“One dollar! One dollar!” exclaims my daughter as she tries to sell her wares to my staff from the shop set her grandma gave her today.
She must have learned selling from Ryan’s Toy Review. Either that, or one dollar is too cheap a price for legitimate wares.
Another Mommy asked how to teach kids entrepreneurship a few days before.
My father was an entrepreneur.
My mother was an entrepreneur.
And I later grew up to be an entrepreneur as well.
I don’t really remember my parents actively teaching me how to be an entrepreneur.
So how the heck did I turn out to be one?
It’s the Littlest Most Mundane Details
My father used to teach me about entrepreneurship without me knowing it.
We would go to a restaurant, and we would analyze if this restaurant was profitable or not.
“How many staff are there at the store?” he would ask.
“There’s ten,” I’d answer. And would proceed to count them one by one.
“Good,” he would reply. “If each employee cost php 13,500, how much would the total labor cost be?”
“₱13,500 times ten is php ₱135,000.” The middle school me would answer, pleased that my multiplication tables can now be used.
He continues to ask, “Let’s say rent and overhead which includes electricity is php 60,000, how much is the total cost of running this business?”
“₱135,000 plus ₱60,000 equals php 195,000.” I would answer. This is easier math.
“So let’s say cost of doing business is rounded up to php200,000, how many meals do you need to sell to break even?” He asked.
“What do you mean?” I asked, now confused.
“Okay, how much is the price per meal?” He would then ask.
“It’s php 100,” I would answer. “And there’s four of us so that’s php 400 for our table, more or less.”
“Now, if the cost of the food is php 30 per order, that means per meal has php 70 of profit,” he concludes. “If you make php 70 per meal, how many meals do you sell to break even?”
Ahhhhhh…. see the point?
“Cost of business is php 200,000. Divide php 200,000 by php 70 profit per meal, how many meals is that?” He asked.
“2858 meals!” I excitedly answer.
“Now divide 2858 meals by 30 days, how many meals must be sold per day to break even?”
“95 to 96 meals a day, daddy,” I answered.
“Or 50 meals per lunch and dinner,” he would say. “Or around 10 to 15 tables per meal hour. Look around you. Is this restaurant full? How many diners are here on a weekday lunch?”
There was only 4 tables dining. Two had two people, one was a sole diner and there was us, 4 on a table — or 7 people in total.
“The restaurant isnt making money,” he concluded. “It will close down in a few months unless they change something. Anything.”
“How sure are you, daddy?” I asked.
“Do the math,” he said. “And you will know.”
Sure enough, the business DID close down.
It was tragic to see.
I am sure that the owners were well intentioned and had high hopes and dreams when they opened the store, but you can’t fight against the tide if the numbers were against you.
And that was how my dad taught me about entrepreneurship.
Not by reading a book or taking a class.
But by analyzing every business that we come in.
Every single day.
My daughter is only 3 and there’s still more to teach her.
Right now, she’s just selling things for one dollar. Tomorrow, hopefully she’ll be selling more at a profit.
Teaching about entrepreneurship is like building the pink towerZ
You talk to her everday about the most mundane things, and build it up, until years later, without her really knowing it, she inevitably becomes an entrepreneur.
Because this was what her parents did.
Because this was something you guys talked about every day.
Because this was her training.
Because this training became her calling.
And that is how you raise an entrepreneur.
One day at a time.