to write their location in their workbook. Read aloud the information including Characteristics of a Good Location. Explain to students that safety is extremely important for not only the entrepreneur but also for the customers. Remind students that places like grocery stores or malls will require them to get permission beforehand. Prompt students to share their locations with the class. Activity 1: Advertising Objective: Students will be able to create an advertisement to market their Lemonade Stand Read through the Advertising section of their Entrepreneur Workbook. Explain to students that advertising is an important way to get people to notice their business. Prompt students to identify the good elements of the example sign in the workbook. Ask a volunteer to read aloud the Lemonade Lesson on Tips for Your Stand Sign. Ask students to circle at least 3 ideas they will use to generate interest in their business. Prompt students to locate the advertising template in their workbook. Instruct students to be creative as they design an advertisement for their business that is neat, correctly spelled, colorful, and attention grabbing. 19

5 Activity 2: Building Your Lemonade StanD Objective: SWBAT plan their stand design as they prepare to build their lemonade stand Let students know that many kids who have used simple card tables with plastic tablecloths have been as successful as kids who used custom lemonade stands built of wood. The most important thing is to make sure your lemonade stand is sturdy and safe. Read through the Building a Stand section of the Entrepreneur Workbook. Ask students to identify how the various stands depicted in the workbook are made. Prompt students to answer the questions about their stands in the Lemonade Lesson. The way your business looks can attract customers, or drive them away. Make sure it is attractive and remember that the more unique it is, the better it will stand out. - What will you use as the base of your stand (table, wagon, cardboard, etc.)? - What will you use to decorate your stand (table cloth, balloons, flowers, etc.)? - What is the theme of your stand, what will make your stand different than others? - Where and how will you hang your sign(s)? - How will you transport your stand to your stand location? - Can you borrow or get materials donated to cut down on your costs? Call on students to share their ideas with the class and use this time to brainstorm collaboratively to provide suggestions for students who need ideas. Have students draw a picture in their workbook of what their lemonade stand will look like. Activity 3: Purchasing Objective: SWBAT assess cost-effectiveness when making supply purchases Ask students to locate the Purchasing section of their Entrepreneur Workbook. In this lesson, students will select the Lemonade Recipe they will use for Lemonade Day and purchase the items needed for the lemonade and other stand supplies. (Ask students to complete the recipe section on their own/with their mentor.) Explain to students that as entrepreneurs they will need to make smart financial decisions when purchasing supplies for their lemonade businesses, in order to minimize costs and maximize profit. Discuss pros and cons of various purchasing decisions: discount stores vs. grocery stores, national brand vs. local store brand and products that come in different sizes, quantity and quality. Refer to the drawings you made on the board of bags of ice. Write $2 for two pounds under one bag, $1.05 for one pound under the other bag. Ask students to identify which bag of ice is a better value. Explain to students that value is not always the lowest price, but also can be about quality. Refer to the drawings of cups, label them recyclable paper $.15 each, plastic $.12 each, and Styrofoam $.10 each. Prompt students to list advantages and disadvantages to each type of cup (i.e. Styrofoam is low cost, but can t be recycled and is messy). Ask students to volunteer to share which product they would purchase and why. 20

