Why I Donated $5,500 To Fund 11 Middle School Business Plans
I’m a little worried.
I think Maria is gonna be pissed at me (again).
See, the donation to Clairbourn School to fund viable business plans for 6th, 7th, & 8th graders was suppose to be a couple grand. Not 5,500 buck-a-roos.
But, what was I suppose to do? Stiff the little kids?
My deal was this: If a 6th, 7th, or 8th grader could dream of a business that they could actually pull off with no more than $500 in seed money, I’d fund it.
And damnit, those little kids blew my mind. They ALL pulled off what I thought was impossible: creating viable business plans. 11 students @ $500.00 each = $5,500.00 donation.
Actually, some of the projects are pretty cool. I’ll share the better ones with you.
But, let me tell you, it damn near killed me to write that check. And once Maria finds out about it, she’ll finish me off.
Allow me to explain how I got myself into this situation.
The Death Threat That Got Me To
Rethink My Priorities
It all started June 21, 2008.
A Korean nightclub owner was threatening to kill me. And I remember thinking, “God, if I get out of this, I won’t waste the opportunity.”
A couple months prior to that fateful night I had started a VIP Entertainment company that got clients backstage passes and access to really cool events like the Oscars.
But, a bad deal here, a bad vendor there, not enough funding, and a couple of lawsuits later, I was broke. Actually, I was WAY beyond broke. I owed a couple hundred grand to various people. Including the $1,500 to the Korean nightclub owner.
I remember thinking at the time, “My life is only worth $1,500?”
Kinda depressing to think your life is only worth $1,500. Especially when my parents paid over $150,000 for me to graduate USC.
And then I lost my relationship with my best friend “Ric”.
At least that was over $8,000 a deal. Personally, I valued our 16 year relationship around a couple million. But, he only valued it at $8,000.
And losing valuable stuff didn’t end there. I lost my car, lost all my bank accounts, and I almost lost my wife’s wedding ring because we pawned it.
Like I said, kinda a depressing time.
The Obsession To Get It
Right The Next Time
If you’ve ever lost something really valuable, you too probably obsessed over every single detail, every single messed up decision. I did!
Every single second I had to ride the bus to work…Every single time I had to write a check to somebody I owed money to… Every time I got served by the Sheriff…
I thought about the hundreds of mistakes I made. I really beat myself up.
As I replayed every stupid decision I made, a line kept cycling in my head,“God, if I get out of this, I won’t waste the opportunity.”
I had to wait 3 ½ years for the next opportunity.
A Chance To The Right Thing
When I bought my Dad’s accounting practice a couple of years ago I made decision that decision that Charity would be a critical component of what we’re about.
My thinking goes like this: Charity is one of the few things that has permanence to it. Money comes and goes. Friends come and go. Health comes and goes. But good deeds last forever.
Plus, I wanted our firm to be about doing something good for the community.
Because trust me, working 80 hour work weeks is rarely fulfilling, even if the money is great. But, the thought that a portion of the money goes to a good purpose makes the work easier to do.
So a couple of years ago I came up with:
5/3/2 is our commitment to offer 10% of our GROSS income for charitable purposes.
5% of our GROSS income is allocated to our client education, 3% of time is donated to 501(C)(3) organizations, & 2% allocated to inspiring children with entrepreneurial values.
Doing newsletters, seminars, interviews costs a lot of money. A lot. But once you get past the emotional hurdle of paying the tens of thousands of dollars to pull it all off, it’s doable.
And with thousands of great charities out there, finding one to donate your time is also pretty easy to do.
But finding a viable way to inspire children with entrepreneurial values proved to really difficult.
Before Clairbourn agreed to this grand experiment, I had contacted Flintridge Prep.
The pitch was simple: offer seed money to kids to fund their business plans so long as they were viable.
I immediately got rejected. Heck, I didn’t even get a meeting with Prep’s headmaster Peter Bachmann. Nor their business development director. Just a lame email.
They didn’t like the idea of a “restricted use donation”.
But there is one man with vision: Dr. Robert Nafie, the headmaster for Clairbourn.
The Backstory on How the
Entrepreneurship Elective Was Created
I guess being the former Student Body President of Clairbourn earned me a 5 minute teleconference with Dr. Nafie in November 2012. Plus, the promise of donating some cash didn’t hurt either.
As we’re talking it became apparent Dr. Nafie had grander ideas I ever dreamed: offering an entrepreneurship elective for 6th, 7th, & 8th graders.
As I’m saying, “That’s a brilliant idea”, I’m thinking in my head, “Crap, that’s work.”
We left that meeting agreeing I would submit a proposal for him to review. Which I did.
And get this, Dr. Nafie was like, “We should do this during the 3rd or 4th quarter”. Translation, this class would be during the tax season. With my wife due right around the start of class.
But, if I wanted this class to actually happen, I just had suck it up.
Anyway, Dr. Nafie’s teleconference lead to an in-house meeting with Amy Patzlaff (middle school director) & Chris Guyer (who would teach the class).
I remember going to that 2nd meeting. As I was pitching them, I was noticing their facial reactions: a mixture of amusement, skepticism, & excitement.
But, they were at least considering it. Dr. Nafie, Amy, & Chris all had to be on board for this happen. A “No” by any of them would have killed the project.
