Talk:Lemonade Stand
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[edit] [[OUR LEMONADE STAND]]
http://www.familycapers.com/Projects/Lemonade/default.html
For more information or a detailed plan in PDF format click here. [1]
QUICK PLAN OVERVIEW 1. Decide on plan and budget 2. Develop recipe 3. Purchase materials 4. Build fixtures 5. Implement plan 6. Roll in the dough
[[DETAILED STEPS]]
BACKGROUND
A couple years ago my oldest three sons came to me and said they wanted to start making some money for themselves. After going through endless ideas such as selling all their toys, they decided to run a lemonade stand. Being the crafty father, I seized this opportunity to teach some fun but serious lessons in entrepreneurship. Here are some the things they did.
[[PLANNING]]
Name / Brand Company Structure Product Distinction Product Offering Marketing Location Design fixtures
BUDGET AND FINANCES
Starting capital Pay back plan Regular operating expenses Inventory Control Decide on pricing options (depends on weather)
RECIPE
Factors: product distinction (organic, etc.), inventory control (real lemons and waste), starting budget for food supplies Run many taste tests Decide on typical ice content Agree on quality
PURCHASE EQUIPMENT & BUILD FIXTURES
Wood and hardware supplies for fixtures Cloth supplies for sign-age Wagon for transport Cooler, pitchers, ice cube trays, money box Initial inventory: cups, lemons, lemonade mix
PUT PLAN IN ACTION
Schedule adequate staffing Prepare signage and do dry run on table set up Check weather before leaving house Guarantee children's safety with rules and proper supervision Supreme customer service
[[PLANNING]]
While the planning part is hard for any man due to the fact that we want instant gratification, it is a million times harder for kids. This is the really boring stuff and not easy to hold their attention while completing. Because of their short attention spans, we broke this into smaller sessions which made this one of the longest parts.
The first part they worked on was deciding what to call their business. This was an especially difficult process as they each had different ideas and would not consider each others. I finally stepped in and took a couple ideas from each boy and presented them one at a time. This eventually led to combining a couple ideas into one, "B-Brothers". This worked since each boy's name starts with a "B".
Once they had a name, they felt like they had a group identity and we constantly referred to the endeavor by the company name to build on this.
Now that they felt like a team, we started talking about what roles each person would play. The main one they had to decide on was the treasurer because this would be the money person. That was an easy call for the oldest brother since he was the only one at that time that could add large amounts of money. I had him start a new spiral notebook to track everything moving forward. He built small tables on different pages using a pen and a ruler - nothing complicated just a few columns. He used these tables to track their initial purchase list with costs. He would later use this to track each day's earnings with who worked that day for an even split. He also developed a rudimentary balance sheet in the notebook.
After we had decided on the company name and roles, we started working on some basic marketing concepts. These included defining their product, logo, company image, and location to sell. The boys began to think about what would set their product apart or make people want to pay a premium for it. They toyed with the idea of going organic but decided against it. This is covered in detail in the recipe section. After a lot of discussion they decided that they/themselves would be the differentiator for their product. The decided to put together a cool looking table and to all wear the same yellow golf shirts. They also agreed that the younger boys were very cute and would attract customers with their smiles.
For more details on the table they designed and built (with dad's help) please see the "Recent Shots" section on the family website. I will soon post the actual design of their lemonade stand table and banner.
[[Budget & Finance]]
The first consideration they had to make was how were they going to purchase the initial equipment they needed to start. After pooling all their money together they had $15. To find out if this would be enough they began to list out everything they would need to purchase. The exact list can be found in the Purchase Equipment section.
They figured out that the initial equipment and inventory came to $70 and were immediately discouraged that they couldn't start. I let them know that their mom and I would loan them the initial money by purchasing these items for them. The terms for repayment would be the first $70 went to their parents for payment. This was hard for them to grasp as they would work quite awhile and not see any money. In actuality, we only collected about half of that money but the lesson was still learned.
