>> Production funding and educational outreach for Biz Kids is provided by a coalition of America's credit unions, where people are worth more than money.

A complete list of individual credit union funders is available at wxxi.org.

>> Every day, America's credit unions help members with their financial needs and with programs like Invest in America.

It's only fitting that credit unions support Biz Kids because financial education is what we do.

Learn more at lovemycreditunion.org.

>> Ladies and gentlemen, the Biz Kids episode you're about to see is designed especially for people starting a business, perhaps for the very first time.

Sort of like me steering this ship for the first time... which actually, I am.

Get ready for a crash course on starting a business.

>> Woo-hoo... ♪ When making money is the aim, These kids they bring their game.

♪ They're the Biz Kids!

Can you dig it?

♪ They know what's up, they let you know just how to make that dough.

♪ They're the Biz Kids.

Right on!

♪ So learn a little more about bringing money through the door.

♪ They're the Biz Kids!

Right on!

♪ >> Almost anyone can start a business.

And there are five key steps.

>> Are you sure there aren't seven steps?

>> I heard there were nine steps.

>> All right, there are a lot of steps.

But this is a crash course on starting a business.

>> I don't know if we should associate the words "crash" and "business" in the same sentence.

>> Then how about we start with the first step-- the idea?

>> I thought the first step was marketing.

>> Marketing what?

The idea.

>> I thought the first step was to make a profit.

>> Profit off what?

The idea.

>> I thought the first step was the funding.

>> Again, funding what?

The idea.

>> How about a plan?

>> This is all part of the plan to sell the idea.

>> Okay, so first you get the idea.

>> Now, any idea how we end this?

>> I have no idea.

>> We're entrepreneurs who made millions from magnets.

>> I was going to middle school, and I wanted magnets for my locker.

And I drew up some designs and I put them into bottle caps, put them onto my locker, and Snap Caps were born.

I don't really know how the idea necessarily came to me.

I just saw a bottle cap and thought I could come up with something from it.

After I'd seen such a positive response from friends, I decided that other kids out there probably would like them, and I went to my mom and I said, "Can I sell these?"

And she said, "Okay, well, first we need to go up to the bank."

And I had saved up all my money, and I withdrew $300 and my mom matched this amount, and that was used to buy supplies.

I just walked into the toy store and said, "Hi, my name's Maddie.

I'm ten.

I'm wondering if you wanted to sell my product."

And she decided to give me a shot since I'm a kid, and it turns out they actually sold.

We were approached by a sales rep here in Dallas that wanted to sell Snap Caps for us, and now we have tons of sales reps across the country that sell to all 2,500 of our stores.

We made about $10,000 in revenue our first year.

We're in the millions right now.

It's kind of crazy.

I never really would've thought that it would have gotten this far.

I just thought maybe, at the most, a few local toy stores.

My sister is the vice president of M3 Girl Designs.

>> I help Maddie come up with ideas, because I really like fashion and also I know what my friends like.

My favorite design is probably my dog Annie, because I really like her a lot and that was one of our first designs.

I've got to say working with my sister is the most funnest of all.

>> This is where our employees make Snap Caps every day, and this is where the bottle caps turn from this into this.

I draw all the original artwork, and then we have employees who reproduce them.

It just started off as an after-school project and my mom, sister, and I would all make Snap Caps together, and now it's, I guess you could say it's kind of turned into, like, a Snap Cap empire.

( laughing ) I think a good idea is something that you don't have and that you can't find, but that you want.

Just make sure that whatever you do is your passion.

My passion is art, and I love to create, and so that's why I came up with Snap Caps, because I got to incorporate my love for art into what I do.

So if you want to start your own business, make sure that whatever you do, you have fun at doing instead of just doing it to have a business.

>> Hey, Biz Kid, if you have a great idea, you'll attract money like a magnet.

( horse neighing ) >> All right, Lucky, if we're going to eat tonight, I need a get rich scheme.

>> Well, I don't know about getting rich quick, but I do know that the first step to creating a successful business is to come up with a good idea.

>> An idea, huh?

Hmm, I can't think of an idea.

