Financial Literacy #2: Entrepreneurship

Socratic Intro

  1. What is a business?
    1. [await answers]
      A business is a good or service that seeks to make a profit by improving people's lives.
  1. What are some things you have enjoyed or relied on in the past day and were they a good or service?
    1. [await answers]
Most jobs work for a business. You can join someone else's business and help make run or even grow it.
  1. Let’s start our own business. What shall we create?
    1. [narrow kids suggestions to 2 business for them to vote on which we choose (lemonade stand, soccer club, YouTube streamer)]

Lead a roleplay of the chosen business

Starting up
  • List and discuss startup costs
  • How to fund the costs before you start earning money
  • Variable costs
  • Gross margin
  • Revenue = gross margin x volume
Net Profit
  • Gross revenue - fixed costs
  • Deducting financing costs
  • Income per owner

The underlying advantage of being an owner vs employee

How income scales with hours for employees vs volume for owners
$20 per hr
COGS that scale with customers
Fixed cost
Profit per hour plotted vs volume
notion image
notion image


Other concepts:

  • Fuzzy distinctions: Jobs and ownership very in responsibility/creativity/and autonomy (owning a franchise is like a job and some jobs are like being an owner)
  • The innovation of limited liability and limited partners — most you can lose is your starting capital and your time
  • Different types of business models
    • B to C vs B to B
  • Do all business make a profit? (No, Khan Academy…but still needs to cover costs)


Lead Into Session III

Investing: Separating savings for a rainy day vs long-term savings
How to treat each of those 2 buckets