Working with the kids at Ogden was an incredible learning experience. We got kids behind the counter, into legitimate work, and showed them that there was a possibility beyond working the streets. While they made considerably less money, they made legitimate money -- something they eagerly wanted. They had no fear of police raids, prison, or violence from rivals while working at Jersey Mikes. We had our ups and downs, and ultimately the project was not financially viable; some of the kids returned to the streets, and there were unforeseen hurdles in the education and implication of ideas to keep things running. Through our media coverage of the project, we were able to take the conversation about youth entrepreneurship to an unprecedented level of public awareness. Prior to this project, youth entrepreneurship was an undervalued possibility. Thanks to the work of the kids at Ogden, the message went out loud and clear: kids want legitimate work, they want to be valued as important contributors and they want to succeed if given the chance.
Lessons Learned From Youth-Run Businesses
1) Underpromise. An error I made when selling the idea to our backers was that they would get their money back as the restaurant became profitable. This was a fantasy. Costs started to go up as we got more sophisticated with our training efforts. This set back any profitable return in a reasonable time frame.
2) Get the training program right. We made the mistake of only training for a week. This was not adequate time. It took several months of intense effort to get the right team in place.
3) Be realistic on costs. It is very expensive to work with incarcerated children. Their needs are so great and many of these needs are difficult to anticipate. They need huge support services. The mistake I made was telling people we could not only operate at a profit, generating the necessary cash flow to pay our investors back, but also to train 45 kids a year in restaurant management. At optimal conditions, we were able to train 20 kids a year and provide full-time employment for 12.
4) Be realistic about the costs of the placement services for the graduates. Our strategy had been to put the kids through a training at Ogden, pick the best ones (45 a year) and then place all 45 in jobs in small businesses. I think we placed at most five a year as we were not organized and did not understand how difficult actually securing interviews and jobs for these kids would be.
5) Document what you do through a program manual and with video. This was my deepest regret -- I did not keep a journal of what went right and wrong. Hindsight is only so effective, and memory can distort your recall of the situations; I am struggling now, after 25 years to recall the details. Everything you do should be documented so others can replicate it. The scientific method applies to youth entrepreneurship as much as to anything else.
6) Intellectually separate the training function from the running of the enterprise. Although counter intuitive, it is really important that the training function be a specialized one. Trying to combine these two features confuses costs, and results in difficulty with teaching management or the technical skills of cooking and food service in an effective manner.
7) Separate the budget for training and the operations of the business. This was my number one error. By not realizing that the costs of training would be so high I sold the program as being profitable with training and operations combined. If I had to do it over again, I would have marketed the training as a non-profit function and separated the evaluation and income statement of the restaurant from the costs of the training.
8) Anticipate issues that will arise because of the unique needs of your population. In our case we had not realized that the students might have health issues that could easily have been addressed had they been known.
What Went Right
9) We used open-book management from day one, based on the work of Jack Stack. Each of the kids learned the numbers back and forth, and even ten years later I would get notes from graduates about how the math lessons really stuck.
10) Have regular weekly meetings. We did this and the effect on morale was outstanding. We had almost 70 kids going through the restaurant over a four-year period and they learned a great deal about both work and entrepreneurship by having their first job experience.
11) Get the experts involved. The manager: we were fortunate enough to get Mike Bartola, a wonderful man who had been in the restaurant business, became our trainer of restaurant skills and manager of day to day operations. We also got the teacher right: Chris Meenan -- perhaps the top classroom teacher in America in business -- was beloved by the students and his teaching skills became legendary at Ogden and throughout the incarcerated community in New Jersey. The franchise expert: we hit a homerun as well with the prisoner who was able to get a pardon from Governor Kean and marry the sister of his cellmate.
12) Pick the right franchise partner. Our selection of Jersey Mike's was a stroke of genius as it as a brand with excellent training. It would have been ideal had our partner had a philanthropic budget to help us cover the costs.
13) Double the estimated costs of your start-up. Costs run over when dealing with young people, particularly those who are incarcerated.
15) Generate media about the program. My primary goals were to do research and to publicize the results with the media, showing the positive benefits of entrepreneurship education. This worked. Our results showing that young people's math scores improved, their attitudes toward their futures got better and their knowledge of business soared. These were all-important benefits and helped to make Newark a major center of youth entrepreneurship.
16) Use the kids' insights into markets to make the business better. Many of our owner managers had drug-dealing experience. They understood marketing and sales on a fundamental level and had unique knowledge into the wants and needs of their communities. We were able to add a whole product line -- pickles -- to our store based on what they saw about the local market.
Jersey Mike's entrepreneur education program trained 128 students providing 60 part-time jobs over a three-year period. Another 17 students were placed in jobs and another nine started some type of business of their own. The program generated over 170 million media impressions with massive coverage during the Super Bowl of 1991. It's vision -- using a business as a training ground for low income youth -- influenced thousands of such business/educational initiatives globally during the next 25 years and helped create the youth entrepreneurship movement now a global force in Education that is extraordinarily successful today.
In 2001, nine years after the close of the program, I bumped into Tyshaun during a site visit to Newark; I was delighted to get caught up and we spoke at length. He had become a cabdriver and owned a third of this small business. I asked if he ever missed making that $700 a day dealing, he looked to the side and said, "The whole NFTE/Jersey Mike's program saved my life"
I hope these reflections will help others who are trying to create a restaurant or business run by kids as a means to move them into better, life-changing situations.
Follow Steve Mariotti on Twitter: www.twitter.com/SteveJMariotti