>> How about a business coming up with ideas?

>> That's a great idea!

Good thing I thought of it.

>> So, young entrepreneur, you want to start a business.

Well, the first step is that you need an idea for your product or service.

>> What do you love?

What are you good at?

>> What are you willing to work hard for?

>> Do you love bikes?

>> Do you love to draw?

>> Love fashion?

>> Do you like to turn trash into treasure?

>> Me?

I love cookies, and I've got my grandma's killer recipe.

I love to bake.

Hence, thus, viola, my idea-- Kaelon's Cookies.

In fact, I have a sheet baking in the kitchen right now.

Now, that was the easy part, I know.

I've got a lot of steps before Kaelon's Cookies is a big success, but I have the idea, and that is the first ingredient to success.

You know, I really could make a lot of money from this business.

I mean, I could do really well.

I could be big man on campus.

I wouldn't have to ask my parents for cash anymore.

I could franchise this, pretty much.

I mean, I could... >> I think his idea is burning.

>> Huh?

>> Kaelon?

>> Oh, okay, okay!

>> Kaelon?

>> It's all right!

It's all right!

>> You have an idea?

Pss!

I'd like to see that.

>> What did you say?

>> I said, that's a great idea Fast Buck.

>> Bingo.

>> I must say you seem in top physical shape.

What seems to be the problem?

>> I am Thor, god of thunder, son of Odin, cast down from Asgard, and I...

I'm bored.

>> Well, maybe you should start a business of your own.

You know what I think you ought to do?

Home renovation.

>> Is there skull crushing involved?

>> Well, the occasional intern, sure.

>> I like it.

When can I start?

>> You know, I've got an office remodel coming up.

Once you're up and running, I'll give you a call.

>> An office remodel, you say?

>> Uh-huh.

>> I'm on it!

>> No!

No!

>> ( laughing ) >> No, wait, not yet!

( crashing ) >> After you have your idea for a product or a service, the next step is to figure out how you're going to market it.

>> If you want to market it properly, you need to know who your target customers are.

>> Are they moms with kids?

>> Teachers?

>> Executives?

>> Animal lovers?

>> Seniors?

>> Punk rockers?

>> Clowns?

>> Other questions need to be asked in the marketing step.

What's the price?

Going to sell it door-to-door?

Going to sell it on-line?

What kind of packaging?

>> Me?

I've got this prototype box I've been working on.

I think it's pretty unique.

It sets me aside from the crowd.

Maybe I should make my face bigger.

>> I can make my face bigger.

Ah!

>> I'm Joe.

I'm 13, and I'm CEO of Bragg's Fine Swine.

We breed and sell pigs.

( pigs squealing ) We first bought the pigs by buying two family pigs from a local farmer and then it grew to a few more and a few more, and now we have close to 100.

We're going full bore at Bragg's Fine Swine.

With my marketing strategy, I'm going to take this little pig, these pigs, this little pig to market.

I realized the importance of having a marketing strategy when I took a course in the Young Entrepreneur's Academy.

The Young Entrepreneur's Academy is a local college you go to and you learn how to run a business plan and you learn about marketing strategies and everything else you would need to learn to run a business.

Marketing is the advertising part of the business where you get your word out.

If you don't have any marketing, the only people that you've told are the only ones that are going to know.

You have to actually advertise.

Marketing's how you reach your customers.

The people we're trying to reach through marketing are the people that are going to come and buy piglets for 4-H or just to raise for themselves.

I reach mine by putting ads in magazines and positive word of mouth.

Positive word of mouth is important because it's the easiest way that we have to get it out to so many people that are actually probably probable customers, because those people are going to tell ten people, and then they might even tell more people.

And those are your people that are actually probably probable possibly going to come and be your customers.

>> Bragg's Fine Swine is mighty fine!

>> So we advertise in Country Folk Magazine and the local Pennysavers all around.

It's cheap and cost effective to get it out to hundreds of thousands of people.

To place an ad in any magazine, all you have to do is call the person for whom you want to put the ad and tell them what you want to do after you've drafted one up, and they'll put it in for you.

