Entrepreneurship · Lesson Plan

Is My Business Successful?

Lots of customers doesn’t always mean a successful business. This lesson teaches students to measure success the right way — gross profit, net profit, and percent profit margin — by working through Jennifer’s ice-cream business. Students compute her daily revenue, costs, and net profit, find her profit margin, and brainstorm concrete ways to increase it.

Grades 6–9 Lesson Plan 45–60 minutes Free Lesson Plan Lesson & Worksheet: Full Membership

Is my business successful lesson illustration

For Teachers

Lesson at a glance

Topic: Entrepreneurship
Grade Level: Grades 6–9
Resource Type: Lesson + Worksheet
Estimated Time: 45–60 minutes
Format: Lesson + worksheet
Materials: Printable lesson, activity sheet, whiteboard

What Students Learn

Learning objectives

Explain why customer count alone doesn’t measure success
Calculate gross profit
Calculate net profit by subtracting costs
Find the percent profit margin
Suggest ways to increase net profit

Materials

What you’ll need

Printed lesson and worksheet (one per student)
Calculator
Pencils
Whiteboard

Key Terms

Vocabulary

Gross profit: Total income before subtracting costs.
Net profit: Gross profit minus the costs of doing business.
Costs: What a business spends to produce and sell its goods.
Profit margin: Net profit divided by costs, as a percent.
Revenue: Total money taken in from sales.
Break-even: When revenue exactly covers costs.

For Teachers

Lesson plan

Estimated time: one 45–60 minute class period.

Lesson sequence

What is success? (8 min). Discuss why customer count and items sold aren’t enough.
Gross vs. net (15 min). Work Jennifer’s ice-cream numbers: daily revenue, costs, gross profit, net profit.
Profit margin (12 min). Compute the percent profit margin and interpret it.
Improve it (10 min). Students brainstorm ways to raise net profit (price, costs, supplier).

Assessment

Assess the worksheet for correct gross/net profit and profit-margin calculations.

Discussion

Discussion questions

Why isn’t a high customer count proof of success?
What is the difference between gross and net profit?
How do you calculate a profit margin?
What does Jennifer’s profit margin tell you about her business?
What are three ways to increase net profit?

Printable Lesson & Activity