From Lemonade To Business Moguls!
Every kid at some point wants to have a lemonade stand and rake in the profits. I love them! In my kids case, they have had quite a few. This is the perfect opportunity to give them a very basic education about business. They’re all gung-ho and excited.
It always starts with them raiding the kitchen to see what we have that they can use. This is great, right? It doesn’t cost them anything and they’ll make a bunch of money.
Why not use this a simple way to teach them some very basic business ideas. Show them how to run it like a business. Now obviously this will need to be tailored to age level of the kids. By about the age of 7, my kids were old enough to understand these concepts.
Most importantly… keep it simple.
Get all your ingredients and put them on the counter.
Get out a piece of paper and have them make a list of the ingredients. Depending on the age level you can make this detailed or very high-level. Put an approximate price next to each item rounding to whole dollars to make it easy.
If they are using only part of something, such as six scoops out of the lemonade mix, then figure out how much that is of the whole can and multiply that percentage by the cost of the can to determine how much they are using. Again this should be tailored to be age appropriate. But say you guess they need 50% of the can. The can cost $4.00 then the cost of the portion they are using is $2.00
Lemonade = $2.00
Paper cups = $2.00
Total costs = $4.00
Help them understand that it cost you $4.00 for the stuff they are going to use to sell. This is an important lesson right here. My kids just figured it was free if it was in our kitchen. I know we want to just give it to them. BUT if you want them to learn a real business lesson then we have to explain to them that it wasn’t free. They need to “borrow” the ingredients from us since we bought them and pay us back.
The first $4.00 they earn they need to pay back to us before they start making money. (You can later tell them they don’t need to pay you back if you want. Just make sure they understand the idea that the ingredients had a cost and in business they would have to pay that cost.)
Here’s where you can help them determine what a reasonable price should be for the lemonade. Help them figure out how many cups they have to sell. You can do this easily by having them count how many cups of water they add to the jug when they mix it. That’s how many cups they will get when they sell it.
If they divide the total costs by the number of cups of lemonade they have to sell they will know how much each cup costs.
Help them understand that they need to pick a price per cup that’s more than their cost per cup. Say if their cost per cup is $.25 then maybe they want to sell it for $.50 each.
Help them pick a good spot to sell. Maybe the corner down the street has more visibility than your quiet street. Obviously, we want them to be safe first and foremost so small kids on a busy street or away from adult supervision is not good. But you get what I’m saying… Help them pick the best spot to locate within reason.
Help them make a sign that is big enough to see.
Talk to them about what they will say to a customer. Talk about greeting the customer, clearly telling them the cost and thanking them afterwards.
If they are not making very much money you can ask them if they can think of ways to get more customers. Maybe go knock on a few neighbors doors (ones that you know) or jump up and down waiving their signs to get more attention.
Counting the Money
Afterwards have them count the money out and subtract their costs to see how much they made. Explain that this is how businesses work. Congratulate them on a successful business. Or if they didn’t make the cost back they still learned a lesson. You can let them keep the money if you want and just explain that they would have lost money if they had bought the ingredients themselves.
The point is to treat it as a real business and let them get a true taste of it.
Please submit a comment with the most creative kid run business that you’ve seen?