SERIES: Entrepreneurship and Innovation

S1-S3

60–90 minutes

The Numbers Behind a Business

A business can sound exciting and still fail financially. Simple modelling helps founders understand how price, costs and sales interact before money is committed. You will calculate revenue and profit, build a break-even model, test different scenarios and explain the financial logic behind your idea. By the end of this challenge you will: Distinguish […]

The Numbers Behind a Business

Your Mission

Put real numbers underneath your business model and find out which assumptions could make or break it.

You will calculate revenue and profit, distinguish cost types, build a break-even model and justify a pricing decision.

The Shape of This Challenge

Discover

✏️ ️ Notice & question

Explore

️ Investigate & test

Create

✏️ Make & communicate

Reflect

️ Think & apply

Discover

Start with the financial basics and make every assumption visible.

Step 1

Revenue Is Not Profit

✏️ Calculate + explain · 8–10 mins

We are learning to distinguish price, revenue, costs and profit.

A business can sell a lot and still lose money. Start with the four numbers every simple model needs.

Your Task

Write the formulas Revenue = Price × Quantity and Profit = Revenue − Total Costs.
Use an example selling 100 items at £8 each with £500 total costs.
Calculate revenue and profit.
Explain why doubling sales does not automatically double profit.

I can calculate revenue and profit and explain the difference.

→ This gives you the financial language for the rest of the challenge.

Critical ThinkingNumeracyEntrepreneurship

Step 2

Fixed Costs and Unit Costs

️ Sort + model · 8–10 mins

We are learning to distinguish costs that change with sales from costs that exist anyway.

Knowing how costs behave helps a founder understand what happens when sales rise or fall.

Your Task

Sort examples into fixed and variable/unit costs: website subscription, raw material per item, monthly rent, payment fee per sale, insurance, packaging.
Choose likely fixed and unit costs for your business idea.
Estimate one realistic figure for each.
Mark every figure that is an estimate rather than known data.

I can distinguish fixed and variable costs and keep estimates visible.

→ This creates the inputs for your break-even model.

Critical ThinkingNumeracyEntrepreneurship

Explore

Build a simple model and stress-test the numbers rather than trusting one forecast.

Step 3

Build a Simple Break-Even Model

Spreadsheet route · 12–15 mins

We are learning to use a spreadsheet or table to test how price, costs and sales interact.

Break-even is the point where total revenue covers total costs. It is a useful planning tool, not a guarantee of demand.

Your Task

Enter price, unit cost and fixed costs for your idea.
Calculate contribution per sale: Price − Unit Cost.
Estimate break-even units: Fixed Costs ÷ Contribution per Sale.
Test what happens if price falls 10% or unit cost rises 20%.

⚡ Quick Track

Use a simple table or spreadsheet with one scenario. Label every estimate clearly and calculate break-even units.

Dig Deeper

Build three scenarios — cautious, expected and optimistic — with different sales or cost assumptions. Compare profit/loss and explain which assumption matters most.

I can build and interpret a simple break-even model.

→ This gives you evidence about whether the current numbers are workable.

Problem SolvingNumeracySpreadsheet Skills

Step 4

Price Is a Decision, Not Just a Calculation

️ Trade-off challenge · 10–12 mins

We are learning to evaluate pricing using customer value, costs and business goals.

The cheapest price is not automatically best for the customer or the business.

Your Task

Choose three possible prices for your idea.
For each, calculate or estimate contribution per sale.
Write one customer advantage and one business risk for each price.
Choose a price and explain what evidence you would want before using it.

I can justify a price using both financial logic and customer considerations.

→ This becomes the pricing decision in your final numbers briefing.

Critical ThinkingEntrepreneurshipProblem Solving

Create & Share

Turn the numbers into a concise briefing ready for your final pitch.

Step 5

Create a Business Numbers Brief

✏️ Model · Create · 25–35 mins

We are learning to communicate the key financial assumptions behind a simple business model.

Your final piece should make the assumptions visible so somebody else can challenge them.

Your Task

Include price, unit cost, fixed costs and break-even units.
Show one expected sales scenario and resulting revenue/profit or loss.
Include one sensitivity test from Step 3.
State the biggest financial uncertainty.
Choose one output below.

Business Numbers Sheet

1 page · key calculations + 150–200 words

⏱ 25–30 mins

Show price, costs, break-even, one scenario and biggest uncertainty.

Finance Briefing

4 slides · maximum 30 words per slide

⏱ 30–35 mins

Explain the model, break-even, sensitivity test and financial risk.

Mini Financial Dashboard

1 page · spreadsheet/chart + short commentary

⏱ 30–35 mins

Present the key numbers visually and explain what founders should watch.

I can create a clear financial model and explain its biggest assumption.

→ This is your finished mission output.

Critical ThinkingProblem SolvingEntrepreneurship

Step 6

Reflect, Apply, Look Forward

️ Think or discuss · 5–8 mins

We are learning to reflect on how financial modelling changes business decisions.

The final challenge asks you to pitch the business. A credible pitch uses numbers as evidence, not decoration.

Your Task

Answer the three prompts.
Name the assumption that affects your numbers most.
Write the one financial question you expect a sceptical listener to ask.

Reflect

Which number changed your view of the idea most?

Apply

Where could simple scenario modelling help you make a real spending or project decision?

Look Forward

How could AI assist with financial modelling while still requiring humans to check assumptions and calculations?

I can explain how financial assumptions influence pricing, risk and business decisions.

→ You now have the numbers needed for a credible final pitch.

ReflectionCritical ThinkingEntrepreneurship

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TOOLKIT

Choose Your Tools

Use the tools available to you. Strong thinking matters more than a particular app.

Calculate

Use a spreadsheet or calculator to model price, unit cost, fixed cost, revenue and break-even. Keep assumptions visible.

Research

Use realistic public prices or supplier estimates where appropriate, but label estimates clearly.

Create

Use a one-page numbers sheet, spreadsheet dashboard, slides or a short finance briefing.

Educator / Parent Notes

Age, Stage and Prior Learning: Designed for S1–S3. Keep the mathematics simple and connected to a meaningful business idea.

Before You Start: Use rounded, plausible numbers. Make clear that break-even is a model based on assumptions and does not predict customer demand.

How to Open This: Ask: “If I sell £1,000 worth of products, how much have I made?” Use the ambiguity to separate revenue from profit.

Scheduling: Steps 1–4 need 35–45 minutes; Step 5 needs 25–35 minutes.

If a Pupil Gets Stuck: Provide a worked spreadsheet/template with price, unit cost and fixed cost cells. Use one scenario only.

For Fast Finishers: Ask learners to model three scenarios or explore how subscription, commission or service pricing changes the numbers.

Marking Guidance: Look for correct calculations, visible assumptions, correct break-even interpretation, meaningful sensitivity testing and a pricing choice that considers both customer and business.

The Numbers Behind a Business

The Numbers Behind a Business

Discover

Revenue Is Not Profit

Fixed Costs and Unit Costs

Explore

Build a Simple Break-Even Model

Price Is a Decision, Not Just a Calculation

Create & Share

Create a Business Numbers Brief

Reflect, Apply, Look Forward

Show What You Have Learned

Calculate

Research

Create

Show What You Have Learned

Calculate

Research

Create

TOOLKIT

Calculate

Research

Create

Educator / Parent Notes

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