6 Budget vs. Actual For this lesson, students will need their store receipts for grocery items and other stand supplies. Note: If students did not visit a store, (1) Student could use an online grocery store site or weekly ads or (2) Teacher could obtain actual prices for the items by visiting a grocery store and provide them to students. Prompt students to turn to the Budgeting Lesson on page 6 in their workbook. Students will update the worksheet with actual numbers. Ask them to write the actual total cost for each item purchased and compute total actual supplies. Ask students to compare the actual total to the budgeted total. Prompt students to reflect on their financial goal by asking the questions below. - Were the actual expenses greater or less than expected? - Can you still meet your financial goal based on the price you plan to sell your lemonade for? - What adjustment do you need to make? - If the actual expenses were greater than the budgeted expenses, will you have to raise the price per cup? - If you raise your price per cup, do you think customers will purchase the lemonade? - Do you need to adjust your financial goal? - Do you have money reserved for emergency expenses? With the new information, have the students write any revisions to their financial goal, price of their lemonade per serving and the number of cups they need to sell to meet the goal. Ensure students grasp the concept of having to re-evaluate their product price based on supply costs per unit. PFL Extension: Sales Tax Ask students, Why might you have to pay more than the price of the item when you purchase it? Lead into a discussion about sales tax. Sales tax is money added to the purchase price that is collected by the retailer and passed on to the state. The food items on your list will not be taxed, but things like paper cups and napkins will be taxed. Closure Tell students that now is the time to update recipes in preparation for Lemonade Day. Challenge students to conduct a taste test at home (or better yet, have a class contest) to determine the best recipe to use for their lemonade business. Remind students to update costs and expenses on their budget worksheet as they prepare for Lemonade Day. Extensions Have students build the stands at home and share the process with the class. Have students make lemonade at home and bring to class for a class best tasting competition. Allow students who can t bring lemonade to act as judges. Depending on the number of contest entries, award prizes for healthiest, most unique, and all around best tasting. Community Involvement Invite a representative from a building supply store to give tips on how to design and construct a lemonade stand. 21

7 Lemonade Day LESSON 4 Making Healthy Lemonade & Preparing for the BIG DAY! OBJECTIVES Students will be able to (SWBAT) plan for making healthy lemonade SWBAT prepare for running their lemonade business SWBAT demonstrate effective practices of business operation Materials & Set-Up Writing utensil Entrepreneur Workbook: Making Healthy Lemonade, Setting Up, Running Your Business Activity 1: Making Healthy Lemonade Objective: SWBAT plan for making healthy lemonade Prompt students to locate the Making Healthy Lemonade section of their Entrepreneur Workbook. Read aloud the Sanitation and Safety Tips. Allow students to discuss a time they had purchased something from a restaurant that didn t taste good or a time they found their dish was dirty. Ask students if they ever went back to that restaurant. Explain to students that no one wants to buy lemonade that doesn t taste good, is warm, or worse, served in a dirty cup. Prompt students to answer the question, What is your plan for making sure your stand and supplies stay clean? in the workbook. Allow students to share their responses Activity 2: Setting Up Objective: SWBAT prepare for setting up their lemonade stands Read through the Setting Up section of their Entrepreneur Workbook. Review the Things to Think About and Things I ll Need lists. Prompt students to check off supplies they have and circle items they need. Ask students to share if they are taking supplies that are not on the list. Activity 3: Running Your Business Objective: SWBAT demonstrate effective practices of business operation Ask students what good customer service is. Replies may vary but generally look for fast and polite service. Read the Running Your Business section of their Entrepreneur Workbook. Review Providing Great Customer Service. Closure Quickly ask students to state their Lemonade Day goal. Remind students to keep track of the information they ll need to complete the Accounting and Business Results sections on page 18 of the Entrepreneur Workbook; they will need this information to successfully determine if they met their goals. Mention to students they have a chance to win cool prizes if they complete and submit this information on the online Business Results Form on their city s Lemonade Day website. Tell students that setting up and running a business involves a lot of little details but assure students they have learned the basics of business and are ready for Lemonade Day. Good luck! 22

