Starting a business is an exciting but challenging endeavor. Entrepreneurs must carefully balance costs, pricing, and revenue strategies to ensure their business is profitable. Many startups fail within the first few years because they underestimate costs, set unsustainable prices, or struggle to attract customers. This project challenges students to conduct an experiment simulating the financial decision-making process of running a startup, analyzing cost structures, revenue generation, and profit calculations.

Students will simulate launching a small business—such as a café, online retail store, or local service provider—and track their financial decisions. They must determine fixed costs (rent, equipment, salaries) and variable costs (raw materials, packaging, marketing) while setting product prices to maximize profitability without driving away customers. Using hypothetical data, students will adjust their pricing, marketing, and operational strategies to see how small changes affect their profit margin.

A key part of this experiment is understanding break-even analysis—the point where revenue equals total costs. Students should calculate how many units they need to sell to cover expenses and start making a profit. Additionally, they should explore real-world startup case studies, analyzing why some succeed while others fail. They should consider how businesses adapt their cost and revenue models in response to competition and market conditions.

The final report will summarize financial decisions, experimental findings, and key insights about profitability. The goal is for students to apply economic concepts to real-world business challenges and learn how strategic pricing, cost control, and revenue forecasting impact business success.