The Unexpected Business Lessons I Learned from Two Lemonade Stand Encounters
Generations of kids have learned how to run a business by working summers (or weekends) at lemonade stands.
The lemonade stand is such a ubiquitous experience for children to learn about money that it has become many children’s first class in salesmanship. Millions of children and teenagers get their first taste of work selling lemonade (before graduating to delivering newspapers, babysitting, and mowing lawns.)
I’m no lemonade expert, but I do know a thing or two about business. And while the lemonade stand may be an obvious way to teach kids how to set prices and work with customers — things that are useful in any line of work — another unexpected lesson hit home recently about running your first lemonade stand: generosity can create meaningful relationships that pay unexpected dividends.
On a recent hiking day trip upstate New York — a hot and humid 90-degree day — I encountered two lemonade stands, with two very different ways of doing business.
The first was a group of preteen boys selling out of two large jugs perched at the entrance of a mile-long hike. They had two options: natural sugar and stevia (demonstrating an understanding of the whims of the market). They did not have plastic cups, instead offering to fill up your reusable bottle (demonstrating an awareness of the environment — more plus points there). Their pricing, however, reflected downtown New York expectations — $5 per fill (which they measured using a standard Pyrex liquid measuring cup.)
They did take Venmo, in case you were wondering.
At the end of our hike, walking back to the train station through a residential area of this small upstate New York town, a small group of girls no older than 8 ran a traditional lemonade stand outside their home. Under their parents’ watch, they offered 25c fills in standard red plastic containers, which they would then take back and recycle.
25 cents?! That’s a bargain! Does that even cover their costs, we wondered?
The bigger trouble was — we weren’t carrying coins. (And they didn’t take Venmo, because why would they, for 25 cents.) Yet, upon witnessing our disappointment, as we were frantically searching for a lost dollar in our backpack, one of the girls walked up with a cup for each of us, as a gift — no payment necessary. Quenching our thirst on the glorious lemonade (without a worry for sugar or stevia) we thanked them — and their parents — for their inspiring generosity.
After we’d gotten our fill, my partner exclaimed “found it!” and pulled a crumpled $5 bill from the bottom of her backpack. We handed it to one of the girls, together with our cups for recycling, and went on to the train station, filled with unexpected joy after an exchange that turned out to be more than a simple transaction.
What can we learn from these two encounters?
The first group certainly did a few things right:
- offering multiple, but not too many, versions of the product reduces friction and increases the likelihood of a sale;
- accepting multiple payment methods is key to not losing sales due to unexpected issues;
- to thrive, businesses must keep up with customer expectations about impact and sustainability.
However, as unexpected as it was to see them do away with cups and accept digital payments, I wrote those aspects off as “keeping up with the times.”
The second group’s generosity, however, left us feeling full of hope that business does not have to be limited to exchanging money for a product. While their business model might not stand up under scrutiny (I still wonder if they broke even at a quarter a cup), their ability to serve a side of joy with their lemonade left me wanting to come back.
I also learned an important lesson about the necessity of hands-on learning. The first-hand experience makes everything more vivid. You may remember more about your lemonade stand than the university economics courses you took much more recently. I had not thought of lemonade stands in years, but seeing these parents teaching their daughters important lessons about economics and relationships was heartwarming.
If you’re feeling nostalgic about your old lemonade stand, introduce your kids to the tradition this summer. It’s a refreshing way to learn about the world of work.
And, especially coming out of a difficult year for everyone, remember to instill a sense of generosity. Not every transaction needs to maximize profit.