Counting the Cost

Teacher Facilitation Guide

Lesson 2 of 5

Duration: 60 Minutes

Lesson Goal

Students will move beyond "revenue" to "profit." They will learn to identify hidden startup and operational costs and calculate exactly how many sales or hours are required to reach their break-even point.

Key Vocabulary

• Startup Costs (One-time)
• Operating Expenses (Recurring)
• Break-Even Point
• Gross vs. Net Revenue
• Depreciation
• Margin

Materials Needed

Counting Costs Slide Deck
Break-Even Worksheet
Calculators

Instructional Flow

Hook

10 MINS

The Ride-Share Reality

Present the "Ride-Share Case Study" (on slide deck). Students see a driver who made $1,000 in a week. Ask: "Is this a good week?" Then reveal the hidden costs: $200 gas, $100 insurance surcharge, $250 vehicle depreciation/maintenance, $50 platform fee.

Debrief: The driver actually kept $400 for 40 hours of work. That's $10/hour before taxes.

Intro

15 MINS

Startup vs. Overhead

Define Startup Costs (one-time items needed to begin, like a lawnmower or a website domain) and Operating Expenses (recurring costs to stay in business, like monthly software or supplies). Introduce the Break-Even formula: Total Startup Costs / Profit per Unit = Units to Break Even.

Practice

35 MINS

Building the Budget

Students use the Break-Even Worksheet to research and list the specific costs for the side hustle concept they chose in Lesson 1. They must use the internet to find real prices for equipment and software.

Common Student Pitfalls

Ignoring "Small" Fees:

Students often forget transaction fees (Stripe/PayPal), platform fees (Etsy/Fiverr), or packaging/shipping costs.

Underestimating Supplies:

If they are cleaning houses, they often forget the cost of replacing sponges, detergent, and gloves monthly.

The Break-Even Logic

Explain the logic using this script:

"Imagine you spend $200 on a pressure washer. You charge $50 per driveway. If it costs you $10 in gas and soap for each driveway, you make $40 profit per job. You need to do 5 driveways just to pay back your $200. Driveway #6 is the first time you actually put money in your pocket."

Checklist for Teacher Check-ins:

Did they include a marketing budget (ads, flyers)?
Have they researched the actual price of their equipment?
Are they charging enough to cover recurring supplies?

Exit Ticket Question

"If you lower your price to beat the competition, what happens to your break-even point? Why might this be dangerous for a new business?"

Counting the Cost

Counting Costs Teacher Guide

Counting Costs Worksheet

Counting Costs Slides