Name: ____________________________ Date: ______________ Period: ______
Team: ____________________ My role: CEO / CFO / CMO
Unit 7, Lesson 7.8. Page 1 is the customer work. Page 2 is the money. Calculators for everybody, all period, no permission needed.
Page 1: The customer
What we think we know (fill this in BEFORE you ask anybody)
This is the before picture. At least one of these three lines will turn out wrong. That is the point.
| Our guess | |
|---|---|
| Who is our customer? | |
| What will they pay? | $ |
| What do they do about this problem right now? |
The customer profile: five specifics
"Everybody" is not a customer. Everybody is what you say when you have not asked anybody.
| # | Specific | Ours |
|---|---|---|
| 1 | Who? (a role, not a name: a parent, a grade 6 student, a coach, a neighbor) | |
| 2 | Age or stage of life? | |
| 3 | What do they already do about this problem? (this is your real competition) | |
| 4 | How much can they spend on this? | $ |
| 5 | Where would they hear about you? |
Example of a weak profile: people who are hungry.
Example of a strong profile: a parent picking up a child at 3:15. They have 20 minutes and $6.00. Right now they buy a bag of chips at the deli.
The three questions. Same three for every team.
- Do you have this problem? Tell me about the last time.
- What do you do about it right now?
- If this existed, what would you pay for it, and what would make you not buy it?
| English | Spanish |
|---|---|
| Do you have this problem? Tell me about the last time. | ¿Tiene usted este problema? Cuénteme la última vez. |
| What do you do about it right now? | ¿Qué hace usted al respecto ahora? |
| If this existed, what would you pay for it? | Si esto existiera, ¿cuánto pagaría? |
| What would make you not buy it? | ¿Qué haría que no lo comprara? |
The recording rule
Write down what they said, not what you think they meant.
- Weak note: he liked it.
- Strong note: he said "I would pay two dollars but not three, and only if it fits in my bag."
Use quotation marks. If the interview happens in Spanish, write it in Spanish. Translate one line later for the poster.
Interview 1
Who I talked to (a role, not a name): ____________________________
| Question | What they actually said |
|---|---|
| 1. Do you have this problem? Last time? | |
| 2. What do you do about it now? | |
| 3. What would you pay? What would stop you? | $ |
Interview 2
Who I talked to: ____________________________
| Question | What they actually said |
|---|---|
| 1. Do you have this problem? Last time? | |
| 2. What do you do about it now? | |
| 3. What would you pay? What would stop you? | $ |
Interview 3
Who I talked to: ____________________________
| Question | What they actually said |
|---|---|
| 1. Do you have this problem? Last time? | |
| 2. What do you do about it now? | |
| 3. What would you pay? What would stop you? | $ |
What changed
The three prices we heard: $________ $________ $________
One thing we now know that we did not know at the start of this period:
Line 1: ____________________________________________________________________
Line 2: ____________________________________________________________________
One thing we are changing about our idea because of it:
Line 1: ____________________________________________________________________
Line 2: ____________________________________________________________________
Team initials: ______ ______ ______
Page 2: The numbers
Part A: The worked example, done with the whole class
A custom drawstring tote bag (this uses Unit 5 skills).
| Line | Amount |
|---|---|
| Fabric for one bag | $1.80 |
| Cord | $0.30 |
| Thread and needle share | $0.10 |
| Printed paper tag | $0.05 |
| UNIT COST (add it up: what one costs you to make) | $________ |
| PRICE (what you charge for one) | $6.00 |
| MARGIN (price minus unit cost: your profit on one) | $________ |
| FIXED COST (paid once, no matter how many you make): a stencil kit | $15.00 |
| BREAK-EVEN IN UNITS (fixed cost divided by margin, rounded UP to a whole bag) | ________ bags |
Say it out loud with the class: "We stop losing money after the ______ bag."
Why rounded up? ___________________________________________________
Part B: Your own numbers
Unit cost: every single thing it takes to make ONE. Count even the small stuff. Include the bag, the tape, the tag.
| # | What you have to buy | Cost for one unit |
|---|---|---|
| 1 | $ | |
| 2 | $ | |
| 3 | $ | |
| 4 | $ | |
| 5 | $ | |
| 6 | $ | |
| UNIT COST (total) | $ |
Is your idea a service with nothing to buy? Then your unit cost is your supplies plus anything you have to replace. Write "time" on a line and leave the dollar amount at $0.00. Then write how many minutes one job takes: ______ minutes.
Price, margin, fixed cost, break-even
| Line | Where the number comes from | Amount |
|---|---|---|
| UNIT COST | from the table above | $ |
| PRICE | what your three customers said they would pay | $ |
| MARGIN | price minus unit cost | $ |
| FIXED COST | anything you pay once, no matter how many you make (a kit, a stencil, a sign, a table fee). Write $0.00 if there is none | $ |
| BREAK-EVEN IN UNITS | fixed cost divided by margin, rounded UP | units |
Our sentence: "We stop losing money after the ______ unit."
If your fixed cost is $0.00, your break-even is 1 unit. Say so: "We make money on the first one, because we have no fixed cost."
The one-month projection
A projection is your best honest guess at what will happen, with a reason behind the number.
| Line | Math | Amount |
|---|---|---|
| Units we think we can sell in one month | units | |
| times MARGIN | $ | |
| minus FIXED COST | $ | |
| = ONE MONTH'S PROFIT | $ |
The rule that keeps this honest: the number of units needs a reason. Not a guess.
- A guess: "We will sell 200."
- A reason: "There are 88 students in our grade. All three people we interviewed said they would buy. We projected 30, which is about a third of the grade."
Our reason for the unit number:
Line 1: ____________________________________________________________________
Line 2: ____________________________________________________________________
Grade 8 line: the same break-even at a lower price
| Line | At our price | At $1.00 less |
|---|---|---|
| Price | $ | $ |
| Margin | $ | $ |
| Break-even in units |
One sentence: what does dropping the price by a dollar do to how many you have to sell?
Line 1: ____________________________________________________________________
Grade 8 line: fixed and variable, separated
| Fixed (same no matter how many) | $ | Variable (changes with how many) | $ |
|---|---|---|---|
Peer number check
Read your four numbers out loud to another team. They check the math and ask you one question.
Checking team: ____________________
| Number | Their check: right or fix it | Their one question |
|---|---|---|
| Unit cost | ||
| Margin | ||
| Break-even | ||
| One month's profit |
Fix any error in red. Then:
CFO signature (this means the arithmetic is right): ____________________
Teacher initials (the gate): ______
Word bank
| English | Spanish |
|---|---|
| customer | cliente |
| target customer | cliente objetivo |
| unit cost | costo unitario |
| price | precio |
| margin | margen de ganancia |
| break-even | punto de equilibrio |
| projection | proyección |
| fixed cost | costo fijo |
Sentence frame: "We stop losing money after ___ units." / "Dejamos de perder dinero después de ___ unidades."