Young Enterprise: The Recipe for Success

The Young Enterprise Scheme runs every year at Farnborough Hill, under the expert guidance of Business and Economics Teacher Miss Lucy Miller.  We spoke with Miss Miller and two Year 10 pupils, Eesha, Managing Director of Lazy Mountain, and Gabby, Managing Director of Aura, to learn more about the entrepreneurial scheme.

Please tell us about what the Young Enterprise scheme involves…

Gabby:

In essence, the Young Enterprise scheme is all about setting up and running your own company.  This means you need to work as a team, everyone with different roles such as marketing, finance, human resources, operations, managing director.

Miss Miller:

Each member of the team will be a company director but also has the opportunity to become a shareholder and therefore become both an owner and employee of the company.  They choose what to sell, where to sell, how to market their products and motivate the team, they are responsible for financial control, operations and reporting directly to all stakeholders.

Eesha:

Throughout the course of the year, you will have the opportunity to design and produce your own product and sell it to make a personal profit.

Miss Miller:

Product ideas have included candles, cookbooks, honey, soap, silver service waitressing, pet treat packs, lanterns, clothing, jewellery, bags, solid perfume, home furnishings and children’s books….the possibilities are endless.

Gabby:

It can truly involve anything; this depends on what your business model is.  We also get the opportunity to enter competitions, and Young Enterprise organises some sales events where we can meet other YE companies from across the country and learn about their unique businesses.

 

Do you have guidance from any industry experts?

Eesha

Yes, each Young Enterprise group has a business advisor to guide them through the journey and they are very helpful in steering the us in the right direction.

Gabby:

The team’s advisor will attend our weekly team meetings, and offer advice based on their experience.

Miss Miller:

The mentors are people from industry who have a wealth of experience and expertise and are willing to volunteer their time and energy to lend support, offer direction and act as a sounding board for the newly formed companies.  They help to coach the teams as they face all the typical problems and challenges that any new business faces but they do not hold a director or shareholder position.  The running of the company and the ownership is very much under the direction of the pupils.  We are very fortunate to have some incredible business mentors who have supported YE at Farnborough Hill for some time and have been unwavering in maintaining their contact and support of the companies. 

 

How do you come up with your products?  Are there any rules you have to follow with regards to product selection?  Do you undertake any market research as part of deciding what your business will offer?

Miss Miller:

This varies and some teams are very much product led whilst others are more market led.  Often the product ideas will evolve and pupils can offer either a tangible good or a service.  There are endless opportunities and options. Initial meetings have lots of idea generation and can evolve from discussions on their travels, personal experiences, products they feel could be improved upon, gaps in markets and sometimes the discovery of completely new markets altogether.  We have had businesses formed by recognising and seeking to utilise the talents of company members and it is not unusual for students to start YE with numerous business ideas which they have had marinating in their minds over the years.  Entrepreneurship can begin at a very early age.

Gabby:

Due to food laws and the time it takes to earn a trading license for food, it is better to not have a company based around food if you only plan to run the company for a year.  Other than that, there really are no limits and the product does not always need to be a physical product such as candles or tote bags or invention.  It could also be offering a service; one year a group trained to be waitresses and they waited at different events.  Sometimes product ideas just come out of the blue, or to spread awareness, or to provide something in demand.  Perhaps when people are consciously thinking about any problems they see in everyday life and often a product can be to try and solve this problem.  No matter how the product is decided, research is key: you need to know about the market, the competition with similar products, prices, costs, logistics and more!

 

What selling opportunities do you have; are they all based within school or do you attend fairs or markets outside school?  Can you sell online?

Gabby:

It is up to the company, and what the product is - there are no limits.  You can sell at school events where many people could buy your products, you could sell at markets.  If you contact enough places, you could even get your product in a shop, where the buyers pay a wholesale price for a large quantity.  Young Enterprise organises some places to sell; for example, Old Spitalfields Market in London this year (which was amazing!), however the selling opportunities don't stop there.

Eesha:

For many Young Enterprise businesses in Farnborough Hill, their first selling opportunity is the Christmas Bazaar at school.  That is a great starting point and gives us a boost to apply for stalls at other local markets.  We, for example, sold at our Primary Schools’ Summer Fairs.  There is also a website known as 'Trading Station' where all Young Enterprise companies can set up their store online and organise deliveries too – it is like eBay, for Young Enterprise companies.

Miss Miller:

Selling opportunities are varied and teams must decide on the avenues and pathways that are most suitable to their product.  Careful consideration needs to be given to the nature of the product or target market.  A recent company that sold subscription packages for pets found that partnering with dog groomers worked well.  Many of our businesses sell directly online and a team selling a range of beeswax and honey-based products found that linking up with a local Co-Op store was a successful distribution opportunity. 

 

Are there any constraints on how you can market your business?  What is a typical marketing mix and have any of the companies in recent years done anything especially innovative?

Miss Miller:

The pupils are quick to learn that all the features that influence the consumers decision to buy their product need to ‘fit’.  The price, product, promotional methods and place where the product is sold need to complement one another.

Gabby:

There are not any considerable restraints; social media is a popular marketing tool, as well as flyers, posters, and giveaways to draw attention.

