PHASE 2: UNITE

Detailed Instructions

Week 3

Overview

In this Phase, students will pitch their ideas and vote on a product/service then begin to develop their business plan and determine venture funding.

Note on Agenda Timing

There is flexibility around the agenda items – do not feel the need to cover all items in one week. For example, if your team needs the whole session to complete the idea pitches, you can move the other items to the following week. If your team needs more time to brainstorm their ideas, you can also opt to continue the process and push your idea pitches back.

If you are pushing agenda items back, please make sure that your team completes its product/service selection by end of Week 4. 

Objectives

 

Mentor Preparation

 

 Please note that anywhere this icon is shown, resources have been adapted for the virtual Company Program. 

Agenda 

1. Attendance (5 min)
   
2. Business Ethics & Test of Disclosure (5 minutes) OPTIONAL
3. Snake Oil – Ice Breaker (15 min) 
   
4. Idea Pitches (45 min)
5. Business Model Canvas (45 min) (IF TIME PERMITS) 
   
6. Mission Statement (10 min) (IF TIME PERMITS)
   
7. Venture Funding (25 min) (IF TIME PERMITS)
   
8. Wrap Up (5 min)

 

Activities

 1. Attendance (5 min)

• Ask students/groups to email advisors in advance their completed Research Assignments as this will determine the number of pitches that are going to proceed.

2. Business Ethics & Test of Disclosure (5 min) (OPTIONAL)

Review the JA Company Code of Ethics Slide Deck with the students. The goal of this section is to help students:

• Define Business Ethics and why it is important

• Provide students with two ways they can use to make decisions: Test of Disclosure or P.L.U.S.

Please note: Students are not required to come up with their own “Code of Ethics”. They are required to understand that the role ethics plays in their company decisions and adhere to using the Test of Disclosure and/or P.L.U.S. model in their decision making. They will sign off on this agreement as part of their employee handbook and Code of Ethics Employee Agreement. 

      3. Snake Oil – Ice Breaker (15 min)  Slides 58-66) 

• Read through the Snake Oil Activity and deliver the activity using the slides.

      4. Idea Pitches (45 min) Slide 67

• Explain that participants will now present their pitches that they prepared at home, and, the group will vote on the product/service idea that will be used moving forward. Reminder: only groups/individuals with fully formed and researched ideas will pitch.
  
• Before the pitches, thank everyone that put time into developing an idea. Remind the group that every idea has value and respect should be displayed. 
• Review the criteria for judging with the group.
• Number students/groups and then draw a number to announce who will pitch. 
• Keep the time limit to a maximum of 1 minute for each pitch. Questions are allowed after the pitches but keep them to a minimum.
• Email and distribute the Pitch Evaluation Criteria worksheet in advance to students. Ask students to listen to each pitch before recording points. Once they have completed the scoring, they can enter their votes anonymously using an online voting tool suggested by your charter (suggested options will be emailed out)
• Mentors will review scores and narrow down to the top 2-3 products. To determine the final idea, lead the group in an open pros and cons discussion about the top 2-3 chosen products/services. This will allow them to explore in more details the viability of the product/service and identify potential challenges. Once the discussion is done, the group can do a show of hands for the products/services or judge again using another method.

      5. Business Model Canvas (45 min)  Slides 68-76  

*AGENDA NOTE* You can move this to the week following idea pitches if you run out of time. 

• Start this activity by having a discussion about why companies are successful. Are goals and strategy important? Why?
• Bring students back to the concept of SMART goals explored in Week 2. 
• Explain that in order to be successful, they must put some time into planning. Together they will complete a Business Model Canvas. The Business Model Canvas will give them the structure of a business plan and fundamentally delivers three things:

1. Focus: everyone will be on the same page
2. Flexibility: easy to tweak the model and try new things
3. Transparency: the team will have an easier time understanding the business model 

• Just like any other business, tell them that ensuring that their product/service and company are successful requires a process of evaluation throughout their operations. Discuss the concept from lean business startup called “Build-Measure-Learn” (Slides 69-76). Ask the students, how could we apply this process to our company? What questions in the “Measure” section could we ask based on the product/service we’ve chosen?
• Watch the Business Model Canvas – The Lean Playbook (slide 76) video on the JA Canada Resource Portal with students to understand the 9 segments of the Business Model Canvas.
• Help students begin to complete their 2.1.041 Business Model Canvas. This can be done using the fillable form on the portal or using MURAL. Students will have an opportunity to complete this in Phase 3.
• Option: Divide up the sections so students can work on it in smaller groups. At your next session, each group can present their sections to the team. 

• Other videos available:

• Other resources available: 

1. http://www.alexandercowan.com/business-model-canvas-templates
   
2. http://venturebeat.com/2015/05/06/build-measure-learn-doesnt-mean-throwing-things-against-the-wall-to-see-if-they-stick

       7. Company Mission (30 min) Slide 77 

*AGENDA NOTE* You can move this to the week following idea pitches if you run out of time. 

• Now that a product/service has been chosen, it is time to think about the Company Mission, Goals and Vision
• Your company’s mission statement is your opportunity to define the company’s goals, ethics, culture, and norms for decision-making. The best mission statements define a company’s goals in at least three dimensions: what the company does for its customers, what it does for its employees, and what it does for its owners. Other mission statements also include what the company does for its community and for the world.
• Facilitate a discussion using the following questions:
• “Who” is your company?
• What do you do? What do you stand for? And why do you do it?
• Do you want to make a profit, or is it enough to just make a living?
• What markets are you serving, and what benefits do you offer them?
• Do you solve a problem for your customers?
• What kind of internal work environment do you want for your employees?
• Use a whiteboard tool or shared doc to take down the group's ideas. In Phase 3, the President will use these notes to finalize the Mission Statement Template.

