This kids' company made a profit this year

Fonzi's Floats isn't among Fortune magazine's listing of the 500 largest U.S. companies. But, the local, kid-operated company did earn a profit this year.

Seventeen-year-old Chris Peterson was the president of Fonzi's Floats. It's one of the Junior Achievement-backed companies at Marquette High School in St. Louis County.

Junior Achievement of Mississippi Valley, Inc., helps kids set up and operate their own companies. Companies can be both in-school and after-school operations. JA's goal is to help kids get practical experience on how to organize and run their own companies.

(For more information, see the JA website at www.ja.org. Also, to learn how younger kids can prepare for joining a JA company, see sidebar below.)

Three years ago, when Chris was a middle-schooler, he got his first taste of what it takes to set up a business. At that time, he helped his dad, Gary, who was opening his own Edward Jones brokerage office.

This year, as a high school junior, he was picked as president by fellow students in Teacher Pam Freiberg's business-management class at Marquette.

Under the JA model, Chris and his team started by developing a business plan. First, they did lots of brainstorming about what product to make. They looked at lots of ideas but focused mostly on food. That's because kids like to eat.

They finally decided on ice cream floats. They would be sold just as kids left school at the end of the day. They decided on the name Fonzi because of name recognition.

Fonzi was a character on TV's "Happy Days." The name went well with "float."

Chris said the company had to check prices of ingredients, wages to pay servers and other costs to determine the price.

"We also had to decide what price kids would pay." he said. They finally agreed on $2.

The company offered floats in three flavors: root beer, strawberry and orange. But, the orange-flavored ones didn't sell well. Midway through the four-week selling period, they dropped orange in favor of Code Red, the new Mountain Dew flavor.

Overall, root beer was the top seller.

As the semester neared the end, the company held a "liquidation sale" to make sure they used up all their inventory of ice cream, soda and cups.

"We lowered our price to $1 to get rid of all our assets. We moved a lot more sales but of course didn't make as much profit per sale," he said.

Seventeen-year-old Ryan Crowley was on the finance team for the company. That team was responsible for allocating ownership shares, counting the receipts and paying bills.

He said, "We only had 20 or 30 minutes for sales after classes ended. Not many people stay after that because the buses are leaving."

He said they decided to use Vess sodas because they "were pretty cheap."

Seventeen-year-old Eric Schmidt was on the production team. These kids had to plan how to make the floats quickly to allow for the most sales in the shortest time.

"Before classes ended, we'd line up 20 cups for each flavor with a scoop of ice cream already in each cup. Then, we'd pour in the soda when the order came in," Eric said.

He also said by pouring the soda over the ice cream the float had a nice foam top. It also meant the company used less soda for each float.

Eric said he'd had some business experience because he works in his father's machine shop. He said he plans to go into business with his dad when he finishes school.

Seventeen-year-old Christy DeVinney was on the company's marketing team. They produced ads for the school's TV system, sent out flyers and also e-mailed reminders to teachers. The team also made posters and banners to mark their selling tables.

Asked about what she liked best about the experience, she said, "I learned a lot about how to make advertising look good." Asked about her worst experience, she said, "Not agreeing with people about how the ads should look."

There were 22 kids on the Fonzi's Float team. They each invested $2 to get the company started. When the company liquidated, each investor got back $5.99.

That was after covering all expenses, including a salary for company officers like president Peterson. He got $l.50 per week. The clerks at the stand earned 50 cents an hour.

There was even a provision for taxes. That didn't go to the government. Rather, it was paid to the JA organization, which put the money into its continuing scholarship program.

JA offers enterprise class for younger kids St. Louis-area kids in both Missouri and Illinois can get a taste of the Junior Achievement program before they get to high school. JA of Mississippi Valley, Inc., offers an Enterprise in Action class for younger kids. The class explores as many as 10 different activities that explain our private enterprise system. Among the topics are "Consumers and Business in the Free Enterprise System," "Organizing a Business" and "Product Pricing." If you want to learn more about these enterprise classes, visit the Junior Achievement website at www.ja.org. Of you could call Sara Ferguson, the education manager of JA of Mississippi Valley, Inc., at (314) 731-4000.