Charita's Cafe and M & P Enterprises sound much like many of the roughly 300,000 other small businesses launched every year in the United States. They are run on shoestrings, with the owners the only employees; they offer products people are likely to pay good money for; and their owners mean to show a profit. But Charita's Cafe and M & P Enterprises are different. They are school projects, part of an alternative program for dropouts called Enterprise High. Located in Macomb County, Mich., near Detroit, this remarkable program began 18 months ago with 25 students in an abandoned elementary school. Today it operates six campuses, where some 300 (mostly) young people learn life skills while running their own businesses.

If ever a program filled a need, this is it.

About 27% of all American high school students leave school without diplomas. About two-thirds of dropouts from age 16 to 22 are considered unemployable. Dropouts constitute about 80% of the population of Michigan's largest state prison, and those who avoid prison are likely to end up receiving public assistance. Nationwide, controlling or maintaining dropouts over their lifetimes costs taxpayers hundreds of billions of dollars. Worst of all, the lives of those who have left school early are likely to be unsatisfying as well as unproductive.

Despite the need, few alternative high school programs have succeeded. Money is always scarce. The students -- many of whom have criminal as well as failing academic records -- often have lost most of their self-confidence by the time they reach an alternative school. Most see no value in what schools teach, can't tolerate sitting still for long, and can draw no connection between the classroom and the world they live in after school.

The ideas underlying Enterprise High seem so simple, so grounded in traditional American values, that you wonder why no one ever tried something like it before.

Enterprise High lets students combine their academic learning with experience in running small businesses of their own design. Lessons in reading and writing, for example, can involve preparing advertising brochures and correspondence for their companies. "Shop time," when students design and build their own products, breaks up the classroom day.

According to Dick Snell, who helps direct the program, the original idea was to run an "open campus," allowing students to leave at lunchtime if they chose. The first day of the first semester much of the class left for lunch and failed to return. Snell speculated that those who didn't come back were drunk or on drugs. As a result, the campus became less open, and soon after, Enterprise High hired a drug rehabilitation counselor. But even if students didn't leap at the chance to become entrepreneurs, they responded surprisingly well over time. The first Enterprise High class had only three dropouts.

Today the program has two components. Adult Role Preparation (ARP) uses simulation to teach such rudimentary skills as understanding a paycheck or buying fire insurance. Students even enter into simulated marriages to learn the financial and emotional skills of being a parent and a marriage partner.

If ARP suggests how far these students have to go, the Enterprise Program -- the real innovation of Enterprise High -- gives them tangible evidence of where hard work can take them. Here the companies -- and the dollars -- are real ones.

Students' businesses frequently begin with simple, amateurish products, but something remarkable often happens after they see their first profits. Suddenly they begin showing up early -- and sober -- to get into the shops, designing more elaborate products, experimenting with assembly lines, and looking for outside markets. Each school maintains its own store to sell student products, and each shop I visited early this year had sold out nearly to the walls. Indeed, more than half the goods, including cabinetry and elaborate simulated stained-glass, were being made to order. Students who must struggle to sit through an hour's lecture were learning the patience to make change after change for fussy but paying customers.

Even better, some enterprises had grown beyond even the suspicion that they survived on charity: One shop had just received an order for 2,000 decorative wood storks, and a food-preparation operation was about to lock up a large candy contract. Perhaps best of all, the two young women seeking the contract had already prepared a list of seven other potential markets in case they lost that contract. Teaching young dropouts to handle failure, and to think nonlinearly, are prime objectives of the Enterprise High program.

Rick Benedict, the program's founder, expects not more than 5% of his students actually to launch businesses of their own after graduation. For the rest, success will mean becoming productive members of society as someone else's employees. For that to happen, however, they need to learn how capitalism works, why work itself is important, and that their own work -- and so their own lives -- has merit. Entrepreneurship is a way of teaching these virtues and values. The students who go on to college, or find good jobs, are as much a cause for celebration as the 1 in 20 who may eventually start a small business. People who have spent part of their school time as bosses of their own small businesses graduate with an understanding of why bosses outside the school expect hard and consistent effort.

Enterprise High is not without problems, however. Student scores on math and English tests, although improved, remain poor. The teachers' union is more interested in preserving seniority than in getting the best qualified teachers into the program. The limits placed upon equipment and facilities are painfully obvious. Here, though, progress is being made: The new "hi-tech" Enterprise High campus got its computers, printers, and modems by making a subcontracting deal with a fastgrowing data-processing company.

The program needs more help from the business and financial worlds -- help in finding more subcontracts in technical fields and in designing a transition course for the 5% of the student body who will go on to found businesses of their own. If the price of such help seems high, it is worth remembering that American business already pays the tab for high school dropouts, for that 27% of our population with no skill and little motivation.

Enterprise High, by itself, won't solve the problems it addresses. But in turning dropouts into self-motivated young people with strong interests in free enterprise, it is a step in the right direction.