When I was little, I always dreamed of having my own lemonade stand. It’s the quintessential childhood startup business – make a jug of lemonade, set out some signs, and start raking in the cash. However, the years came and went, and I never actually followed through with setting up my own lemonade stand.
That’s why, when my older son (age 6) started talking about setting up a lemonade stand, I decided to help him make it happen. But, as I quickly learned, setting up a lemonade is no small feat and involves quite a bit of startup planning and costs.
You have to have a table and chairs, create signs, get ice and a cooler, make the lemonade, find a container to store the lemonade in, get cups and napkins, get cash for change, and more.
This was the perfect opportunity to show our kids all that goes into getting a business off the ground. Along the way, we threw in some lessons about money management and financial freedom. The whole venture was quite a success, albeit with a little bit of whining here and there, as to be expected.
We started out by choosing a date and location. We decided to set up the lemonade stand on a Saturday at a busy location near a playground on Lake Merritt in Oakland, not far from where we live. Once we had that settled, we talked about what we were raising money for. We decided to donate half of the proceeds to St. Jude Children’s Research Hospital.
Next, the logistics of the lemonade stand itself. Off to Target we went, shopping list in hand. We needed lemonade, lemons, ice, cups, napkins, posterboard, new markers (because ours are always out of ink), and a beverage dispenser (because, having a kindergartener pour dozens of cups of lemonade from a heavy glass jug was a terrible idea, I realized).
After creating and then laminating the signs, we were ready. The morning of, we filled the beverage dispenser with lemonade and lemon slices, filled the cooler with ice and a cash box with dollar bills, and set out for the lake.
Fortunately, it was a warm and sunny day that day. There were a number of races and events going on at the lake, so there was plenty of foot traffic, and also a surprising number of people who were carrying cash. (FYI, we also did offer Venmo as a payment option.)
“Remember to let people know that you’re selling lemonade,” I urged.
“Lemonade! Fresh lemonade!” my kids started to yell, learning their first lessons in advertising.
They soon realized that the people with the numbers pinned to their shirts (i.e., the runners) were unlikely to stop, but that the families with kids were a prime target, and hence they started to learn about targeted marketing.
As the day went on, they learned about customer service (always say look your customer in the eye and remember to say “thank you”), inventory management (always make sure the jug is filled), working as a team, upselling (“Would you also like a muffin?”), and more.
Overall, the lemonade stand was a smashing success.
We started the day with a mostly empty box of dollar bills, and we came home with a box that could barely close. Of course, my kids’ eyes were as big as saucers at the sight of all that cash. However, that excitement quickly dwindled and turned to disgruntled disappointment once they realized how much of it they would need to pay me back for startup costs.
Lessons in entrepreneurship don’t get more real than this. Here they were, staring down stacks of cash before their very eyes, and trying to wrap their minds around the fact that they had to fork most of it over to me. Those are hard realities to swallow, at any age.
At the end of the day, they netted about $30 for their 2 hours of work. Not bad. After donating a portion to St. Jude, they bought a new book and added the rest to their savings.
Of course, we didn’t stop there. We talk to our kids about money all the time. We talk about ways we’re making money, ways they could make money, what to do with money, how to have money make more money, the financial consequences of their actions, giving money to those in need, and more.
You see, when I was growing up, I was taught that there are just 3 things you do with money: earn it, save it, and spend it. My parents worked hard for their paychecks, and each paycheck would go directly into the savings account. They taught me the value of hard work, setting goals, and delayed gratification.
However, they didn’t teach me about investing or real estate, because they were topics they knew very little about. All I knew was this endless cycle of working hard to earn money, then spending that money and depleting my savings. I never knew that there was another option.
This is why we’re starting early with our kids. Whereas my mental money model growing up was earn / save / spend, I want my kids to grow up with a different money model: earn / save / invest / create cash flow.
I want my kids to do whatever it is in life that makes them happy, whether it’s selling lemonade, washing cars, teaching kindergarten, or becoming a doctor. Regardless of the passions they pursue, I want them to know how to make their money work for them, so they can attain financial freedom and live their ideal lifestyle without having to worry about money.
My six-year-old already has a book of business ideas, full of ideas for ventures he could pursue to make money. This lemonade stand fit the list perfectly and was a great way for them to experience the “earn” part of the cycle.
Periodically, when it makes sense, we also give them opportunities to invest with us. Learning about financial freedom is a lifelong journey, and for our family, it’s an ongoing adventure.
Will we set up another lemonade stand? Probably so. And next time, maybe we’ll upsell some coffee for the grownups too.