Elise Lorenzo, 15, has never paid a penny to the IRS - but she knows it's painful. So when the high school sophomore presents her business plan for an online art gallery called Envision Art to a panel of judges today, she will explain to them that it will be structured as an S Corporation, which will allow her to reflect company profits on her personal tax returns.
Lorenzo is one of 126 Miami-Dade high school students who have traded the dog days of summer vacation for a six-week course about the dog-eat-dog world of entrepreneurship.
Among the things Lorenzo has learned is that S Corporations make sense from a liability standpoint. And, she says, "Filing taxes once sounded better than facing double taxation."
Run by the National Foundation for Teaching Entrepreneurship, or NFTE, the program teaches students how to create a business plan - from startup costs to cash flow projections - and then pitch the idea to real world business people.
After surviving two rounds of cuts, 12 of the best plans, including Lorenzo's, will face-off today at the Macy's NFTE 2006 Business Plan Competition. One winner will go on to represent Florida at a national competition in New York in October and the chance to win $10,000 in prize money.
But the contest is about more than just the cash, said NFTE South Florida Executive Director Alice Horn.
Miami-Dade County has one of the highest dropout rates in the country. And a study by the Bill & Melinda Gates Foundation found - not surprisingly - that the "main, overriding factor is that students are bored and not engaged with school, " Horn said.
Owning a business has a way of breathing life into math and reading skills for many students, she said.
"Entrepreneurship makes education take on meaning and relevance, " she said.
A study by the Harvard Graduate School of Education found that students exposed to entrepreneurship classes are more interested in education, are more likely to go to college and more likely to engage in independent reading than their peers.
PROGRAM IN SCHOOLS Over the next two years, the NFTE program will be offered in about 20 schools in Miami-Dade and should reach about 3,400 middle and high school students. Some schools in Broward and Palm Beach counties are also offering the curriculum.
Stewart Merkin is a Miami business lawyer and one of the judges who helped pick the finalists for today's competition. Merkin said he pressed the students on insurance issues and questioned their salary and profit projections, just as he would older entrepreneurs.
NURTURING AMBITIONS The process has a way of nurturing those with true entrepreneurial ambitions and scaring off those who may not have realized how tough it can be to own a company.
"To learn - at this early of an age - that you don't want to run your own business is a valuable lesson too, " he said.
At 16, Steve Rodriguez knows he wants to be an engineer and go to MIT. But the last six weeks also have helped feed the entrepreneurship bug he says he inherited from his mother.
Rodriguez is making X-Paks, drawstring backpacks that can be produced in the shape and color the client wants.
Since starting the company about two weeks ago he's already sold two of the $20 packs, and he's received orders for others (the camouflage and jersey material sacks are popular). Rodriguez expects the existing sales and an innovative advertising program that includes viral word-of-mouth marketing will give him a leg up on the competition.
SHARING PROFITS If his plan has a weakness it's that he failed to nail down profit-sharing terms with his business partner - his mother, whose sewing operation will be making the backpacks.
"Now she says she wants 50 percent of the profits, " he says. "We should have signed a contract."
TEACHING ENTREPRENEURSHIP
For more information about The National Foundation for Teaching Entrepreneurship, visit www.nfte.com. For details about the local NFTE program, contact southflorida@nfte.com.
