This past weekend I have the great opportunity to help my boys (Jack - 8 & Davis - 5) get their first real exposure to Free Enterprise. And as a regular volunteer for Junior Achievement, I have a particular passion for teaching kids about business & capitalism.
The kids set-up a 'shop' in the front yard of our house where Jack and one of his 3rd grade buddies sold pencil grips and Davis sold baggies of nuts. Jack had secured his products at little to no cost through trades at school and he made signs for the shop from items around the house - so there was very little start-up capital needed (nice!). We bought Davis some nuts in bulk & transferred them to ziplocs - so he also had a nice little margin. They also did a great job of having varying price points for their products ranging from 50 cents to a dollar.
Then they scoured the neighborhood for clients (ala other kids) & have a steady stream of clients running home to get some money & spend it in the shop. I sat back on the porch to read a book & let them have at it (mistake). When all was said & done, Jack & his buddy made over $25 & Davis made a couple of bucks. Then it went downhill for Jack & his friend.
Turns out most of their clients were kids in the 4-7 range that had no concept of the value of money - so they would pay $5 for a 25 cent pencil grip & not ask for any change (even when offered). As a result, Jack & his friend made a killing on these little guys. And therein was the lesson - great job on the basics of capitalism - buy low, sell high at what the market will bear ... but taking advantage of those not capable of making an educated decision needs a bit of work.
So we returned some of the money to the kids who were clueless & offered to give additional product to some others. Great lesson though and that is what the lemonade stands of the world are for - teaching my kids the power (and danger) of Free Enterprise and the importance of Ethics.
Great job boys!
Nice job Mark, looks like they (and you) learned a great lesson!
Posted by: John Cole Scott | November 25, 2009 at 09:07 AM