Just this past Saturday, my kids and I had a lemonade stand, at our local pump track. After a summer of my eldest thinking about it, baking for it, planning for it, and executing it, we finally did it – and it went great. They had $26 in gross revenue from $1 cups of lemonade and a few baked goods sold.
But what I found most interesting was observing the parallels between running their little lemonade stand and running a true business. My kids were open to chatting about all these things as well, and (I hope) enjoyed learning something about how it all works.
So here is what I noticed, in no particular order.
Have a diverse team with different strengths
Businesses excel when they have team members that excel in complementary areas, with great management and leadership.
My kids’ Lemonade Stand never would have happened without my daughter’s drive to do it. She really really wanted this! And brought it up over and over and over again. But not just lemonade, she wanted to up the ante by offering baked goods. So they spent several weekends baking with mom, preparing yummy (and some overcooked/burned/experimental) cookies and muffins. I planned out the logistics of how to make delicious freshly squeezed lemonade for our customers, organized the equipment we needed to make it all work, and squeezed 26 lemons (their little hands are not quite strong enough yet!)
When it came to the day of, we sat and sat and no-one came to buy, despite being a busy spot. My eldest was starting to get sad – she was expecting a lineup after all! Until their friend and her parents showed up. The little friend is a firecracker – never shy about anything. So when we suggested they should go and tell people about what was going on, she was totally game, and dragged my kids along for the ride. Sales shot up almost instantly!
Having the right team in place made it all possible.
The Importance of Marketing
Marketing the lemonade stand was critical to its success. Once their friend arrived, the kids literally shouted from the proverbial rooftops about what was going on – running around the entire pump track and to the picnic tables and blankets where people were hanging out. There were lots of kids there, with their parents, but without them being told about it, interest was low. As soon as that happened we started to get some sales.
Without sales, there is nothing. And without marketing of some kind, no-one will know about you and be interested to learn more and buy.
A business is only as good as its sales, and sales only come with awareness, interest, and desire. Those come from effective marketing.
Have a Great Offer
While some might say any publicity is good publicity, it certainly helps if it comes with a great offer, something nice for the customer, or a hook to grab their interest.
A lemonade stand is by definition done on a hot day, when people need refreshment. On the hottest days, my kids and I go to the park with a little spray bottle of water – we call it our portable air conditioner, and we had brought one to our stand, mostly to use on ourselves.
But when their little friend showed up, we thought “why not take the portable air conditioner to them? Hook them with a little dose of refreshment, and then let them know they can get even more refreshment with cold freshly squeezed lemonade, and baked goods too, just over their at the lemonade stand?”
The sight of 3 cute kids running up to tell you about the stand is already great, but add the free refreshment, and awareness of the stand and what it offers, and it is hard for kids to say no (and their parents to refuse them!).
Go Where Your Market Hangs Out
The typical lemonade stand is on the side of the road where kids wait for passersby to see it and stop. But that is very random. We happen to live very close to a pump track, which is almost always busy – with kids and their parents. That is basically the ideal target market for a lemonade stand – in the sun, working up a sweat, and captive by proximity to what they want to be doing. Our pool of prospects was increased dramatically by simply going to where they hang out!
Of course, it’s not hard to figure out where the lemonade stand market might be – there was another lemonade stand already set up when we arrived. Fortunately they left soon after, but with a great offer, making it easier to buy, and better marketing, even in a crowded marketplace you can succeed.
Good Visual Branding and Positioning
The other lemonade stand that was already there had us beat in two categories: visual appeal, and location.
They had arrived a bit earlier, so they were able to nab (arguably) the best spot – a little closer to the kids and families.
And, instead of a Costco folding gray plastic table, and a big cooler with water in it, they had a nice summery table-cloth, and a decorative urn for their lemonade.
Packaging is important, and positioning too. Our next lemonade stand will be a little more attractive, with bigger signs (I actually have a sandwich board at the office that we will repurpose with much bigger displays) and we’ll try to get there a little sooner to snag the best spot!
Make it easy to buy
One area where we had the other stand beat was in our technology.
The other sellers complained how hard it was to sell when few people carry cash these days. Well, we accepted e-transfer, and included that in our marketing. And we had our accounting department (dad) on hand to accept it. One mom actually bought 5 lemonades via e-transfer.
Making it easy and convenient to buy is important.
Commission
The last thing that I taught my kids was about commissions. Their little friend, the intrepid salesgirl, significantly improved our sales. So, she earned $2 and a muffin-cake for her efforts! My kids totally understood that she deserved those things. And she was extremely happy: it was the first toonie she’d ever had! And the muffin-cakes are delicious.
Future Teachings
While I would have loved to go into the cost of goods sold, labour costs, net revenue vs gross revenue, partnerships, how to figure out the pricing and the fair market value for a lemonade, etc., as a second entrepreneurial effort for my daughter (she previously ‘sold’ her artwork to her relatives haha), I was warned against ruining it with too much analysis and spreadsheets (from my wife’s personal experience as a kid haha)! Time enough for that when they are older.
All in all, it was a fun look into what goes into a small business, at a level my kids could understand, and a great little reminder for anyone who’s wondering what it takes to make a business work.