It's very cheap to put an ad in a local or regional newspaper, which is very beneficial.

It's an easy way to market your business.

( pigs squealing ) If you want a successful business, you need a good marketing plan.

Hey, you guys.

So we hope to, in the future, continue the process from little pigs to roaster pigs to butchered pigs and then to bred hogs and continue the process again and again until I can save up enough money to go to college.

>> Hello, and welcome to the Bizianapolis 500.

>> It's a race for profits on a course fraught with peril.

Many call this track a crash course that's all business.

>> Ladies and gentlemen, start your business!

>> There is the green flag.

And someone has crashed almost immediately!

Oh, skidded into a poor marketing trap while pointing to his sponsors' stickers.

>> You know, I really get the sense that he was trying to attract attention to himself with that stunt.

Very interesting marketing strategy.

>> I had the weirdest dream last night... >> Oh, Alice!

>> Oh, hello.

Oh... what is all this?

>> This is all the money we made with our new business.

Some tea?

>> Oh, ( laughing nervously ) no, thank you.

Goodness, you seem to be doing very well for yourselves.

But what is your business?

>> ( gasping ) None of your business is our business!

>> Never mind.

I just hope you have a better plan for your profits than sandwiches and tea.

>> Oh, we do.

>> Money fight!

( laughing ) >> Stop it, the both of you!

I'm sorry, but if you keep going on like this, you're going to ruin all of your hard-earned profits-- and probably your business, too.

>> Well, what else should we do?

>> You have to properly manage it so your business keeps going, thus generating more profit.

>> That's the craziest thing I've ever heard.

Let's do it!

>> Oh, splendid!

First you need... what is it?

>> ( gasping ) >> Then you need... >> And then?

Well, that's... >> I guess I need to start over.

>> ( laughing ) Sorry, that was my line.

>> I got it.

I know it.

You need a statement of cash flow... >> ( laughing ) It was, but can we... >> And finally, you need a... oh my... >> What did you eat last night?

>> I love Alice in Profitland.

( laughing ) >> Capitalist Peg here.

You want a crash course in business?

Let's review.

Idea, marketing, funding, profit.

Put it all into a plan.

>> Hey, Pegalicious.

>> Speaking of no plan.

Brian, what's up?

>> Uh, I want to start a business making a video game.

I'm going to call it "A Crash Course in Business."

>> Brian, that's not a bad idea.

Now, put that into a plan and get back to me.

And a coffee, regular.

>> For any business to succeed, it needs to make a profit.

>> Even a non-profit has to make enough money to survive.

>> Right.

So you've got to figure out how your product or service is going to make that profit.

>> Some call this the "Economics of One Unit."

>> You take your income... >> That's easy.

It's the price.

>> ...and you minus your expenses... >> What it costs to make just one unit.

>> Can you still make a profit selling that one unit?

>> For me, income is easy.

I'm charging 50 cents per cookie.

Now, expenses are a little more difficult.

I'm using all my mom's cooking supplies, my grandmother's apron, and the oven here at Biz Kids so I don't have to pay for electricity.

But I am paying for ingredients, packaging, and marketing.

So it costs me $23 dollars to make three dozen cookies.

That averages out to... hmm, 64 cents per cookie.

I should be charging more than 50 cents.

>> All this talk about cookies is making me hungry.

>> Yeah, when do we get to sample the product?

>> That reminds me, I forgot to add in the cost of product testing expenses.

No.

No.

( cheering ) >> I'm Zoë.

I've turned my passion for fashion into a profitable business.

The name of my company is Zoë Damacela Apparel, and I make custom-made clothing.

And usually that means formal wear for women.

>> Okay, perfect.

Your business won't succeed unless you can make a profit.

Profit is any money that you make from your business minus the cost of running it.

So for example, if I'm making a dress, and it costs $100 but I spent $20 on fabric and plus I paid myself, let's say, $20 to make it, my profit would be that $60 extra.

In the beginning, I didn't know anything about business.

I had no idea that I was even supposed to be tracking my costs and tracking my profit, so I sold my first dress for $13 and I think the price of the fabric for that dress was at least $15, so I ended up losing money by selling that dress.

