My girls are budding entrepreneurs. Since she was three
years old, Briana has been telling me that she is going to open a boutique and
be a designer, and she named her store Boutique Girls. She is now 7, but has
not forgotten this dream. We’ve been through at least 5 logo changes, from all
of the letters in balloons to the current logo below. And now Abigail wants in
on the fun. She wants to be a confectioner.
Briana and I regularly have little debates about aspects of
her store: Girls clothes only or boys too? Accessories? Online sales or not?
Color of décor? Location (she says Paris or New York, I say close to home J)? We even spent a
whole night talking about the kind of lighting she wanted once. But lately her
favorite thing to talk about is pricing.
She is learning about coins and value at school and has come
to realize that pricing and making actual money is a part of being a designer.
This has led to some awesome conversations and a lot more awareness when we go
shopping.
This week she tells me that she wants to start Boutique
Girls with scarf sales this winter because it’s so cold out. She wants to sell
her scarves at home and at school for $20 per scarf because her hooded scarf
from Justice was $25 and hers won’t have hats attached. I tell her that she
needs to sell them for a quarter or $0.50 because she is seven and not a big
store, and she counters that if she sells her products for a low price now, no
one will pay big dollars for her couture gowns later. Clearly she’s given this
some thought.
I start to explain to her about the value equation and how
pricing works, using her newfound love of the calculator to prove that
sometimes charging $1000 and having 1 person buy ($1000 total sales) makes you
less money than charging $500 and having 5 people buy ($2500 total sales).
Briana wants to see if cheaper prices and more people always makes the most
money, so I let her pick the next one - $100 and 10 people, which makes $1000,
less than charging more and getting fewer people. We did 15 people buying $50
dresses and got $750 in total sales and Bree is fascinated by the bell curve as
we plot it out on scrap paper. I explain that the top of the curve is the sweet
spot and that’s what you want to sell at (for the most part. There are a lot of
nuances that we are going to overlook today for the sake of simplicity and
fun.)
“How do you know how many people will buy at each price to
decide?”
“Market research,” I tell her.
“Then that’s what we’ll do!” She decides.
Why not.
I get on Facebook and ask my buddies if they’d be willing to
do a quick survey for my kiddies and we get enough yes’s to decide to spend the
next day writing a survey.
The girls draft their surveys on paper and then we take to
the computer (mostly for time’s sake, vs. writing out a bunch of surveys and
mailing them).
Surveymonkey.com is a site that lets you create free surveys
and send them. It also collects the data and gives you a little report. It’s
really easy and fun to use.
Here’s Abby typing out her questions.
And here’s our short survey the kids wrote (online it is
interactive with pricing charts and selections, but if you don’t pay to upgrade
you can’t print so here’s just the text):
Boutique Girls & Abby's Sweet Shop Pricing
Welcome to My Survey
Welcome to the Boutique
Girls and Abby's Sweet Shop survey. Thank
you for helping me.
1. Are you a....
Kid
Teenager
Grown-up
Grandparent
2. What would you buy at
Boutique Girls from a 7 1/2 year old
who TAKES HER TIME? (Select
all that you like.)
Dresses
Scarves
Hair bows
Bowties
Headband
Skirts
All of the above
3. How much would you pay? (Click all
the prices that you would
pay.)
4. Is there anything else that you
think I should make?
5. Are you willing to get sweets made
by a 5 3/4 year old?
Yes
No
Maybe
On another day
6. Which sweet would you like to buy?
(Please choose all of the
ones that you would buy.)
Slushies
Smoothies
Milkshakes
Candy
Easy Bake Oven Cookies and Cream
7. How much would you pay? Please
select all of the amounts
that you would pay.
What is your gender?
SurveyMonkey Certified
Female
Male
Thank you!
Thank you for helping us!
When the data comes pouring in from 40 of my awesome
friends, we get out our calculators for some multiplication. First we pick what
two or three things people were most likely to buy based on the data. Then we
multiply the number of people who select each price point by the price to see
what our profit would be at each price point for our best sellers (again, yes,
we didn’t factor in production costs, etc. to really calculate profit, but it
gives the kids some calculator practice and an understanding that sales are
determined by price and volume sold). Then we chart the results.
The kids are fascinated by Excel, especially since I build
the charts first with empty data sets so they are blank. As the girls do their
multiplication and input the values, the chart grows before their eyes.
We discover that we should have gone higher than $2 for Abby
to see where the pricing sweet spot would be for her Sweet Shop. We were using the $0.25/cup
lemonade stand as a basis, but it turns out that smoothies, milkshakes, and
slushies all have a lot more value to our friends than a lemonade would. I told the kids to pick one price much lower than they thought people would pay and one price much higher for their surveys.
Abby says that even though smoothies and candy are her best
sellers, she definitely wants slushies and her Easy Bake Oven Cookies and Cream
(essentially a cookie whoopie pie) on her menu too. I tell her that the owner
has to trust their intuition, and maybe her slushies and cookies will be so
good that they’ll get good word of mouth to drive the volume up even though the
concept didn’t make people want them.
I learn that my friends are quite generous. Four people actually said they’d pay
$200 for a dress made by my 7 year old. Maybe I’d better get her to turn her
planning into a real business. Kidding! I’m not quite getting into the sweat
shop business. Getting homework done every night is trouble enough. I also learn that my kids can spend a significant amount of time getting the colors and look of their charts just how they want them.
Briana gets to see that scarves would be her overall best
sellers by a significant amount and she is so proud that she was “totally right
about that.” $10 for scarves and headbands, and $5 for hair bows gives her the
best chance to maximize profit. She runs out of the office saying that she
needs to get started on her scarf designs.
Briana is also really excited with the answers to what else
she could make (hours later, after scarf planning). It hadn’t occurred to her
that she could make fabric covered notebooks and she wants to try. She also
likes the leg warmer suggestion because she knows how to make sleeves and
leggings and thinks that leg warmers shouldn’t be too hard. Right now she’s
working with her sewing teacher on a tankini, but she’s going to
ask to be taught how to make socks, leg warmers, or pajamas next. She also had never thought of making men's handkerchiefs like tiny scarves.
All told, the kids loved learning about surveys and
data-based decision making. They loved Mommy’s T1-85s (calculators, because I’m
a packrat and kept them all), Microsoft Excel and its color changing charts,
and playing on surveymonkey.com even more.
Business saavy with things like pricing and marketing is a
great skill and one that is often overlooked until the kids are old enough to
execute viable business plans. I think that letting your kids conceptualize a
business based on their passions before it’s all about making money is
important. That way they learn to think about all of the little details they’d
love to have (and most importantly, have fun dreaming) before they find out
that a private dressing room with light up runway for every client is probably
going to be cost prohibitive, and having Abby’s Sweet Shop in the middle of
Boutique Girls is going to result in a lot of ruined clothing.
Hope you have a day filled with good, informed decision
making!
<3 Pedigreed Housewife
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