There are plenty of credit unions that offer financial programs for children, but the $1 billion Meriwest Credit Union in San Jose, Calif., found a way to literally have kids rolling in the dough.
This summer Dan Goldin, business banking officer at the 70,000-member credit union, brought the idea of the Fun Time Cookie Company to youngsters who participate in the Richmond, Calif. Police Activities League. Goldin said the kids gobbled up the idea of starting their own cookie company.
About 15 kids between the ages of seven and 16 participated in the activity and were divided into two groups: bankers and business owners. The bank accepted $50 in deposits from parents and counselors. Then, the cookie company applied for a $50 loan to purchase the materials to bake cookies. The loan funded July 10 and the bakery was officially in business.
From voting for the CEO of the company to creating posters and operating the cookie sales, the children learned about operating a business from every angle.
“At first everyone wanted to be in charge until I explained the responsibilities,” Goldin said. “It didn’t take them long to learn how profit margins worked and they were soon talking about the bottom line. This program can be easily replicated at other children’s programs.”
According to its website, the Richmond PAL’s mission is to provide a safe and nurturing environment for youth through recreational, educational, cultural and social programs while building positive relations between police officers and the community.
As a result of the Fun Time Cookie Company, participation in the program by PAL children expanded, said Brenda McCuistion, PAL mentoring program coordinator.
“Participants consistently showed up to contribute to the success of the business,” she said. “I watched relationships build and team work develop. Leadership emerged from the kids and I saw future entrepreneurs in action. Dan and I witnessed a lot of creativity both in sales and in the creation of a tasty cookie.”
There were some stressful situations, such as when the idea to sell drinks with the cookies went sour.
“The children found out that the milk wasn’t selling and they needed to move it,” Golden said. “So, they came up with a plan to offer the milk with a cookie so it wouldn’t spoil.”
McCuistion said the kids learned social skills that they can apply in their careers.
“While salesmanship was clearly visible, I also saw a need for improvement in customer service,” she said. “Some of our youth are still learning how to express anger in the midst of an upset. There was a customer that tried to steal a delicious cookie and the sales person was not having it. I appreciate the sales person’s loyalty to the business and this became a teaching moment on how to deal with difficult customers.”
Besides thwarting cookie thieves, the youngsters developed skills in learning about drop sheets and balance sheets which has created dialog about financial management.
Fun Time Cookies turned a $159.74 profit on $301.37 in gross sales and repaid the loan with interest. The kids also learned about key financial indicators like net profit margins and debt ratios.
Adriana Ramos of Richmond is a volunteer who worked closely with the young entrepreneurs, teaching them how to bake the most appropriate cookie to produce a profit. She is also the parent of three children who participated in the program: Ernesto, age 15, Jovanny, 12 and Jonathan, 11.
“They learned how to run a business and how to manage it, they learned how to keep track of their money and how to spend it wisely, which is a very good opportunity if you ask me,” she said. “If you go out and spend on materials you really don’t need, then you’re pretty much going to end up with no profits and even worse you’re going to go bankrupt.” Ramos also said the children enjoyed running a business.
“I think they really enjoyed learning how to manage a business on their own and learning the responsibilities, from making sure they have inventory to bake cookies to making sure they have enough funds to keep on going with the business,” she said. “It was a good program because not very many people get to have an experience on how it feels to run a successful business with their peers.”