Entrepreneurship · Lesson Plan

Starting a Business: How Much Will It Cost?

Before launching a business, you have to know what it will cost — or you can’t set a price that earns a profit. This lesson teaches the cost side of the profit equation: the difference between fixed costs (rent, insurance) and variable costs (materials that rise with output), how to total them, and how cost drives pricing. Students calculate the costs of a sample business and find the price needed to profit.

Grades 9–12 Lesson Plan 45–60 minutes Free Lesson Plan Lesson & Worksheet: Full Membership

Starting a business cost lesson illustration

For Teachers

Lesson at a glance

Topic: Entrepreneurship
Grade Level: Grades 9–12
Resource Type: Lesson + Worksheet
Estimated Time: 45–60 minutes
Format: Lesson + worksheet
Materials: Printable lesson, activity sheet, pencils

What Students Learn

Learning objectives

Define profit as revenue minus costs
Distinguish fixed costs from variable costs
Total the costs of running a business
Explain how costs determine a profitable price
Calculate costs and price for a sample business

Materials

What you’ll need

Printed lesson and worksheet (one per student)
Calculator
Pencils

Key Terms

Vocabulary

Profit: The money left after costs are paid.
Fixed cost: A cost that stays the same no matter how much you produce.
Variable cost: A cost that rises and falls with how much you produce.
Revenue: The money customers pay for a product or service.
Pricing: Setting the price that covers cost and earns a profit.
Break-even: The point where revenue exactly covers costs.

For Teachers

Lesson plan

Estimated time: one 45–60 minute class period.

Lesson sequence

Profit = revenue − costs (10 min). Why you must know costs before pricing.
Fixed vs. variable (15 min). Sort real costs into the two types.
Total it up (10 min). Add fixed and variable costs for a sample business.
Worksheet (13 min). Students calculate costs and the price needed to profit.

Assessment

Assess the worksheet for correct cost classification, totals, and a price that earns a profit.

Discussion

Discussion questions

What is profit, and how do you calculate it?
How do fixed costs differ from variable costs?
Why must you know your costs before you set a price?
Give an example of a fixed cost and a variable cost.
How would you price a product to make a profit?

Printable Lesson & Activity