The Lemonade Stand

I wrote this some time ago...right after Labor Day weekend...but I just found time to upload my pictures to my computer so I could post them.

This past weekend was one of the best I have had in a long time. Saturday morning, I got out of bed and began my usual routine of getting the kids ready for the day, making breakfast, and cleaning the house. I looked over at our kitchen table and there sat two coolers and a huge container of lemonade. I am embarrassed to say they had been sitting there for the past two weeks...since our pool party on the 17th. I managed to clean them but had not returned them to their usual location in the dark recesses of our basement. Anyway, it gave me an idea. As Ryan, Grace and Nathan were eating I asked if they would like to have a lemonade stand. They were excited about this business venture so our work began.

We started discussing our "business plan". Ryan was listening intently. Grace was dancing around the kitchen, falling to the floor, playing with Nathan...basically bored with the discussion. She agreed she wanted to be a part of the venture but planning was not her thing. She decided to go next door to play with Alli. By default, Ryan became the manager of the business.

With entrepreneurial spirit, I took this as an opportunity to teach Ryan a little bit about how to run a small business. We began making a list of what was needed for the lemonade stand, itemizing our expenses and discussing the meaning of "overhead". We discussed advertising as he drew the word "Lemonade" with black bubble letters on a sign. When Grace returned home, she decorated the sign with markers and crayons. Ryan wasn't too pleased with her making changes to his sign but then we started talking about ways to make your business unique and memorable. First impressions are very important so a bright colored sign was not a bad thing. Ryan thought about this and thanked Grace for her efforts.

We discussed the expenses of the business. We told Ryan that we would go shopping to get some things we needed such as ice and cups, but he was expected to pay us back. This launched us into a discussion about credit and interest. We told him that we would not charge interest but in "the real world", when you borrow money, you pay much more than the original price...sometimes several times as much.

Ryan accompanied Mike to the store to buy some things that were needed. As they walked through the aisles they talked about the quality of the product, figuring out what to charge and about the correlation of supply and demand. They also decided to add a second product to sell at the stand...rice crispie treats! This led them into a deeper discussion about the quality of your product. Would people rather have "store bought" rice crispie treats or "home made"? Also, which one was more cost effective? Mike and Ryan decided to conduct an experiment about which one would benefit the business more so purchased both. Ryan's position was that most people would want the premade treats. Mike was confident that people would prefer homemade. Also, Mike pointed out, that many more treats can be made if they were made at home.

After they returned home we made the lemonade and the rice crispie treats. We set up a canopy, which was originally intended to offer shade to Ryan and his "employees". We were pleasantly surprised when we realized that people were coming down our street to see what was going on at our house because the canopy caught their eye. Ryan hired two employees (Grace and Alli), we posted the sign, set out the products including both types of treats, and they were in business.

Business was slow at first. Ryan, Grace and Alli were sitting in their chairs, watching cars pass by. We started talking about how to draw people to their business. They decided that jumping up and down and yelling "LEMONADE!!!!" was a good idea. They were happy to find that this worked and business picked up a little. During down time, we talked about ways to draw more customers if this were a real business. I asked if we were in a good location. Grace pointed out that the mall would be a better place because there were more people. All three of the kids came up with excellent ideas about how to make this business more successful. I had to leave for a short time. When I returned they excitedly shared stories of customers buying lemonade. Ryan came to the conclusion that it's best if an adult is not present! Interesting. I decided to watch from inside the house.

It was a short time later when Ryan came running in to tell me that Alli got mad and kicked over the lemonade stand. When I went outside to see what was wrong I realized that a) Alli did not kick over the stand and b) this disgruntled employee had a valid reason for her complaint. This brought us to another discussion about the importance of treating employees fairly and letting them know they are valued. We talked about how important employees are to the success of a business. Although this little conflict blew over, it was soon after that both Ryan's employee's quit. Being Labor Day weekend and the last days the pool would be open, Grace and Alli examined their priorities and decided swimming was more important. Ryan compensated them ($3.00 each) for their time and off they went.

Ryan tried to keep the business going on his own but he discovered that having employees not only made the job more enjoyable, they were also very much needed. He hired two more employees, Devin and Summer, who did an excellent job helping him out until the end of the day.

Eventually, Ryan decided to close shop as business had slowed considerably and he wanted some time to play. After we cleaned up, Ryan paid Summer and Devin and counted the remainder of his money. He had about $10. His heart sank when he realized that the expenses would greatly reduce his profit. I had him imagine all of the things that would have been expenses had we not already had them handy...the canopy, chairs, coolers, crayons, markers, poster board, tape, lemonade, and a driveway! I explained that most small business don't turn a profit for three years! Then I let him off the hook and told him he could keep his money. That put a smile on his face and for the next couple of days he talked about the lawn mowing and leaf raking businesses he was going to start.

As for our experiment with the Rice Crispie Treats, we learned that most people prefer the Rice Crispie Treats made at home. But apparently, the homemade treats weren't as desirable to kids. For some reason, they wanted the individual, pre-packaged item. Hmmmm...I wonder why that is. An experiment for another day, I guess.