Keep the Change
My sister Nicki and I made a promise to each other more than 30 years ago and neither of us has ever broken it. We vowed that for the rest of our lives, no matter where we are or how inconvenient it might be in that moment, we would always stop at a child’s lemonade stand. We also agreed to tip the young entrepreneurs generously.
Nicki and I grew up in a quiet neighborhood and not near a main road. Setting up a lemonade stand, and working at it for hours in the summertime, was a big commitment.
In our experience, we learned there were several important elements in creating a successful lemonade stand.
First, we needed lots of ice. The lemonade—seemingly the star of the show—didn’t even have to be that good if we added plenty of ice to each cup. Customers always seemed more excited about a refreshingly cold drink on a hot day than they were about their lemonade actually tasting good.
Second, we needed a big and colorful sign. Lucky for us, mom was artistic and always had cardboard and Magic Markers on hand. She would draw the bubble letters for our sign, and we would fill them in with bright colors. We firmly believed this advertising attracted more people.
Third, we knew from experience that it was best to set up shop at the end of the workday and catch neighbors on their drive home. If it was hot, our sign’s message was clear, and we offered a refreshing beverage, who’d pass that up?
Last, the real leverage was to not have a lot of change in our money box. That’s because not having change for customers made it easier for them to leave us a tip. When we’d open the cash box and there weren’t many coins in there, the customers would often say, “keep the change.” You might think this is a sneaky tactic, but we thought (at ages 9 and 7) that we were pretty clever.
The profit we’d make from our lemonade stands became our Cape Cod spending money at the end of the summer. And it didn’t take long for us to realize that if people were stopping for lemonade, they might buy other things too. We added Rice Krispy Treats, Toll House Cookies, and anything else mom helped us bake. These additional offerings helped boost our profit.
And when I say “profit” I am referring to the money we got to keep after paying back our parents for the supplies. I didn’t know back then, but our parents taught us life-long business lessons by loaning us money for the lemons, sugar and cups, then tallying up the expenses, and making sure that we paid back the micro-loan at the end of the day. Nicki and I would calculate how many cups of lemonade we had to sell before we’d break even.
I loved every aspect of a lemonade stand as a kid. It taught me basic business skills, marketing strategies and even how to leverage.
That’s why I’m still committed to helping any budding entrepreneur in the “lemonade stand space.” I encourage you to join me and Nicki in our promise to never drive by a child’s lemonade stand without stopping, purchasing a cup, and letting the kids always keep the change. Encourage kids’ entrepreneurial efforts and commitment. Heck, you never know if one might even grow up to be a financial advisor someday.
This Week’s Resources
Teaching Your Kids About Money
Looking for creative ways to teach your children or grandchildren about money? Fidelity offers five simple tips that kids won’t learn in school: https://www.fidelity.com/learning-center/personal-finance/wont-learn-in-school
Making Sense of Inflation… Through Legos!
Want to teach your kids (or yourself) about inflation in a fun and easy-to-understand way? Check out the video from the Cleveland Fed’s Inflation 101 Series. They use animated Legos to explain this important financial concept: legos and inflation
For the History Buff on Your Gift List
Need a gift for someone who loves history? Check out this collection of fun ideas from Uncommon Goods. They have everything from a Periodic Table of Presidents to Founding Fathers Whiskey Glasses. Whether it’s a child or a grown up you need to buy for, this is a great place to shop: history buff gifts
Disclosure: Securities and investment advisory services offered through registered representatives of MML Investors Services, LLC, Member SIPC. The Jamrog Group is not a subsidiary of MML Investors Services, or its affiliated companies. Supervisory Office: 330 Whitney Ave. Suite 600 Holyoke, MA 01040 Telephone: (413) 539-2000.