We then briefly discussed how they needed to keep a certain amount of cash in their little box to purchase new supplies as needed.
The most fun they had out of this whole phase was deciding on how to price their product. They discussed things like how wealthy the community is and what they would be willing to pay. they also decided that they would raise prices on really hot days since they could get away with it as the demand would be higher.
They discovered that it is extremely difficult to set their price without knowing what their cost for one cup of lemonade would be. They couldn't determine their cost until they knew their recipe as this determined materials needed. Once they had the recipe they figured out how much materials to make one pitcher then how many 16 ounce cups from the pitcher. They finally worked the math down to ten cents per cup. So they set their regular price at $0.50 per cup and $1.00 on hot days. They felt that this gave them a fair profit for their work.
[[RECIPE]]
The boys found out they couldn't set their initial inventory list or their price without first having a consistent recipe.
First we went to the local supermarket and other stores to purchase several different lemonade options.
- Bag of real lemons (Sam's Club®) - Country Time® Lemonade Drink Mix - Frozen lemonade concentrate - 1 gallon jug of Hawaiian Punch® Lemonade drink - 1/2 gallon jar of organic lemonade (from Trader Joe's®) - They used an old fashioned orange hand juicer to squeeze down four lemons into juice. Then they added a half gallon of water and two cups of sugar then mixed. While this was great fun at first, they quickly realized how much hard work squeezing lemons is. This was a key factor in their final decision for a recipe.
The Country Time and frozen concentrate required some additional work to mix. The Hawaiian Punch and organic lemonade were purchased ready to serve.
The organic mix did not fair well in the taste test and they figured they would have to charge close to $2.00 per cup in order to make any money.
The boys then went on to have their older sister and mother taste test each of these options and vote. The cups were not labeled so mom and sis had no idea what they were voting on. Mom and Sis agreed that the fresh-made lemonade and Country Time mix were tied for first place.
Because of the cost of the lemons and the hard work involved to prepare fresh squeezed, the boys decided on Country Time as their lemonade recipe. They decided to cut up two real lemons to float in each batch for "presentation". They also agreed to keep the Country Time recipe a complete secret from customers.
[[Purchase Equipment]]
Initial equipment list : - wood for table - paint for table - hardware for table - wagon for transport - small cooler for ice - 2 - 1.5 gallon pitchers - cloth for banner sign - small box to keep money
Initial Inventory: - 2 extra large cans of Country Time Lemonade - 1 bag of real lemons - 2 bags of 16 oz. cups (24 each) These were clear disposable plastic party cups.
[[Plan Into Action]]
There was a lot of excitement on the Saturday morning of their first day in business. The boys talked mostly about how they were going to spend all the money they were going to make.
They had already went through a couple of sessions with dad practicing the table set up. They had also gotten practice on making lemonade from the taste tests. This all made for a rather smooth process of getting things ready.
They checked the weather and determined that on their first day they would charge $0.50 per cup. This worked to their advantage as most people would give them a dollar bill and say keep the change.
Mom was especially nervous about letting the boys be alone so dad helped them out a little and tagged along with the babies. I stayed a safe distance away so they could operate on their own but stayed close enough to intervene should the need arise. We would later pruchase walkie-talkies when we felt comfortable for them to go it alone so we could check on them and they could call for help if needed.
The younger brothers' job was to stand beside the table and smile while waving at people and cars as they passed. They found this to be the best marketing they could ask for.
They did learn some hard lessons in customer service when multiple people stopped by at the same time. The boys would get flustered when people looked impatient while waiting. This caused the boys to think of better ways to serve and be more efficient. They also discovered that some people would come back the next time if they really liked the drink and felt the service was great.
We celebrated their first day in business where they made about $20 dollars by walking down to the local pizza parlor and ordering a large pepperoni pizza.
For more information or a detailed plan in PDF format click here. [2]
