7313 miles away from home, 8 hours time difference, and a long 27 hours flight across continents I arrived to my final destination, Vanderbilt University. I came here filled with aspirations for an enlightening educational journey. After all, Vanderbilt prides itself for being ranked amongst the top universities in the country with a notable 14th place in the United States. “Expecting the exceptional” was expectable. However, to my surprise, my first assignment in the United States’ 7th best Graduate School of Education was a bake sale! WHAT? Is this what I crossed continents for? I am doing a bake sale for GRAD SCHOOL? I was both astounded and amused.
The class was divided into teams to have a charitable bake sale, and the class collectively decided that the winning team will be determined based on profit margin. I was teamed up with three other students and we each came up with a product and a budget for the Bake Sale assignment. Not having been exposed to a Bake Sale in my life, I had the advantage of ignorance! I was not limited to the typical muffins, brownies and cupcakes, simply because I didn’t know any better! My proposed product was a Waffle Pop – an arguably delicious, chocolate-dripping, waffle on a stick. The team was quick to jump on the idea after sort of objectively assessing how it can appeal to undergrad students and standout in relation to the other 5 teams’ products. We also selected a charity that the bake sale profits will go to. Let me give you a hindsight insight and tell you that all those early stage decisions played a key role in our bake sale results, which leads to my first insight: [ Insight 1: Make the right choice ]
Later on, each of my team members came up with a waffle budget. With some background from the class readings, that was a piece of… waffle. The class readings included several articles and books like The Accounting Game: Basic Accounting Fresh from the Lemonade Stand (hence, the Bake Sale assignment), Financial Intelligence for Entrepreneurs, and Running Lean: Iterate from Plan A to a Plan That Works, which gave us a holistic understanding of bigger-picture business strategy and financing. Comparing our budgets, we were able to identify the cheapest ingredients. Everyone loves a bueno, bonito, y barato bargain, right? Well honestly, we were not bothered to run across different supermarkets to get the ingredients, but after running a quick analysis we had found that minor cost differences can immensely affect our profit margin. Our choice of waffle mix will also determine how many waffle pops we will be able to make and consequently our revenue. Using numerical data and objective decision matrices helped us to refine our product in comparison to our overall goal – win the competition by having the highest percentage of profit. How many waffles should we make for optimum results? Is spending more for a better product going to generate a substantial increase in profit? How much can we spend on marketing and other fixed costs without risking our profit margin? We were able to objectively answer these questions through our matrices and analyses. [ Insight 2: Make the choice right ]
On the bake sale day, we spent the morning making waffles! Using a smaller waffle maker enabled us to make more waffles and we got 44 waffle pops in total. We had our made-with-love waffles and designed waffle stand ready. Students were happy to contribute to our charitable cause – in fact, many students donated without asking for a waffle pop, which meant cost-free revenue (AKA sweet sweet profit). Having our audience in mind, we recognized that students might not have cash in hand, so we set up a venmo account that contributed to 76% of our profits! That’s a well-thought of strategy, baby! [ Insight 3: Choose the right tools ]
The waffle sale went really well, and my team won! Wohoo! While other teams made $25 on average, our waffles made a remarkable $442.56 of sweet, sweet, profit and a 97% profit margin. Back in the classroom, our professor pointed out an important point and I consider this our most important insight of the bake sale. All our choices were driven by increasing the profit margin, where the objective of our bake sale was to bring back our charities some sweet, sweet, profit. This means that our driving goal should have been the number of sweet dollars that are going to charity instead of the profit margin. [ Vital Insight – is what you’re tracking relevant to your overall goal? ]
Just like a waffle bake sale, business is full of choices. It is vital to make the right choices and analyze the tough decisions. What is even more compelling is choosing the right metrics to track. Those metrics need to be directly and clearly relevant to your organizational goal, otherwise, you might be making your best efforts but your best efforts are not necessarily driving the organization’s best results. In the end, I learned a waffle lot from this bake sale!