How we try to teach our kids about money by baking cookies together

"There's something we need to discuss. Feline is asking about an allowance.", Marjolein says while we're enjoying our night out. We both felt that just handing our kids some money does not convey the right lesson. During the Summer our kids spent a day on the street selling lemonade. They did really well also because it was a very hot Summer day. Lots of people stopped over for a quick refreshment and our kids made over 13 euro.

After some brainstorming we came up with the online, winter version of the lemonade stand. We decided to sell homemade cookies online. We spent one weekend setting it up. Here's how we did it.

Step 1 - Explaining the idea to the kids

We first wanted to make sure Feline (6) and Phillip (5) would be up for it. The last weeks Feline had walked around with a clipboard to check things off. She probably learned something about task lists in school. We sat down and discussed the idea as a list of tasks. She likes it and since Philip likes to do whatever Feline does, it's not hard to convince them.

Also, during the brainstorm we decided that it would be fun to let them record a Youtube video. This seals the deal for Philip and Feline as they enjoy watching Youtube videos of other kids doing stuff. (Later they would show some 'stage freight' when we actually had to record the video).

The conversation about the Youtube video makes them realise we need a website and that we need to tell the people we know about the website and the Youtube video. This completes our task list:

• Get ingredients
• Make the dough
• Bake cookies
• Make a website
• Make videos
• Make pictures
• Post the video on Youtube
• Send a Whatsapp message to the family

Step 2 - Decide on the right price

We also calculated jointly what it would cost to bake and ship the cookies. This turns out to be quite expensive, particularly the shipping cost and the butter. Feline and Philip want to make 10 euro each. We want to sell 10 boxes to make that margin.

We decide to sell the cookies at a price of 6 euro per 10 cookies. The margin would be 1 euro, this would be a great allowance per box sold. The right price for a reasonable margin would be 7 euro, but we (oh wise parents) decided to double their income on each box sold.

Finally, we went over a business model canvas, because... well... that's my expertise and Feline enjoys checking things off. The kids come up with a very plausible and simple business model:

Feline comes up with a nice observation when we discuss the value proposition and customer segment. She thinks her great grandfather would appreciate the service as it would save him time going to the store to buy cookies. Mom and dad are identified as key partners.

Step 3 - Baking and building time

Now it's time to bake a first batch of cookies, snap video and photo material, build a website etc. We decide to go 'lean' here and not bake 10x10 cookies yet. We'll bake ±20 cookies and this allows us to generate the needed content for the website. Here they are in action:

We also jointly build the website. We use Airstrip for it and attach it to GoMonthly for collecting payments. It took an hour to build it and hook it up to a payment provider. Koekjesservice.nl is live. However, we do have to wait a while before the payment provider clears and validates our account.

Step 4 - Recording the Youtube video

This was the most fun and surprising part of the project. I was expecting a walk in the park here as Feline and Philip enacted Youtube videos of others. Yet, once 'on air' this turns out to be something they find a bit scary and exciting. The first shots were not that promising and we decide to pause for a day. After leaving them be for a while, we all give it another shot and produced the video. Here is the result (in Dutch):

We're ready to start selling. If only the payment provider would approve us. This turns out be the longest wait during the project.

Step 5 - Let the sale begin!

Once we uploaded the video and launched the website, we send a few Whatsapp messages to our friends and family. We sold 5 boxes in the past week. We spent another day in the next weeked baking more cookie, putting them in boxes and shipping them.

One customer lives close to our home, so we decided to deliver the cookies in person, which is a great way to encourage some interaction with the customers.

Lessons learned

It was a fun project and our kids are learning about money as we speak. Our first lesson learned is that our usual suspects - our grand parents - find the 6 euro too much. They work around the shipping system and buy the cookies in cash.

Another lesson is that actually boxing and shipping the cookies in such a way that we have some assurance that they arrive in one piece is rather difficult.

A third lesson is that some people request for the ability to gift the cookies through a coupon or gift card. We generate promo codes and add a form to the website to redeem the coupons. This adds another job to the list which our kids can execute to earn money.

Overall we enjoyed this project very much. Feline and Philip already received their first profits and have added it to their piggy bank.