5 Steps to Start a School-based Enterprise

October 1, 2022

School-based enterprises (SBEs) are effective educational tools to prepare students for college and career readiness. For many students, their work in an SBE is their first work experience; for others, it is an opportunity to build management, supervision and leadership skills. An SBE can be an essential part of the curriculum since the enterprise's primary function is to be an educational lab where marketing, finance, hospitality, business management, and entrepreneurial curriculums are put into practice.

Are you ready to get started? Follow these five steps to bring an SBE to your school.

1. CONDUCT MARKET RESEARCH

Market research blends consumer behavior and economic trends to confirm and improve your business idea. It is crucial to understand your consumer base from the outset. Market research lets you reduce risks even while your business is still just a gleam in your eye. Gather demographic information to better understand opportunities and limitations for gaining customers. This could include population data on age, wealth, family, interests, or anything else that is relevant for your business.

Then answer these questions to get a good sense of your market.

  • Demand – Is there a desire for your product or service?
  • Market Size – How many people would be interested in your offering?
  • Economic Indicators – What is the income range and employment rate?
  • Location – Where do your customers live and where can your business reach?
  • Market Saturation – How many similar options are already available to consumers?
  • Pricing – What do potential customers pay for these alternatives?

You will also want to keep up with the latest small business trends. It is important to gain a sense of the specific market share that will impact your profits. You can do market research using existing sources or research yourself and go direct to consumers (students at your school).

Existing sources can save you a lot of time and energy, but the information might not be as specific to your audience as you would like. Use it to answer general and quantifiable questions, like industry trends, demographics, and household incomes. Check online or start with our list of market research resources.

Asking consumers yourself can give you a nuanced understanding of your specific target audience. But, direct research can be time-consuming and expensive. Use it to answer questions about your particular business or customers, like reactions to your logo, improvements you could make to the buying experience, and where customers might go instead of your business.

Here are a few methods you can use to do direct research:

  • Surveys
  • Questionnaires
  • Focus groups
  • In-depth interviews

2. CREATE A BUSINESS PLAN

An effective business plan will give you a "sneak preview" of your venture's potential success. A realistic business plan will give you and your students great insight into your school-based enterprise's future success.

A business plan is a written document that clearly defines a business's goals and outlines the methods for achieving them. The business plan describes what a business does, how it will be done, who has to do it, where it will be done, why it is being done and when it has to be done. Most importantly, the business plan will tell you if your ideas make sound fiscal sense.

Below is an outline for a start-up business plan.

  1. Executive Summary – One-page summary of the business model
  2. Problem – List the top three problems your product/service is addressing
  3. Customer Segments – Who are the target customers?
  4. Unique Value Proposition – What is the single, clear, compelling message stating why your product/service is different and worth buying?
  5. Solutions – What are the top three features of your product/service?
  6. Channels – What are the pathways to customers?
  7. Revenue Streams – What is the revenue model and what are the lifetime values? What is the revenue and the gross margin?
  8. Cost Structure – What are the customer acquisition costs, distribution costs, human resources costs and other additional costs?
  9. Key Metrics – What are the key activities that must be measured?
  10. Competitive Advantage – What about your product/service means that it cannot be easily copied or bought?
  11. Conclusion – Specific request for financing, summary of key points supporting the financial request
  12. Bibliography
  13. Appendix – An appendix is optional. Include exhibits appropriate for the written entry, but not important enough to include in the body. These might consist of sample questionnaires used, letters sent and received, general background data, or minutes of meetings.

Creating a business plan offers numerous and unlimited ventures for use in your classroom. Connect to DECA's guiding principle of applying learning to provide meaningful and realistic educational opportunities. Related activities are virtually endless for the creative teacher as each topic in the business plan offers numerous assignments and will give a chance to apply learning for your students.

3. GET SCHOOL SUPPORT

Your business plan will help you figure out how much money you will need to start your business. If you do not have that amount on hand, you'll need to either raise or borrow the capital. Use the steps below to request support and funds from your school administration.

  1. Identify the purpose and goals of the school-based enterprise.
  2. Share your business plan.
  3. Identify the ideal SBE location.
  4. Share a breakdown of your start-up costs, including equipment, product and any refurbishing the identified location may need.
  5. Identify your accounting system and bookkeeping procedures.
  6. Discuss how revenues will be used.
  7. Address store security concerns and precautions.
  8. Identify the organizational structure and employee responsibilities.
  9. Share employee training plans.
  10. Share your proposed timeline for opening the SBE.

4. Apply for Licenses

Business activities that are commonly regulated locally include restaurants, retail and vending machines. Some licenses and permits expire after a set period of time. Keep track of when you need to renew them — it is often easier to renew than apply for a new one.

You will have to research your state, county, and city regulations. Industry requirements often vary by state. Visit your state's website to find out which permits and licenses you need. You will need to work closely with your administration to determine policies, procedures and guidelines for your district/school, especially for SBES focusing on food operations.

5. CONNECT TO AN ADVISORY COMMITTEE

An advisory committee should provide the school-based enterprise will realistic suggestions as to the store policies, procedures, equipment, and facility needs and usage. Their input on how to provide the best possible learning experience for students would be provided through their expertise and knowledge. The advisory committee for your SBE could also connect to an established school advisory committee for your program.

Congratulations, now you are ready to open your doors!

For more detailed information, this comprehensive guide for managing an SBE covers all facets of starting and managing a school-based enterprise. Whether you are already operating an SBE, or are considering implementing one in your school, this guide covers all the key topics vital to the success of an SBE, such as writing the business plan, holding job interviews, establishing operating policies and procedures, etc. Utilizing this guide will help build a solid framework for opening an SBE learning lab or will help existing SBEs refine their procedures to ensure the continued success of the SBE not only as a business but also a relevant extension of classroom instruction.

Questions?

Debbie Taylor
Leadership Specialist
debbie@deca.org

As DECA’s leadership specialist, Debbie implements a comprehensive student leadership program for both the high school and college divisions. She is responsible for the Emerging Leader Series, executive officer teams and elections, and student recognition programs like the Collegiate DECA Leadership Passport Program and DECA Emerging Leader Honor Award. Debbie has worked for DECA since 2019.

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