Then I discovered this really great, amazing program called NFTE which is the Network for Teaching Entrepreneurship, and they taught me so much about running the business.

I think once I created my business plan, I was able to actually see how much I was making in a year versus how much I was spending in a year, and that was really a shock to me, because I realized that I was losing money every time I made a dress.

So that's why a business plan is so important.

The Network for Teaching Entrepreneurship helped me develop this business plan presentation.

This is my cost of materials and direct labor.

I think this is the most important slide of my business plan presentation, because it demonstrates how I pay myself, and it also takes into account all the materials.

Just like a pattern helps you create a garment, a business plan helps you create a business.

So this is the economics of one unit, and this is just a breakdown of all the things that go into making the price of one dress.

For example, with this blouse, I would have to take into account the cost of the fabric, the cost of each button, plus ribbon, thread, even elastic in the sleeves.

Some things that I wouldn't necessarily think about are the price of the coat hanger and the price of garment bags.

And don't forget about your own time-- the cost of your labor.

I mean, I think if... if someone had told me when I was 14 that I would be this established designer by the time I was, you know, 17 years old, I wouldn't have believed them.

>> Hey, Biz Kid, your business won't succeed if you can't make a profit.

( cheering ) >> Let me get this straight.

You say there's been a crime.

>> Yeah, I'm not making any profit.

What are you going to do to help me?

>> Hmm, no profit, eh?

I'm on the case.

( sniffing ) Mm-hmm!

>> Well, what?

>> You're not making a profit because you're not charging enough!

>> ( gasping ) >> That, and you've got to stop giving it away to your freeloading relatives.

>> What?

>> Whoa!

>> Huh?

>> Bummer.

>> Grr.

>> So you have an idea for a business and the passion to do it.

You've researched the market and figured out how to make a profit.

>> Next step, funding.

How much is it going to take to get your business started and where is that money coming from?

>> You could ask your parents for help to get started, but they may not be able to help you out.

>> You could try bootstrapping.

That's where you do it with as little money as possible using just the resources around you.

Now, I didn't go out and start a cookie company with a brand new oven.

>> If you need to spend money, you might want to make a loan to yourself by taking money out of your savings account.

But remember, if the business fails, that money's gone.

>> You could also ask your friends or extended family for help.

>> If they believe in you, maybe they'll want to get involved.

>> But you'll have to pay them back or they might expect to become part owners.

Again, if the business fails, you've let down your friends and family.

>> Another option is to take out a loan from a bank or a credit union.

A lot of kids do that.

>> But you'll have to pay that money back with interest.

>> Lucky for me, I've saved up all my paychecks from Biz Kids, and now I have plenty to start my Kaelon's Cookies business.

But not everyone has enough for start-up, so a lot of people have to start what's called a "service business."

>> I'm starting a dog-walking service, and it's costing me next to nothing to get started.

>> Hmm, dog walking.

Maybe I should include dog cookies in my Kaelon's Cookies lineup.

They could be Kaelon's Canine Cookies.

I hope it doesn't bite into my profits.

Hah?

Bite?

Dog?

Cookie?

Grr!

>> Hey, Biz Kid, if you want to start your business, you need to find funding and... wait, huh?

>> Cut!

Again!

>> My name is Kellin Dixon.

The name of my business is King's Clean Up which is a clean up and debris removal service.

I specialize in foreclosed clean-ups.

As a foreclosed home, you know, it might be different clothes or sinks or TVs and different various objects in there where my business comes in and takes it away.

I think it's a valuable service, because as you sit down and look at the economy now, it's a lot of foreclosed homes.

You can hire my business to clean up your foreclosed home, so that way, you can put it back on the market.

NFTE stands for the Network for Teaching Entrepreneurship which is a program to help young entrepreneurs start up their own business.

My grandmother helped me get my business started.

One day, I came home from my NFTE competition, and she asked me to come upstairs and demonstrate my business plan for her.

Well, after I demonstrated my business plan for her, she gave me feedback and wrote me a check for a $1,000 to help me start my business.