     8. Venture Funding (25 min) Slides 78-87

*AGENDA NOTE* You can move this to the week following idea pitches if you run out of time. 

• Now that the product(s) or service(s) have been chosen it is time for the group to determine their capitalization needs.
• JA Companies typically gain start-up funding through the sale of shares. 
• Initial share value can be between $5.00 and a maximum $25.00. 
• Companies may choose to sell common shares only or both common and preferred shares. 
• Common Shares - Participate in the profit share of the company and entitle the holder to voting privileges. The purchase price is set by the Company; value at liquidation will depend on profitability of the company. 
• Preferred Shares - Do not participate in the profit share or have voting privileges. Such shares should be treated as a company expense and the face value (determined by the Company) plus dividend (20%) must be paid at liquidation. These shareholders will be paid out first during company liquidation.
• Each company member must purchase a common share in the company to be an active company member with voting privileges. Members can also purchase one additional preferred share. If there are circumstances which would prevent a participant from purchasing a share they should speak with their mentor team and/or Company Program Manager to make alternate arrangements. Such conversations will be held in strictest confidence. 
• Companies must complete the Capitalization Requirements exercise to determine the funding needed for start-up. Prior to this, they must complete their break-even analysis.
• Refer to the product/service cost, break even and pricing tools provided by your program manager to determine these numbers. 
• Teams should factor in the Fixed Costs into the expenses - this year the Fixed Costs is set at $150 split into two instalments. 
• Teams who make a profit of $500 or more at the end of the year will also be required to pay a Sales Profits tax of 10%. 
• The process outlining how to submit your fixed costs and sales tax to JA is outlined here. 
• Companies should avoid over or under capitalization. Each company can raise a maximum of $25 per share X number of students in the company (for example, if your team has 20 students, that max common share will be $500) 
• Example: If you have 20 students in your program, your max amount for common shares is $500 ($25 X 20 students = $500); If you had 15 students in your program, your max amount for common shares is $375 ($25 X 15 students = $375)
  
• If the capital requirements exceed the revenue from the common share purchase, companies may choose to offer preferred shares to individuals outside the company membership (this may include volunteer mentors). The Company must vote to issue preferred shares and a majority must be in favour. Teams can raise an additional $300 maximum in preferred shares.
• If additional start-up funding is required beyond the maximum indicated here, the company must contact the Program Manager to obtain approval. 
• No single individual should own more than one common share and one preferred share in any one JA Company. Shares are non-transferable and non-legal. It is important to review the ethics behind buying another member’s share and not telling anyone you have done so. This does not pass the Test of Disclosure attached to the Code of Ethics (Would everyone be okay with the decision you are making?) 
• What happens if a participant leaves the Company Program after purchasing a common share? The company should decide and agree on what the policy is for a participant who leaves the program and include the agreement in their Employee Handbook and Company By-Laws.

• Option 1: If a participant leaves the Company Program after purchasing a common share, that share will become a preferred share, payable at year-end with dividend.

  Option 2: If a participant leaves the Company Program after purchasing a common share, they forfeit their share money and are not entitled to profit-sharing or year-end dividend.

• It is essential that complete and accurate shareholder records are maintained. The full name, mailing address, email address and phone number for all shareholders must be recorded.

• More information about venture funding is outlined here. 

Please refer to the process on setting up a bank account. Once the account has been set up, students should be encouraged to e-transfer their share money.

• Other means of funding:

Teams may be permitted to seek out in-kind opportunities for their company.

 Appropriate “services in-kind” should not exceed a total of $300.

 Examples include:

i. Services in Kind: i.e. print/media company providing services in-kind to a team for printing, marketing or design services.

ii. Coupons: Teams have struck a deal with companies to get digital coupons from a retailer to include with their product.

iii. Raw materials: Students have gathered raw materials for free or at cost from a supplier.

In-kind sponsorship needs to be acknowledged by the JA Company on print and digital materials and students must inform JA all sponsorship deals. 

If you have any questions or are unsure if an activity your team is engaged in falls into this category, please contact JA before proceeding.

      9. Wrap-Up (5 min)

• Remind students to complete incomplete tasks, to review progress and of what to prepare for the next meeting. 

Small Group Sessions: If time permits, host your small group sessions and check in on your students. Some may feel disappointed that their idea did not get chosen. Remind them of what you talked about in your first session:

a. It is important that everyone stands behind their product or service since each member of the company will be responsible for promoting it and selling it.
b. Some students start JA Company Program with ideas for the businesses they want to create. Make sure students understand that a company must agree on a product or service, and some ideas will not be chosen. This doesn’t mean they are bad ideas; they may simply have to wait for another time. Finding the right business idea is really important to the success of the student company.

Next Steps

Students:

• If the capitalization is complete and the bank account has been set up, share the process for e-transfer and encourage students to start sending in their share money before your next meeting.

Mentors:

• Get ready for the executive team selection and ensure you know who will be running and that everyone is clear on the process. 

Student Management Training:

• Saturday, November 27 - details to be announced