Then a couple months go by. One day I get an email from Chris Guyer with a proposed outline of the class. I immediately notice the first day of class is April 3rd. At least it’s not April 15th.
But, what the heck. I’m the guy who was survived a complete financial meltdown; survived some idiots trying to kill me. I can handle this, right?
Then Maria gives birth to our son Ethan on March 30.
So, in the midst of tax season & Maria giving birth, I somehow drag my ass to class on April 3rd.
What the Students Have To Do
to Qualify for the $500 Seed Money
The goal of this elective is simple: get the kids to come up with viable product/service to sell with only $500 in seed money, that they could actually do during the summer.
Getting to that goal…not so simple.
But Chris Guyer did a masterful job in guiding these kids in creating viable business plans. And yes, I somehow managed to squeeze enough time to teach three classes all by myself.
In order to determine the viability of the kids projects, I came up with following format all the kids to answer.
- Concept Statement: What Are You About
- Easy to “get”
- USP= what’s special about your business
- Target Client: What do they look like, smell like, like to do
- Yearly Income Range
- Home ZIP
- Where do they buy groceries
- Where do they go out to eat
- Where do they go to vacation
- What are their hobbies
- What magazines do they read
- What last 3 books did they read
- What 5 websites do they go to everyday
- Market Demand: Do People Want Your Stuff
- General Research
- Letters of Commitment to Buy
- Sales Funnel: From “Hello” To “Cash or Check”
- How will you attract clients
- What is your sales process
- What is your follow-up system with leads
- Joint Ventures
- Marketing Material
- Payment methods
- Revenue Model: Ways you make money
- Single Transaction
- Continuity (yearly, monthly, weekly, daily)
- Affiliates Leads
- Down Sells
- Profitability: Will You make Money
- Cost to acquire a client
- Cost to produce
- LifeTime Value of a Client
- Sales Price
- Legal Stuff: Are you allowed to do your thing
- What federal regs are there to produce good or service
- What state regs are there to produce good or service
- What city regs are there to produce good or service
- Operations Management: The Machine
- How will you produce your good or service
- How much time will it take to produce good or service
- What is the process of getting good/service to client
- Distribution Channels
- Start-Up Capital: How much money do you need
- Amount of money you need till first sale
- Amount of money needed to break even each month
- Amount of money you need to break even for start-up capital
- Overall Viability: Will This Work
- Can YOU produce good or service by yourself with current resources
- Can YOU market good or service by yourself
- Can you get this with your start-up capital
- Can you do this with your current school and outside of class stuff
- Can you do this within 6 months
The Process is the Point
In fairness to the truth, the breadth and depth each student filled out the questionnaire varied greatly. In fact, some of them sucked.
But, to be honest with you, whether or not these plans become profitable isn’t the point. What is important is the kids go through the process of creating. Asking the right questions. Being challenged. Getting frustrated…then overcoming it. And most importantly, doing the plan.
Through experience, I can tell you that no matter the amount of “school learning” about business, it’s not until you do something that any of it matters. Because when you or I get an idea, we think it’s awesome. We fall in love with our idea. And spite of every imaginable possible rational reason to stop, our lizard brain blinds us into thinking, “I can do it”. Only experience can help us discern when an idea is worth pursuing, or letting go.
That’s part of the reason why I limited the seed money to $500. I wanted the scope to be reasonable for a 6th, 7th, & 8th grader to actually do. I find that when the limiting factors are reasonable, it makes the process of coming up with a viable product a lot HARDER. Why? Because dealing with reality is tough.
The Best Business Concepts
In a class of 11 students, 4 of them are worth talking about.
One girl is going into the business of making protein bars for athletic events. I think she has a real shot because she already makes them for herself with her Dad’s help. In other words, she knows the actual process of making them. Plus, since she makes them herself with natural ingredients without preservatives, they truly are healthier than the bars you get at the store that need to last a couple of months before they’ll be eaten. And lastly, since she does a lot of sports (and is popular too), she has people to sell her bars to.
Another girl is going to delivery Chinese Newspapers. In her research she found that many Chinese newspapers don’t deliver like say the L.A. Times. And despite a huge movement of English written newspaper to offline consumption, there is still strong demand for a hard Chinese newspapers. I think she has a shot at this because she has a fairly large family and friend network that wants to get the newspaper. And her parents seem willing to drive her around to deliver the newspapers.
The youngest boy in the class is allergic to just about everything known to mankind. So, his Mom bakes him gluten free cookies, which he wants to sell.
And lastly, there is a boy who is going to install solar panels on event tents so they don’t need a generator on site. I like the idea because generators are noisy, and solar panels provide enough energy to power a very small sized event.
My Hope For the Kids
Will these kids become rich manifesting their plans?
But, they will get an invaluable experience that should serve them well for the rest of their life.
And that makes me feel great.
How knows where the seeds of this class with take these kids.
Maybe they major in business as a result of this class. Maybe their business actually works. Maybe this class saves them a potential bankruptcy in the future because they learned to test the market first.
The Future of This Program
Chris & I are already talking about doing this program next school year. Having learned a lot about how to teach this class, we’re excited to make this program even better.
If you would like to donate, help, or have some ideas, please call me at 626.280.6865
I look forward to updating you on the kids progress.
Your friend in inspiring children with entrepreneurial values,
Adam C. Libman, CRTP