Eesha:

Although there are many ways to market your business, for example the social medias like TikTok and Instagram, it is highly unlikely the company will 'go viral' so we found the best way to advertise was either on the school website or through word of mouth, which does spread fairly quickly.

Miss Miller:

Financial constraints can be an early obstacle as each company wants to upscale quickly but are limited by its initial cash position.  Loans are discouraged and so early profits are reinvested back into the company helping it to grow, so growth is organic, but can be very fast in some cases.  A clothing company once sub-contracted out production as they could not keep up with demand.  Lazy Mountain, last year, found that hiring and borrowing printing equipment created certain challenges; within a matter of months they had sufficient capital to purchase their own equipment. 

 

How much of a time commitment is there?

Miss Miller:

Each company has a weekly meeting lasting an hour.  It is led by the company managing director and all members attend.  This meeting follows an agenda and often problems and opportunities are discussed, priorities identified, tasks allocated and updates from each functional area are shared.  Each company can choose how to run and typically a democratic approach is favoured with meetings often including voting on key decisions and options.

Outside of these meetings the time commitment can vary and at different stages may require additional input from different departments.  At pinch points directors often recognise that everyone needs to roll up their sleeves and muck in!  It is not unusual to hear that someone’s family garage was occupied by a YE company operating an intense flow line production schedule over a weekend to build up stock levels! 

Eesha:

In our company, 'Lazy Mountain', we met up after school and in the half term to make our product and ensure we made each product with precision.  However, this time was spent with friends, therefore did not really feel like a 'business' but rather a meet-up with a purpose.  We had a lot of fun while being productive!

 

What happens to your profits? And what happens if you fail to recoup your costs?

Miss Miller:

Financial control is fundamental and the finance director has a critical role in updating the team on the financial position of each company, they will open the bank account, set up the debit card and cheque book and take responsibility for managing the online banking transactions.  We are lucky that HSBC support the YE programme and along with the business mentors each team is guided through the process of setting up and managing a business bank account. 

An accounting software is used within the YE programme to help each team track their incomings and outgoings and profit estimates are tracked against profit targets.  The profit and loss statement and balance sheet are presented at the AGM at the end of the year.  Profits, after tax, are distributed to shareholders and often each company also chooses to make a donation of post tax profits to charity.  Returns have been incredible, last year some shareholders received a 400% return on their investment.  The pupils have a remarkable ability to turn start up capital into profits and whilst the role of the finance director is fundamental, achieving a profit is usually always a whole team effort!

Gabby:

If you fail to recoup your costs, then unfortunately not much can be done; the business has made a loss, and this can happen in YE just like in any other business.

 

How did you appoint the various roles within the company?  Are there some roles more desirable than others?

Miss Miller:

The link teacher will give an overview of each of the director roles and a description of the suitable characteristics for the person who will eventually fill that role, almost like a job description and person specification.

Gabby:

Everyone says which role they are interested in, and roles are assigned based on this.  Normally the Managing Director has several candidates, however there can only be one.  This is usually decided with a pitch from each candidate, and everyone votes.

Miss Miller:

Often students will feel drawn to a particular role and similarly their peers may nominate them for a role seeing their qualities and suitability for that specific role shine through too.  Throughout the programme key director roles will receive training that is specific to their role.  There are some roles that are particularly interesting, such as the role of Managing Director and Corporate Social Responsibility Director.

Eesha:

Different roles suit different personalities: for example, if you are a very strong leader and like putting your own ideas forward and taking responsibility, then the Manging Director role is perfect for you.  However, if you enjoy the ethics and keeping everything and everyone in line as well as being the 'morale of the company' then perhaps a role such as Human Resources or Corporate Social Responsibility would be suited for you.

 

Please tell us about the competition element of the YE scheme…

Miss Miller:

There are numerous trade events where students can compete in terms of generating the highest sales, having the best presented trade stand or delivering the superior level of customer service.  YE also run competitions for the best advertisement, teamwork awards and prizes for innovation.

There are various YE competitions throughout the year and winners will go through to the next round – there is a local, regional and national competition whereby students deliver presentations on their company, field questions from Judges and pitch their trade stand.  There is a Dragons’ Den competition where they can pitch for funding to help bolster their start-up capital.

Eesha:

Each Young Enterprise company has the opportunity to enter the 'Company of the Year' competition which consists of making a presentation about the Young Enterprise journey; filling out a form articulating this journey and having an interview with some of the experts.  The first round is the local award, followed by regional and finally national.  Each round winners receive prizes, usually funds to invest in the company.  The competition element creates motivation for the company to do well and is a very fun thing to experience.

Gabby:

The competitions are also a great opportunity to see what other YE companies are doing throughout the country.

 

Finally, once the scheme is over, do you have to fold your company, or can you keep running it?

Miss Miller:

We typically do fold the company, particularly for students going into Year 11 as their focus will be their academic studies and their pending GCSE exams.  We have had pupils become inspired by the scheme and go on to set up their own businesses and, in some instances, pupils have continued the business idea / product by buying all the closing stock from the company when it is wound up and then pursuing the business idea independently with permission from their fellow shareholders and directors.  In fact, we have some YE product ideas and businesses still in operation amongst our alumni.