>> You have to invest, as they say, in the future.

And this is my future.

>> Thank you, Grandma.

>> You're welcome, Kellin.

>> Before you start your business, you need to figure out how you're going to fund your start-up costs.

My start-up costs were $1,000 and it included brooms, garbage bags, shovels, clothes, gloves, hats.

The $1,000 that my grandmother gave me, I am planning on paying her back.

I'm the owner of King's Clean Up, and I funded my business with a gift from my grandmother.

>> Ah, it's the number 12 car with a black flag.

No business plan.

>> Well, there's a red flag now down at the track.

It seems like another team has too many expenses and not enough income.

>> Absolutely.

And here comes... is that Mario Risketti?

Not thinking things through, taking unnecessary chances.

The guy's a loose cannon.

>> In the lead is a Biz Kid... >> Can she hold on?

Can she?

Can she?

>> Yeah!

And the winner is car number seven, driven by a Biz Kid!

>> I can't believe I found this really old lamp in my grandma's attic.

>> Whoever rubbed my lamp is granted one wish.

>> Okay.

Wow, I've always wanted, like, laser eyes, but I've also really wanted to fly.

I don't know which is going to be cooler, so I'm going to go with money.

>> Are you sure?

>> Yep.

For my wish, I wish to be rich.

>> Alacazam!

>> What?

What's this?

Is this the information for my Swiss bank account?

>> No, that is a successful business plan.

>> What?

>> All you have to do is apply hard work to your plan, and you will retire rich someday.

>> Okay, well, if I wanted to work hard, I'd be rich already.

>> Not so fast.

Not everybody who works hard ends up rich.

Do you want to know the difference?

>> Is it because they had a crappier genie than I do?

>> No.

They didn't want to do the work.

They just wanted to get rich with no plan, no nothing.

They just wanted to sit on their fat bum, working hard at playing video games, all whining, "Make me rich, Genie, make me rich."

Well, I tell you, there's no free lunch.

You want to make money?

You got to have a plan.

>> Okay.

Well, I guess I get that now, but whatever happened to three wishes?

>> Budget cuts.

>> My advice to any Biz Kid who wants to find funding for their business is to look potential investors squarely into their eyes and then explain your plan confidently and with confidence, because people look for things like that.

>> So I have an idea for a product or service.

I've got a marketing plan.

I've figured out the cost and how to fund it.

>> All this goes into a plan.

A business plan.

>> The plan changes and evolves, but you need a plan to get started.

Try to keep it simple and to one page.

>> A business plan will give you a clearer picture of your business.

>> It'll help you set goals and explain your business to others.

>> You need a plan so you won't overlook ideas.

>> For example, part of my plan is to base my business from home, and to save money, send Kaelon's Cookies out to the world via the internet.

Now, none of this would've happened without a plan.

>> Kaelon's Cookies, Kaelon's Cookies... >> Yeah, yeah, I am definitely making my face bigger.

>> When you have an idea for a business, you definitely need a business plan to work out the details.

Hi, my name's Jessica, and I'm the founder of Popsy Cakes, and I'm a Biz Kid.

I was born in Havana, Cuba, and I came to the United States when I was six years old.

I love to bake Cuban desserts with my grandmother, such as flan and trés leche.

I decided that it would be fun to create a cupcake on a stick, just how there's ice cream on a stick, popsicles.

The stick that we use, they usually just throw away, and there's no need for that one.

I can just make the stick edible as well, and have a completely edible treat with no waste at the end.

Some of the flavors we have are... >> Here you go.

>> ...peanut butter... >> Yum.

>> ...strawberry... >> Ooh!

>> ...and red velvet.

We have the best ingredients used for Popsy Cakes and we always try to make it better and we are actually now working on making different types of Popsy Cakes to fit all of our customers' needs, such as the diet Popsy Cakes and a Popsy Cake for diabetics.

I have to know the population that I'm targeting.

Every customer is different, so I have to know what... what I'm up against.

I think a business plan is essential for any business to grow and expand properly because it just gives you a guideline of what you should be doing and a timeline.

They serve as a great tool to get you started.

