Though you've probably heard about the saga of Smokey Rabbitson and the changes that have been happening with our beloved class bunny, I will briefly recap for those who have not. In short, I took Smokey to the vet for his first check up, only to find out the he is in fact a she. Not only is he a she, but also she needs to be spayed. Apparently spaying is essential to a pet living a long, healthy life. Given that I was told by Smokey's previous owner that he was a he and that he had been neutered, this came as quite shock.
A few weeks before this, I attended a conference at Purdue to learn how to start and operate a profitable classroom business. With all of that training floating around in my mind, this Smokey thing was a perfect "in." So I sat down with the 3rd graders, introduced them to Mrs. Smokey Rabbitson, and discussed our need to come up with the funds for her surgery. This began our journey into business-hood, which I will try to recount for you as we progress.
Step 1: Choose a Product
After much searching and brainstorming, I found these cute bracelets here. These bracelets are a particularly appealing product for a few different reasons: they can be customized for boys, girls, kids, and adults alike; they are simple to create, but do require multiple steps; and the materials are inexpensive and easy to find.
Step 2: Choose a Price
You may be wondering why choosing a price would be so important before we have even made a single bracelet. For us, we needed to know the price in order to project profits so that we could write a business proposal to present to the PTO for a loan! That's right -- a loan. Smokey needed her surgery ASAP, so we needed the money up front. We'll get into the details of the loan process a bit later.
As for determining a price, we decided to conduct a market survey. Each student was assigned a grade level to survey.
After each class was surveyed, we worked together to collate our data and find totals. The students first had to find the totals on their own survey.
Then, they were put into groups of 3 and given base-10 blocks to find the total number of bracelets that we would sell at each price point. Once they had those numbers, they used their budding understanding of multiplication to figure out how much money we would make at each price point. This of course led beautifully into a discussion of "profit," where we then had to subtract our estimated cost of materials.
After all of this hard work, we finally had 3 projected profits for 3 different prices. Predictably, the numbers showed that we would make the most money if we sold them for $5 each and the least money if we sold them for $2 each. Like all good business partners do, we sat together and discussed what the best decision would be for our business. Everyone got a chance to speak, and ultimately it was decided that selling them for $2 would be too risky because we would need to make and sell so many, but that selling them for $5 would also be too risky because people may not actually want to spend that much. So we settled on a price of $3 per bracelet, hoping that our customers will buy close to the amount they said they would when they were surveyed.
Alright, so at this point, we have fulfilled step 2. We have our price. Check back soon to find out what happens next in our journey to business-hood!
Little people, big minds.