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"Serious Business": Teaching Entrepreneurship Skills to Youths

by Fred D. Baldwin

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It surprised people that something so big could be done by teen-agers," says Jennifer Williams, a junior at Akron East High School, in Hale County, Alabama. The project was indeed demanding: wiring the county's 95-year-old courthouse for Internet access.

The contractor on the job was NuGeneration Technologies, a firm staffed and managed by Hale County high school students. In their capacity as a work crew, they strung cable through narrow crawl spaces, in-stalled outlets, and generally had fun. After a state inspector gave their work a thumbs-up, in their capacity as management, they billed the state $3,000. Business, after all, is business.

NuGeneration Technologies is one of 20 school-based enterprises currently operating in ten rural Appalachian counties in Alabama, with additional businesses in four non-Appalachian counties. These businesses were created through an initiative called "PACERS Serious Business," whose goal is to help individuals, schools, and rural communities grow through hands-on entrepreneurship education. The program operates as part of AlabamaREAL (a member of REAL Enterprises, a national organization with headquarters in Durham, North Carolina), sponsored by the Program for Rural Services and Research at the University of Alabama with funding from the Appalachian Regional Commission's Entrepreneurship Initiative.

These programs have multiple objectives: teaching students to recognize business opportunities, encouraging participatory learning, and meeting real needs in small, rural communities. For example, many of the school-based businesses are newspapers that are the only truly local newspapers in their communities; they carry a full range of local news, not just school-related articles.

"This project," says Tommie Syx, AlabamaREAL project coordinator, "is one way of bringing resources to communities that desperately need them. Students hear the message: 'You don't necessarily have to take a job. You can make a job.' Too often our students hear the message that doors are closed. They need to hear that doors are open."

Doors in Cherokee County opened to seventh-grade and eighth-grade students at Sand Rock High School. Their business, Sand Rock FFA Greenhouse, turned a nice profit in the 2001–2002 school year, largely through the sale of about 500 pots of ferns and about 300 hanging baskets of begonias.

"Next year we'll want about 300 more ferns," says Barry Bailey, agriscience education teacher at the school. "If we can find a place to grow shrubbery, we'll consider the whole nursery business thing."

Another student-run business, One Smart Cookie at Mellow Valley High School, netted $5,000 in the 2001–2002 school year. Frozen cookie dough purchased from Otis Spunkmeyer is fresh-baked daily.

For the most part, profits from school-sponsored businesses are either reinvested in the business (for example, in needed equipment like photocopiers) or spent on special educational opportunities like field trips. But schools have flexibility to experiment. As a sales incentive, this past school year the Sand Rock FFA Greenhouse gave its student fern salespersons a commission of $2 per fern sold. Those who sold eight or more plants shared in an additional portion of the net profit.

Engaged in Their Communities

Jack Shelton, former director of the University of Alabama Program for Rural Services and Research, explains that AlabamaREAL grew out of a conviction that public education programs needed more hands-on activities and that rural communities needed to be more aggressive in local business formation.

"We just felt like we had to help schools begin to look at ways that kids could become more active learners," Shelton says, "more engaged in their communities, and more entrepreneurial. Once I saw the level of interest, the level of competence, and the range of problems, I began to consider a formal relationship with REAL."

The Appalachian Regional Commission grant provides school projects with a modest amount of start-up capital (ranging from $500 to $5,000). Funds also pay for extensive teacher training; to date, 15 instructors have participated in week-long national workshops, and more have attended regional seminars. REAL Enterprises offers program models for different grade levels that school districts adapt to their needs and capabilities.

As in the real world, student business plans may include some false starts. For example, one group of students correctly identified a local need for an oil change service but concluded that environmental regulations and other liability issues would be too hard to handle. And the Hale County students' original plan was for NuGeneration Technologies to build personal computers. They switched to repair and networking after realizing that they couldn't compete with manufacturers like Dell.

Nancy Compton, who teaches the entrepreneurial course that gave birth to NuGeneration, says she's using much of AlabamaREAL's participatory learning style in her regular classes. "My computer applications classes are structured. This is unstructured. I've had to do some adjusting. At first I didn't like it. Now I do."

Compton's students make much the same point. "It was different from all my other classes," says Shamekia Evans. "It was putting skills to work, not just getting a grade. It [a business] is not something you can just jump into. You have to talk to people and let them tell you what they want."

"Basically," says Robin Horne, another member of the NuGeneration team, "we dove into something that none of us had any experience doing and just kind of figured it out."

"We fully realize," says Victor Scott, director of secondary curriculum for Hale County schools, "that these students won't necessarily go into computer repair. But we felt that the lessons learned from starting up their own company could transfer to any business."

Laboratories for Learning Business Skills

Ann Thompson, Clay County AlabamaREAL teacher and career technical coordinator, says she considers school-based projects like NuGeneration and One Smart Cookie to be learning laboratories. Her students may learn even more from developing their business plans, which they must defend before local bankers. A few of these students turned their plans into real businesses after graduation. For example, Starr Gaither, one of Thompson's former students, says that her senior-year business plan helped her get a bank loan to open a performing-arts studio, now in its third year of operation. "I had pretty much everything laid out," Gaither says. "[The banker] looked at it and said, 'It looks like this is going to be a successful business.' " Her studio is now exceeding her high school projections, having expanded to about 130 active enrollees.

A few teachers and students make another point: except for athletics, Serious Business may be the only public school activity that creates strong incentives to learn teamwork. In "normal" academic classes, most students don't care if someone else slacks off. When the success of their business is involved, they care a lot.

Program for Rural Services and Research director Jon Chalmers believes that AlabamaREAL can also become the nucleus of community development initiatives. "Schools are already so important in the lives of their communities that it's natural for them to be a key component of community and economic development," says Chalmers. It's a realistic goal, says Steve Mariotti, president and founder of the National Foundation for Teaching Entrepreneurship. Mariotti says that learning how to write business plans, understand profit and loss statements, and capitalize on niches of comparative advantage are especially important for young people in low-income areas. "In rural areas," Mariotti says, "there are huge opportunities to use entrepreneurship and small business as a way to help the community."

Shelton comments that community leaders have too often thought that economic development occurs only when outside capital moves in, rather than when local businesses grow. By contrast, the students in Clay County are expanding by studying their own market. They've just added Slush Puppies to their product line, and Thompson is encouraging them to produce business plans based on Clay County's largely untapped potential for outdoor recreation enterprises. "Other people come and see what we have," she says. "We don't see what's in front of us."

The opposite of that is what Mariotti calls "opportunity recognition." "A lot of people," he says, "forget that the entrepreneurial process is a creative one, like an artist's. Entrepreneurs are providing goods and services that other people need. Aside from creating wealth, every transaction raises the quality of living, self-esteem, and sense of purpose."

Or, as the business slogan coined by the students who run One Smart Cookie puts it: "You can't be a smart cookie with a crummy attitude." Not much danger of crummy attitudes among any of the participants in AlabamaREAL. Ultimately, all of Alabama's fledgling entrepreneurs are learning the business of opportunity recognition, and that promises a big payoff for them and for their communities.

Fred D. Baldwin is a freelance writer based in Carlisle, Pennsylvania.