Do you like it?

>> Mm!

>> Is the color good?

>> Mm!

It's perfect.

>> Yeah?

>> Mm!

>> You definitely need to conduct market research to see if people will like your products.

So I'm going to pass out these surveys, so you guys can give me some input on what you think of the new products.

It's easy to do market research.

All you have to do is get online and start researching just different key words that will take you to... to the product that you're trying to create.

I would like to make Popsy Cakes a global sensation.

I want to expand and have kiosks all over the country.

This is Craig.

He's our new Popsy Cakes president.

He's helping us expand the business.

We definitely need a business plan to work out the details.

>> Popsy Cakes!

>> Uh, sir, thank you very much for letting me make this presentation to you and your fellow venture capitalists.

Uh, I will admit I don't really have a clear idea or a reason for starting my business right now.

As a consequence, I don't really have a business plan or any thought about marketing.

Uh, not really sure who my customers would be or how I would manage the profits if I had any.

Uh, but that's why I thought I'd start with you first, sir, and see if you'd like to be a venture capitalist in my start-up and give me some money.

>> After hearing your presentation, what I think I would rather do is tear my money into little pieces, stick it in my pipe, and then light it and then smoke it!

>> So that's a "no?"

>> Neros, the time has come to discuss business matters.

>> Begin business matters discussion.

>> Discussion begun.

>> We have an idea for a lucrative product.

The mantis people of Kalgon-four will all want one of our enslavement lasers, but without a business plan our business will never lift off.

>> Yes, a plan will lead us to profits.

>> I suggest that we incorporate and get a business license.

>> Yes, incorporation will shield us from creditors, litigious liability, and Earth/ human projectile explosives.

>> Next, let us turn our discussion to the order of financing.

>> I have already obtained a loan from the First National Bank of Space.

>> Good.

We have the idea, we have the plan, we have the funding.

>> And I have contracted a factory of robot slaves as our labor force.

>> ( laughing ) Beware planet Earth humans, because in 50 hundred million years, your enslavement will be imminent.

( laughing ) >> ( laughing ) >> And now it's time for another Biz Kids Biz Quiz.

Okay, do we really need to do a quiz?

I mean, you want to start a business?

You need a good idea.

You got to figure out how to market that idea.

Can you make a profit?

How are you going to fund it?

And you put that into a plan.

Now get going-- go!

Start your business now!

>> Just because this is a crash course on starting a business doesn't mean that success is going to come crashing down on you.

>> For sure, starting a business is tough, and your company could fail.

>> But if done right, starting a business could be a great experience.

>> And a lot of fun.

You might even make a lot of profit.

>> You'll need a great idea that you love, a market, make a profit, fund the company, and put it all into a plan-- but look at the results.

>> ♪ Kaelon's Cookies.

>> Fresh Kaelon's Cookies, anyone?

Fresh Kaelon's Cookies, right here.

Only for one dollar each.

One dollar each.

>> Hmm, no.

>> Too much?

Okay, they're free.

They are free.

Yes, they are.

They're free.

Okay, easy, easy.

Hey, wow, hand me that tray back!

I need... hey, there's two more.

Who wants them?

>> Nah, nah, nah, nah.

>> ( speaking gibberish ) >> ( speaking gibberish ) >> ( speaking gibberish ) >> ( speaking gibberish ) >> ( speaking gibberish ) >> ( speaking gibberish ) >> Need some more bites of Biz?

>> Check out our Web site.

>> If you have your own business, we'd love to hear about it.

>> Plus, we have resources that can help you.

>> Just click on bizkids.com.

>> And let's get down to business.

>> Some Biz Kids business.

( metal guitar solo ) >> Production funding and educational outreach for Biz Kids is provided by a coalition of America's credit unions, where people are worth more than money.

A complete list of individual credit union funders is available at wxxi.org.

>> Every day, America's credit unions help members with their financial needs and with programs like Invest in America.

It's only fitting that credit unions support Biz Kids because financial education is what we do.

Learn more at lovemycreditunion.org.

Captioned by Media Access Group at WGBH access.wgbh.org