At first glance, trusting a middle school student to buy, run, and sell a million-dollar business might sound far-fetched. However, graduates of FLEA may be able to do it better than most adults. Through strategic gameplay, repetition, and real-world business scenarios, this unique program is transforming the way teens learn vital skills—and what we see is impressive.
FLEA, short for Future Leaders Entrepreneurs Academy, is designed to improve students' study habits while igniting a passion for learning. As a bonus, some students may even be inspired to pursue careers in buying and selling businesses. Over four months, participants compete in teams, make strategic business decisions, and take on the role of private equity executives in a hands-on learning environment.
Real-World Learning Through Simulation
In the first month, students are introduced to a case study based on an actual business, with financial information presented in summary form. This allows students to focus on making high-level executive decisions rather than getting bogged down in detailed financial analysis. Each business case highlights the company’s strengths, weaknesses, opportunities, and threats, allowing students to focus on growth strategies.
Using seven fundamental business levers—price, volume, direct costs, overhead costs, accounts receivable, accounts payable, and work-in-progress—students input data into an AI system, which helps them shape their unique strategy for growing the business. The key takeaway: every student’s approach is valid but must be justified. Developing critical thinking skills is the program’s top priority.
Taking Ownership: Business Acquisition
Each student submits an offer to "buy" their business. They are rewarded for the quality of their plan by the quality of the available financing options. Their acquisition may be financed through equity or debt, with an important lesson: interest expenses reduce profitability, making equity a more attractive option. The FLEA Board of Directors, playing the role of investors, reviews each student’s plan and approves funding based on the strength of their strategy.
For example, if a business is purchased for $250,000, a student might finance it with 100% equity, avoiding interest payments altogether. Alternatively, they might be awarded a 50-50 option, equity, and debt, leaving them with a potential $125,000 loan to repay at the end of the course. The goal is to increase the company's value, with the understanding that less debt will yield a higher final valuation.
Executing the Plan: Growing the Business
During months three and four, students simulate four fiscal quarters, using seven business levers to make critical decisions that affect their company’s bottom line. The final business valuation is calculated based on net profits before taxes, interest, depreciation, and amortization (EBITDA) multiplied by an industry-specific factor. In FLEA’s case, the multiple is assumed to be five times EBITDA.
For instance, if students aim to double their company’s value from $250,000 to $500,000, they must ensure their business generates $100,000 in net income. However, if they have outstanding debt at the end of the course, it will be deducted from the final valuation. A company with no debt could be valued at $500,000, while an outstanding $100,000 loan would reduce the company’s worth to $400,000.
Transforming Middle School Students into Future Leaders
FLEA’s approach teaches business fundamentals and instills valuable life skills like problem-solving, financial literacy, and critical thinking. While the idea of a 13-year-old buying and selling multi-million-dollar businesses may seem improbable, FLEA’s graduates prove that with the proper training, anything is possible. By the time they finish the program, these students will have a deeper understanding of how businesses work—and many will have the confidence to become the leaders of tomorrow.
While not every graduate may go on to buy and run a business, FLEA's real success is in fostering a lifelong passion for learning and developing the skills needed to thrive in the modern world.
For additional information or if you want to help our program grow, contact Steve Thompson at steve.thompson@thefleaadvantage.com.
Comments