5 Lessons to Help Your Students Understand Business
Take the time to help your kids understand the principles of supply and demand, sales forecasting, distribution, pricing and customer care.
Understanding the basic principles of business is an important life skill for students of all ages. As an educator or parent, it is essential that you help them to learn these ideas. Take the time to help your kids understand the principles of supply and demand, sales forecasting, distribution, pricing and customer care.
Understanding Supply and Demand
Before you start any business lesson, you need to introduce the idea of supply and demand. Understanding this basic economic principle is essential throughout the exercise. You can begin by going over both terms individually before covering their relationship with each other. Start by explaining supply. Depending on the student's age, you can show in real or hypothetical items. Then ask students who want these items. From this, you can discuss how many of the merchandise they need to ensure everyone gets one. After finishing this first round, repeat the exercise. Continue to repeat this exercise until no one wants the item. This repetition will show how, as supply increases, the demand decreases.
Creating Sales Forecasts
Once your students understand supply and demand, you can help them to learn how to use this to make a sales forecast. Sales forecasting is applying the supply and demand principle to real-life by introducing more factors and using this to plan how many of the items will be sold by when. This idea is used by companies around the globe to help them set budgets for the quarter and year. Have the students practice this idea by thinking about their hypothetical product and how many they can sell in a set period, reminding them to consider holidays and seasons. Then, ask students about how they came up with the numbers they did.
Making Price Plans
While the students are learning about sales forecasting, take the time to help them understand the costs of goods. You can start by asking students to think about how much they think they can sell their items to customers. Once students have set their price, ask them to consider what it costs to produce their product. Remind them to factor in materials as well as labor. The students should then compare what the price they set was to what their production costs are. Have the students discuss why they set the price they did and how they would adjust their price now to ensure that they still made a profit.
By this point, your students should have a good understanding of supply and demand, sales forecasting and price setting. They are now ready to start talking about channels of distribution. Have your students begin a discussion about how they want to sell their products. You can help guide the talk by asking them to decide if they will make direct sales, work with a distribution partner or use third-party sellers. As you discuss, review both the benefits and disadvantages of each option. By the end of this lesson, your students should have a clear idea of what they are producing, the sales plan, pricing and how they will distribute it.
Taking Care of Customers
Now that your students are ready to sell, have them start to create a customer care plan. Teaching customer service is a necessary skill for every student to learn. Start by talking to your students about what is their understanding of what is good customer service. Then have them start with activities to practice real-life scenarios. Once you have finished, have students talk about what was good about how the customer was treated. This will lead you to discuss why this service matters, including if it will affect their ability to sell. This lesson will help your students learn about the importance of behavior when making sales.
An understanding of business will help your students no matter what career path they choose. By learning how to apply these lessons to the world around them, they are sure to succeed.