The reality of retail can be an eye-opening experience and some senior students at the Estevan Comprehensive School who are engaged in the entrepreneurial program are getting a good dose of it these days. They are really embracing it, only after suffering a few casualties along the way.
Educator Josh LeBlanc is providing the lessons, the team has engaged a mentor, developed a product, conducted a market research program and had tied into the actual promotion and marketing of their four Edible Elegance products in late November.
They're not using play money, either. They gathered their start-up funds by selling shares in their company at $50 apiece and kept that right in their own family.
The 14 students engaged in the project formed a corporate structure that features one president and five vice-presidents.
Their business background research led them to the Junior Achievement program that gave them some vital business and financial literacy advice and provided them with a business mentor through the Venture Program to help steer them through the various processes they will have to follow to bring the product home with a profit. A good portion of that profit will be directed to a classmate, Kurtis Herbert, who is currently engaged in a big battle with acute myeloid leukemia. The funds will help his family curb some expenses that will be involved with his future bone marrow transplant that will take place in Saskatoon, Calgary or Seattle.
"I'm here to help them deliver it," said LeBlanc, referring to the project and hopefully the profit.
"They have started this business literally from the ground up, from the original idea to the marketing and business plans and locating the investors and on to product development and sales."
Since they were a small group, the students decided to stick together as one team rather than branch out into two projects, so they selected the Edible Elegance concept that offers customers choices among sand art brownies, peppermint hot cocoa, holiday cookies and their own cappuccino. Of course customers can go for the whole hamper of goodies, or select any one or two of the products that are all priced at $10 each.
The products, contained in jars, require simple mixing, heating and then consumption. Product quality is assured since the classmates prepare it themselves in the ECS commercial kitchen under the guidance of culinary chef/teacher Curtis Hack.
"The class developed a brochure to help them with sales, did some advertising within the budget and they've developed a website to make ordering more efficient and they have canvassed the city, doing some door-to-door sales," said LeBlanc.
One snag the sales teams didn't count on came to light when they learned that a couple of young people were engaged in a potential fundraising scam, supposedly gathering funds for Herbert too on a door-to-door basis, selling themselves as being ECS students trying to help a fellow classmate.
Estevan Police Service managed to swoop in and end the scam that did not involve the selling of any product, but the scammers may have put a crimp in the legitimate project. Even with that unfortunate element involved, the door-to-door campaign resulted in 700 to 750 units being sold, about 40 to 50 per cent of the target of 1,500 sales.
The team's second sales blitz was going to involve family and friends and would then conclude with sales to ECS students. In the meantime, online promotions and sales would be moving forward. To boost sales the class was also slated to attend the Santa Breakfast party at the Estevan Shoppers Mall last Saturday.
Christina Freitag, the president of the operation, said she felt there wasn't going to be a huge challenge in keeping the whole team motivated right to the end (Dec. 12) to which Hannah Musselman agreed.
LeBlanc said that all the students involved are in Grade 12.
"We had one Grade 11 student at the start. We had 20 students at the start, but for their own reasons, a few dropped out early but this class here is motivated," LeBlanc said, adding that he was happy to see the class devote some time, attention and money to a worthwhile social cause to help a classmate. He pointed out, in the real world of retail, donations become a part of the reality mix too and Herbert was an ECS team member.
Jayden Schindel, vice-president of marketing, said the sales were good for all four products and the less popular item, was, by chance, the least profitable too. He said most of the purchasers went for just one or two items, not the whole hamper. The holiday cookies, he said, were the most costly to produce but that would not change their marketing strategy.
Aleksandra Granchar and Kellan George and a few others noted that "getting the promotional pitch we used at the doors," down pat was challenging at first.
The students said they started the project shortly after the new semester began and they started the actual sales around Nov. 23, a prime time for holiday season marketing.
Elija, who was the logistical and technical website guru, said that with some potential sites blocked, the website marketing aspect of the program was hampered since the school could only offer a limited free zone in which to pump the products. "But I'm finding out where the right stuff is," he said in true computer wizard style.
LeBlanc said he removed himself from the hands-on experience so "it's up to them to keep it moving forward. They were to have 100 class hours devoted to this. They've put in 20 to 25 more hours than that so there is some fatigue factor. It's hard for them to stay up on it in the early morning," he said with a laugh.
The class split themselves into three teams to cover the city for the sales blitz and a few have decided that rolling the sales out to nearby communities might net a few more sales without badly damaging the bottom line on the expense side. They have even discussed commissioned sales as a tool to reach their sales target. After some thorough discussion about the implications associated with commission sales, they vetoed the idea. But incentive packages were introduced with the top sales team being rewarded with a pizza party while the best sales person will pick up an iPod.
The students noted they track sales, product production and movement online using a solid database.
The venture capital came from those aforementioned $50 shares.
"We kept the shares within the company itself," one of the participants said. Those who didn't have the money upfront secured loans and those loans are now paid off with the exception of one who still had $20 outstanding. The overall profit margin could get to 50 per cent, they said with $1 from each sale being donated to the Herbert family.
The students also called on another partner, the Community Futures team in southeast Saskatchewan to receive some customer service training.
"They've been invited to attend the Chamber of Commerce meeting in Regina on Dec. 6 to pitch their product. That could be interesting," said LeBlanc.
On the local front, the jars of Edible Elegance can be found at Franks on Fourth and Streetwear.
When the group was asked how many had changed their minds about retail businesses and would maybe like to pursue it as a career choice, four hands immediately shot up while another half-dozen voices chirped in that retail would be a great option following some university or other post-secondary education.
"I believe this has been a good experience for them, it's fun on several levels and it's hands on," said LeBlanc. "If they get to 1,000 or 1,200 in sales, it will be seen as a successful (profitable) venture and 1,500 would be pretty impressive."
