James N. Barnes and R.L. Frazier
New business formation has always been important for economic growth. Self-employed individuals who have no paid employees operate 75 percent of U.S. businesses. Spurring entrepreneurship activity is an economic development strategy for rural Louisiana. As part of the entrepreneurship initiative at the LSU AgCenter’s Delta Rural Development Center in Oak Grove, faculty have identified youth in Northeast Louisiana as a target group for entrepreneurship education. Why youth?
A 2005 survey by Junior Achievement, a successful youth entrepreneurship program in the United States, concluded that nearly 70 percent of teenagers wanted to become entrepreneurs, despite knowing this path wouldn’t be easy. Research shows teaching entrepreneurship skills to youth can have several positive effects. These include:
Developing a pilot program
- Acquisition of time management and interpersonal skills.
- Increased problem solving and decision making skills.
- Improved academic performance, school attendance and overall educational attainment.
- Increased interest in attending college and occupational aspirations.
- Increased independent reading and leadership behavior.
LSU AgCenter faculty developed a pilot program for a group of six 4-H Junior Leaders in West Carroll Parish. The goal was to introduce the students to business on the Internet and challenge them to learn about buying and selling on eBay, but mostly selling. AgCenter faculty met bi-monthly with these students for entrepreneurship training sessions. The program involved three phases.
Phase 1 was to study eBay. The students were to bring a product from home, write a product description and then upload their product onto eBay for sale via an auction. Some students struggled with product descriptions. The students who struggled the most had brought products such as antique lamps and old record albums. The students quickly learned that standardized products such as movies and games already had descriptions either on the box itself, or consumers could recognize movies and games by their titles. The students learned an important lesson. Helping buyers understand what the product looks like and how it performs increases the probability of selling products.
Phase 2 began by using case studies about running a business. Students played an online game called Hot Shot Business. The case studies combined with the game made the principles of running a business more realistic. The students had to make decisions about pricing, marketing, sales and ethics.
In Phase 3, the group returned to eBay activity to practice marketing, sales and finance skills with a real project. The product to sell was a youth-sized four-wheeler. The students did the research on pricing and product description for the four-wheeler by examining auctions for similar vehicles. They also had to calculate shipping charges. Armed with their business model, they visited the actual storefront in Oak Grove to negotiate for their commission. After settling on a 10 percent commission, the students listed the product and watched the number of buyers and bids for the next week.
During the last of the 10 sessions, the students presented what they learned to the Oak Grove Chamber of Commerce. The chamber provided students with cash prizes totaling $100 dollars for the top three participants for their efforts to learn entrepreneurship skills and apply them in the Oak Grove community. Lessons learned
Here are the lessons learned from the pilot program:
- Start with a small, dedicated group of students. The tasks are difficult, and the students need much individual attention.
- Don’t plan to make money. Tell the students a business usually takes four years to make a profit.
- Use defined rewards. The students were motivated to do the lessons with the promise of a cash prize at the end.
- Keep it fun. Playing the game, Hot Shot Business, was a way for the students to learn from mistakes safely. Teaching negotiation skills helped students work with each other and provided some free time to learn how to buy and sell effectively.
In December 2007, AgCenter faculty invited six 4-H Junior Leaders from Caldwell Parish to participate in this program. Two students from the West Carroll pilot program participated in the training. Faculty taught marketing strategies for selling online based on the case study readings assigned. Students were also required to bring items from home, write product descriptions and upload their products onto eBay. One week later, faculty and the two students from West Carroll taught students how to play the Hot Shot Business game and then explained how students could package and ship products. As the auctions ended, students had sold two of the five products. Based on evaluations, the program was highly successful at teaching the entrepreneurial skills of managing an online business on eBay.
LSU AgCenter faculty will continue to offer the abbreviated program. By the summer of 2008, an in-service training for other 4-H agents in Northeast Louisiana will be provided to share all the teaching materials developed. These materials will be available at the LSU AgCenter’s Delta Rural Development Center at www.lsuagcenter.com/drdc
Sandra Russell, Associate Agent, Caldwell Parish, Columbia, La.; Dora Ann Hatch, Community Rural Development Agent, North Central Region; Myrl Sistrunk, County Agent, West Carroll Parish, Oak Grove, La.; Seth Strong and Ben Bennett, both 4-H Junior Leaders, West Carroll Parish, Oak Grove, La. (This article was published in the winter 2008 issue of Louisiana Agriculture.)