8 Lemonade Day LESSON 5 After Lemonade Day Objectives Students will be able to (SWBAT) measure, record, and interpret financial data SWBAT reflect and evaluate their results from Lemonade Day SWBAT plan future entrepreneurial activities Materials & Set-Up Writing utensil Entrepreneur Workbook: Business Results & Accounting, Saving & Sharing, Reflections & Future Plans sections Lesson 5.1 Worksheet: Comparing Gross Revenue and Net Profit Lesson 5.2 Worksheet: U.S. Free Enterprise System Calculator (optional) Key Terms Donations: money or goods given to an organization or individual that improves their condition Expenses: all costs related to your business Investor: a person who lends money in order to earn a financial return Loan: a thing that is borrowed, especially a sum of money that is expected to be paid back with interest Profit: the money gained from the sale or sales after expenses are paid Warm-up Ask students to share with the class their best memories of Lemonade Day. Ask them to describe any challenges they faced as an entrepreneur. Activity 1: Business Results & Accounting Objectives: (1) SWBAT measure, record, and interpret financial data; (2) SWBAT reflect and evaluate their results from Lemonade Day Read through the Business Results & Accounting section of the Entrepreneur Workbook. Prompt students to total their cash sales, tips, total number of cups of lemonade sold and any remaining supply purchase receipts. After verifying calculations, have students use this information to complete the Accounting and Business Results Worksheets in the Business Results & Accounting section in their Entrepreneur Workbook. This information will be used to complete the online Business Results form. 23

9 PFL EXTENSION Gross Income and Net Profit Congratulate students on their success with their Lemonade Stand. Tell students that you also participated by being the investor for your neighbor. He earned $100 from sales and tips! Wow! That s a lot of money! $100 is his Gross Revenue or sometimes called Total Revenue. He spent $25 for his Consumable Supplies and $15 for his Capital Equipment Supplies. He paid me $5 in interest. So his Total Expenses before Lemonade Day were $45. The money he had left is his Net Profit. If his Total Revenue is $100 and he has Total Expenses of $45, then he has a Net Profit of $55. Oh but then, he needed more ice and had to go to the store and spent $2 of his money on ice. What is his Net Profit now? Then, his sign blew away and he had to pay his sister $5 to make a new sign for him. What is his Net Profit now? When his sales were slow, he decided that he needed something to attract more people. His brother offered his boom box (which was perfect!) but he charged him $10 to use it. What is his Net Profit now? The moral of this story: It s gross to have a small net. Prompt students to work Lesson 5.1: COMPARING GROSS REVENUE AND NET PROFIT (page 27 of Teacher s Guide). (Results are listed below.) Pat Gross Revenue = $203.00; Pat s Net Profit = $ Karina s Gross Revenue = $192.45; Karina s Net Profit = $ Scott s Gross Revenue = $ ; Scott s Net Profit = $ Have students explain why Scott had the greatest Gross Revenue yet Karina had the greatest Net Profit. Ask the students if it is better to have the greatest Gross Revenue or the greatest Net Profit. Activity 2: Spending, Saving & Sharing Objectives: (1) SWBAT discuss the benefits of a savings account; (2) SWBAT make a donation to charity Now that you have money to save, where will you save it? Have students brainstorm places they might save money such as a piggy bank, an old sock, a bank account, or even give to their parent to save for them. Put these suggestions into a grid. What s important about deciding where to keep your money? Will it be safe? Is it easily accessible? Will it grow? Put these criteria along the top of the grid. Place check marks for positive responses and x s for negative responses in the grid. Weigh the best location for students to keep their money. Piggy bank Give to parent Bank account In an old sock safe easily accessible grow Prompt students to locate the Saving & Sharing section of their Entrepreneur Workbook. Read aloud the benefits of starting a savings account. Ask students to describe in their own words at least two reasons someone should start a savings account. Check for understanding by ensuring students grasp the concepts of a savings account generating interest on money, providing a safe place for money and storing money so that next year they can be their own investor for Lemonade Day. Ask students to complete the first sentence in the box in the Saving & Sharing section of their Entrepreneur Workbook with the amount they plan to save. Ask students to describe in their own words, Why do you think a community (the place you live) is better when people give back and help others? Ask students to complete the questions in the box related to giving and then complete the sentence with the amount and organization(s) where they plan to donate. Ensure students complete and submit the online Business Results Form located on your city s Lemonade Day website. This will provide them with a chance to win cool prizes. 24