Squeezing a Living from the American Dream

My eight-year old son, Jack, and his same-aged friend, Clare, came to me one day recently and declared that they were starting a business.

Thrilled with this creative idea they brought before me for approval, I asked them to tell me more about their business.

“We’re going to sell lemonade,” they said almost in unison.

They arrived at this decision after watching all the workmen driving by and all the high school kids walking past our house on their way to the field.  

“It’s so hot outside, just think of the fortune we can make,” spouted Jack.

“Yeah, we’ll be rich!” expounded Clare.

I explained that every successful business needs a solid business plan, a marketing plan, and some start-up capital. I thought this would be a great opportunity to teach them some important lessons about what it takes to run a successful business.

“We’ve got it covered mom,” said Jack. “Our target is hot, thirsty people. We’re using your lemons as start-up capital. We’ve already made up signs that we hung on our table outside and we made sure we used lots of yellow. Yellow on a hot day will make people more thirsty!”

“I made posters to hold up and catch the attention of people driving by. And I made coupons,” Clare reported quite matter-of-factly.

Coupons? Now I was intrigued.

“Yeah, coupons,” replied Clare. “We only give coupons to people who buy a cup of our lemonade. See?” she said as she thrust a small, nicely decorated slip of paper into my hand, “50 percent off your second cup of lemonade. Good on your next purchase.”

I was pretty amazed. Clearly, they had put a lot of thought into this business venture.

“Now all we have to do is make the lemonade,” said Jack as he grabbed the bag of lemons I had just purchased at California Farms.

After cutting and squeezing a dozen lemons Jack and Clare were clearly tired.

“This is harder than I thought,” said Jack. “Here, let’s use my mom’s Country Time Lemonade for the other pitchers.”

Since I was the designated chaperone, I set up my lawn chair far enough behind them so I wouldn’t impede their sales. (“Mom, if you’re sitting right next to us it will kill our sales.”)

After 20 minutes in the heat, jumping up and down on the sidewalk with their posters every time a car passed, and no sales, the team began to balk and question their business. Just as the cranky started to kick in, a lot of utility vans began to pass the house. That’s when sales went wild.

Plumbers, Verizon workers, electricians, school janitors, even a few dog walkers bought lemonade from them.

The poor Pizza Nova delivery guy got out of his car to deliver a pizza to our neighbor when the kids all but lifted him by the ankles to shake money out of his pockets. Shamed by two eight-year olds, he emptied his pockets and his car of all the change he could find so he could buy a cup of their lemonade. He gave them two handfuls of pennies and nickels.

When they ran out of the large plastic cups they took a box of small bathroom Dixie cups to use.

“You can’t charge 50 cents for that small cup when people were getting triple the size before,” I said.

“Mom, trust me; people will pay the same amount for a smaller product. Don’t you say that all the time when we’re shopping? How everything comes in smaller packages now, but the prices are still expensive?”

“Yes, but it’s not really ethical, is it?” I offered.

“Mom, it’s business. Hey Clare, let’s add more water to the lemonade, this way it will last longer and we can sell more!” They also added more posters: “Limited Quantities Available! Almost Sold Out! Get Yours Now Before It’s All Gone!”

My God! The kids were pulling a Wal-Mart! Keep costs really low to increase profits and tell people there was a low supply to entice them into spending their money.

In the end, it was the kids who taught me a lesson. People were willing to pay more for smaller cups and almost every customer said, “Wow, I’m glad I got a cup before you sold out.”

After three hours all the lemonade was sold and I have to say, as the kids counted up their money I was impressed. $36 gross. Well, it was actually $35.96.

“That Pizza Nova guy must have short-changed us!” they said.

I threw in the four cents so they had an even count.

They divided their profits and decided that they were opening a second location—Clare’s house. They would work our street on Tuesdays and Clare’s on Thursdays. They even talked about franchising.

“If we make posters for our friends to use on their stands, make coupons for them to hand out, and share our secrets for selling we’ll just ask for half of whatever they make that day!”

We’re three weeks into “The Lemonade Stand” and these kids are making some serious money for eight-year olds. They’re learning and living the American Dream—until the IRS, or Wal-Mart comes along and smashes it to pieces.