Lemonade Stand

One of the first experiences I had as a child with running a business was a lemonade stand.

The idea of a Lemonade Stand, as a sort of pattern or model for business still sticks in my mind today. I think because it's both very simple, and, it has all the key elements that make something a business enterprise and not just a work-for-hire labor-for-employment-and-paycheck situation.

It's very simple. You just make lemonade, set up a stand somewhere, offer it for a price, try to attract people, and try to make a profit on each sale and grow the volume of your business. There's no office politics. You don't need a resume. You just make something somebody wants, offer it for a price, let the world know about it, use the money to pay the bills and maybe have extra leftover, improve, rinse, repeat. That's pretty much the essence of business. I love it.

Now, as a practical option, in today's world, for an adult to consider, it's not really a very good idea. But for kids, or as a textbook example, it's really smart idea and a useful thing to study.

Here are some of the things that I think are bad about a lemonade stand, or certain kinds of problems or negatives associated with it, that make it less than ideal in the real world:

1. lemonade is now a mass-produced commodity made by large companies with deep pockets and with lots of advertising
2. you have to have a physical presence at the lemonade stand, to run it. This will hurt your abillity to take a day off, or to scale up by adding more stands in other locations. This is not a total showstopper because you can sneak around this requirement hiring others to man the stands and you simply manage them. Then hire managers to manage the folks running the stands then you simply oversee and direct at the highest level, and reap the profits. The problem here once again is that the more in this direction you evolve you evolve closer to an entity we've just described in point number one: you're now competing against a pre-existing large corporation who is already doing this, been there, done that
3. your business model is fairly generic and can be easily copied by competitors or ambitious employees. UNLESS you have a very unique recipe that's significantly better tasting than the other vendors AND you keep the recipe top secret AND there's no way to reverse-engineer it. All of which is highly unlikely, so, again, you're back to a business that can be easily copied.

So trying to get rich (or even break even) by starting a lemonade stand business is probably not a wise idea in today's world. But as a model for talking about business, for educating about business, or for introducing kids first-hand to what it's like to run a business, it's great.