Picture the scenario: A group of 15-year-olds from Hauraki Plains College get together in their free time. But these teens aren’t discussing the latest music trends, or the rugby game at the weekend.
Instead they are putting their heads together to rethink the sales strategy for their new business, after a major commercial setback.
The students are enrolled in the Lion Foundation Young Enterprise Scheme (YES), and the setback involves the decision by The Warehouse not to stock their product.
This Waikato group is just one of over 600 student teams in New Zealand competing to become the Lion Foundation Young Enterprise Company of the Year.
“All teams take part in regional trade fairs in August and have to submit an annual review in September”, says Sasha Webb, communications manager at the Young Enterprise Trust, which oversees the scheme.
“The regional champions are announced in October, and then they will contest the national title in December.”
The winning team gets $3000 in cash and each student gets a $5000 scholarship for Massey University’s business school. Plus there’s a $2000 cash prize for the winning school.
YES was set up in 1981 to provide practical business skills for senior secondary students. The students work as a team to set up and run their own business for a year, creating real products or services, compiling and implementing a business plan – and making real profits or losses.
Part of the deal is that participants also develop life skills critical for the world of work, Webb says.
The Hauraki Plains student project involves producing an album of original music written by their classmates, with all the profits going to the Starship Foundation, says Isaac Heron, finance director of the student team.
“We have done surveys of people of various ages to discover our target market, the best price to sell the albums for, and whether to include a version of our product online, such as with iTunes or Google Play, along with a physical product.
“We are currently trying to find a solution that still gets our albums sold.”
The purpose of the scheme is to get students interested in business and entrepreneurship – and it seems to be working. Some of the Nelson team are already involved in other business ventures.
A 2013 YES alumni survey conducted by the Young Enterprise Trust found 20% of participants had gone on to run their own businesses. Of these, over 90% said YES had influenced their decision.
Many of these entrepreneurs had set up a business with a national – or even global – reach.
Some past participants have been particularly successful. YES alumni include Rod Drury, co-founder and CEO of online accounting software company Xero, and Nathalie Whittaker, founder of Givealittle, a no-fees online fundraising tool for people and charities.
The YES alumni survey shows at least 1,000 jobs have been created in the almost 50 companies started by YES entrepreneurs.
Meanwhile, the 2015 Hauraki Plains College team is being mentored by Split Enz band member Mike Chunn, and gets advice from Hamilton’s business incubator Soda Inc.
They have already put their business plan together and have pitched their idea in a Dragon’s Den-type contest.
Heron says being involved in YES has made him more interested in business, although he won’t necessarily start his own company straight away.
“I’ve liked being in finance, but I’d like to do something in an established business, not start my own thing. It’s difficult to come up with a new idea in the market.”
He says he hadn’t realized how hard running a company was, and the YES experience means he would do it differently next time.
“I think I could do it a lot better if I did it again. I would try to come up with an idea faster and try to do a better plan early and then get on with it as fast as possible. I would try and get sponsors early, get contacts, make a timeline and have deadlines. That’s not something we have done.
Still, it’s been worthwhile, even if they don’t win the regionals, Heron says.
“It’s been good practice for the real world.”