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Lessons for Littles: Lemonade Stand

Quinn Waddington - Jul 31, 2019

How to teach kids about money is often a hot topic. Parenting ideologies range from money being “the root of all evil” to “making the world go around”, but whatever your stance, it is something kids need to learn about before they grow up.


I have read a fair bit on the topic and there are plenty of tips and tricks for teaching children about finances, but like most things, there is no better way to learn than by doing it yourself. That is where the lemonade stand comes in.


Before I break down this activity, I should note that there are other jobs kids can do that will teach valuable lessons, but the lemonade stand encompasses everything, and my son just opened one last weekend so that is the example I am using.


It all started about a week ago, when my 5-year-old (AJ) ripped a giant hole in our outdoor shade tent. Although very angry at the time, I was smart enough to calm down and speak with him about it rationally. We discussed the fact that the tent cost way more than he had in his piggy bank and to my surprise, he suggested he could make money to pay me back. One problem, he had no idea how to do that. We spoke about paper routes, cutting lawns and lemonade stands and he instantly decided he was going to build a drink stand in our front yard. From that point the planning and learning was underway.



The first thing we discussed is what he should sell. We spoke about the different drinks adults and kids would enjoy on a hot summer day. Beer was his first suggestion and although the sales probably would have been better, we decided against that. We discussed the differences in making a jug of lemonade versus selling pop and water out of a cooler and AJ settled on ice cold lemonade because both adults and kids could enjoy it.


Business Plan

After AJ decided on what he would sell, we discussed what he would need to set up a lemonade stand. His first suggestion was wood so that I could build his own stand. I told him he could just use his kid's table for now. Phew! Eventually he got the hang of it and came up with the following list:

Lemonade mix, Lemons, Ice, Cups, Jug, Signs, Cash Float*

*I added this one and had to explain it a few times, but he gets it now.



As ice was on his list, I explained that AJ could either buy a bag of ice or put in the time to make ice every day that week to prepare. He did just that and filled up two big bowls of ice in the freezer for the weekend. AJ was actually excited to empty and refill the trays each day, something we no longer see when we ask him to feed the dog or pick up his clothes.



On Saturday morning, we went shopping for his supplies. I explained that I would lend him the money, but he would need to pay me back from the money he made selling the lemonade. We compared the costs and quantities of the lemonade and cups and he made smart choices. We discussed that buying bulk would allow him to make multiple jugs for less and washing the reusable plastic cups could save him money as well. AJ decided that adding a couple of fresh lemons to the jug were worth the cost because “it would look nice”. We also looked at the bags of ice and he was happy to see he saved $4 by making his own ice all week.


Marketing and Sales

First, we chatted about pricing a glass of lemonade and how if it was too high, he would likely not sell as much, but if it was too low, he wouldn’t make enough money to cover his costs. He decided on $1/glass, which my age made me feel was expensive but is probably about right for the current costs. Next up, AJ made signs. We discussed what he should put on them and he went with the product, cost and a few pictures of lemons. AJ also decided that one sign on the table may not be enough so he made a handheld sign he could wave to passing cars. AJ was quickly bored waiting for foot traffic to come by, so he took his sign and started making house calls to drum up sales from unsuspecting neighbours.



This was the biggest teaching from this business venture and not for AJ, but for his mom and me. We already knew AJ was a very outgoing little kid who had no problem chatting with new people, kids and adults alike, but he amazed us with how much drive, and initiative he took through this whole project. Whether it was making ice, chatting with strangers or washing the cups after wards, AJ really opened our eyes to how much more he is capable of than we generally give him responsibility for. Independence is such an important trait that we really need to keep fostering in him.



We spoke about the money I leant AJ for his costs, but he also had to borrow some money for a float so that he could make change. I am not sure he really got what the float was until it came time to count the money and we reminded him he need to pay it back. You could see the slight worry in his eyes as he counted out the money for the float and then for the costs, but once we told him the rest was his, he happily added up the profits. We didn’t get in to interest but I thought since the loans were only for a couple of hours, we’d let him slide on that this time.



This came up multiple times in the process, we first spoke of the costs and he added all of those up. Next, we spoke about prices and how much it would take to make a profit. While AJ was open, he was also having to make change and handle the cash for customers. Lastly, he had to count and pay back the loans for the costs and float, and then count up his profits.


All of these lessons were learned from one little activity and I am so happy we did it. AJ is also incredibly proud of himself and asked to do it again the next day. We had to then teach him the lesson of oversaturating and timing, considering the majority of his clients were neighbours and they may not be around on a Monday afternoon to support him. AJ is excitedly thinking up other ideas to advertise and also add to his offerings to make the next stand even better though. I look forward to seeing what he comes up with.


Although I know not all 5-year-olds are up for putting together a lemonade stand, I was amazed at how easily it allowed us to teach AJ so many valuable lessons about business and life. If you can find a similar entrepreneurial idea that you children would enjoy, I highly recommend they take a stab. You may be very surprised what they are capable of learning and doing along the way!