I Learned My First Business Lesson in 7th Grade. It Wasn’t In The Classroom.

Credit: abovethelaw.com

[It’s Randy this time around.  Occasionally he steals the keyboard.  Enjoy.]

In seventh grade I walked about a mile and a half to school on most days.  This was way back in the mid-seventies (yes, I’m that old).  Back in those days, the school lunch tray cost forty-five cents (stop looking so shocked, okay?  I already said I’m old!)  My mom would give me a dollar each day for lunch plus a treat at the school snack bar. This snack bar also served burgers, fries, hot dogs, etc.

But this “good” food was way out of my dollar-a-day price range.  I had to get creative.

Conveniently, there was a 7-Eleven on my way to school. I would stop in each morning and spend all of my lunch money on candy.  (Before you start judging, no, I didn’t eat candy for lunch.)

I bought it to sell.

Picking the Right Products

I didn’t buy just any candy.  I needed something I could buy fairly cheap and sell at a higher price, that would sell easily.  The perfect product was Now and Laters.  Do you remember those waxy fruit-flavored chews that last a long time?  Yeah, those.

They were perfect.  First, they were cheap.  I could buy a 7-piece pack for 10 cents.   Second, they were popular.  I would usually sell out long before lunch time.

Demographics, Supply and Demand

Who were my customers?  A whole bunch of kids with lunch money.  Sure they could get candy at the snack bar, but for that they had to wait for lunch.  Most kids barely got out the door with a piece of toast for breakfast.  So they were hungry long before lunch rolled around.  And hunger makes people do irrational things.

These kids were trapped at school with no other options until the snack bar opened at lunch time.  The snack bar did have some good options for sweets.  They had all kinds of pastry products and candy bars.  Most were at least fifty cents.

Now you may be wondering if other kids tried to copy my business model.  A few did, but they were never as consistent as I was.  I had a lot of loyal, regular customers.  (Did you read that?  A 7th-grader with “regular” customers.  I still find that funny.)

Pricing Your Product for Optimum Sales

So, what did I charge?  I broke the 7-piece packs apart and sold them for ten cents a piece.  Anybody can afford to spend a dime.  You could probably go for a short walk and find that much laying on the street.  My price was affordable and at ten cents a piece, I had potential to earn a $6.00 profit from my initial dollar.

I may have been able to double my price and earn a lot more, but hey, I was a kid and wasn’t thinking about higher profits.  I just wanted a snack bar lunch and money for the arcade on the way home.

What’s Eating Away At Your Profits?

In my case, it was me.  I had a backpack full of candy, I was a kid, so of course I’m going to eat into my profits. (In most cases, once I had sold enough to get what I wanted from the snack bar, I just ate the rest.  Again, I was aiming for the short-term game. Oh well.)  My favorite at the snack bar was Hostess Suzy-Q’s.  Remember those? They used to be awesome. The filling would be so thick it would run all over as you ate them. Now the cream is so thin you barely see it in the package.

The Lost Potential

Man, if only I had been able to see the business potential instead of just being satisfied with that darned Suzy-Q.  I could have scaled it up into a serious profit beast.  I could have branched out with multiple sellers where I would take half their profits for supplying the candy.  Can you see it?  I show up in the morning with a case of Now and Laters. Distribute product to my sellers. Collect my share of the profits at lunch. I would have been able to buy my own 7-eleven at 17.

But it’s not all lost.  Looking back, I see that I naturally fell into entrepreneurship without any outside influence teaching me how.  I knew I wanted the “good” lunches the snack bar offered. Getting my parents to spring for it wasn’t going to happen. It was junk compared to the school provided lunches.

I had to figure out my own way.  (There’s a reason why they say that necessity is the mother of invention.)

My mother has told me many times that she’s not surprised at all that I’m a business owner.  I guess I had the entrepreneurial spirit in me all along.