When you are receptive to being taught – amazing, and powerful, lessons are everywhere.
Even lessons about success in business – from the most unlikely of places – the Lemonade Stand.
My daughter Maci is saving up for a trip to Paris next year. She’s 11, and she’s fluent in French (she’s been studying it since she started school). Meg’s mom (Shirley Steinberg – an Author and Professor) has planned an amazing educational trip to Europe, for Maci and her cousin Luna, and has offered to fund the plane ticket – on one caveat – Maci needs to cover her food and spending money.
We want to support this adventure – but out of principle we don’t want to give it to her. We are entrepreneurs and we understand that nothing (at least nothing worth having) comes for free.
Maci, like her Dad (the apple doesn’t fall far from the tree) is basically unemployable. She’s brutally stubborn and independent (again like her Dad) but very compassionate (like her Mom). She’s innovative (like both of us) and authentic (again like both of us).
So – simply put – we aren’t going to give her the money, she has to find a way to earn it herself.
She has no interest in “getting a job” to earn the money (my heart melts with admiration at this declaration), and she told us that she wanted to start a business.
Perfect! What business can an 11 year old do?
Naturally, a lemonade stand.
Location, Location, Location
Our house is on a golf course, and there is a particular part of the course – about a block away – where the cart path has to cross the residential street to get to the next hole.
There is a green space separating the two lanes, with a cement path for the carts to get through. The cement spot is extra large so there is more than enough space to set up a little table, and still have room for the carts to go by – effectively creating the perfect spot for a “captive” thirsty golfer experience. Maci scouted the location and decided that she would set up shop there. There was only one problem:
There was competition for the spot. We weren’t the only ones that had an idea for a summer lemonade stand, and on the day that we decided she would do one, the spot was taken.
Well – it’s a free country, and no one has an exclusive right, so…..
Success Comes To Those Who Hustle
Once Maci had her mind made up that she was going to do this she determined that she was going to wake up extra early to secure the spot. Only one problem – she didn’t know what she was going to sell.
Here is where her ingenuity and innovation started to kick in.
View Your Product From Your Customer’s Eyes
Maci said that the idea of warm, sticky, lemonade from plastic cups was gross (I happen to agree) and that golfers might be hungry too.
She thought that it would be a better idea, rather than having just a normal lemonade stand, if she could set up her own “mini 7-11” at the spot – with canned pop or bottles of water and sealed treats.
Wonderful idea – only one problem. She had no money to buy inventory to build her 7-11. Easy solution – she made a pitch to the closest investor (mom and dad) to take her to Costco, under strict payback terms. Remember she had to earn her money. Her payout would be net.
Just Because It’s Always Been Done A Certain Way Doesn’t Make It The Best Way
Ok – she was now armed with inventory (albeit as a debtor) – the next step was to figure out pricing. To do this she had to think about the cost of inventory. In her case it was $30. With $30 dollars she had exactly 72 “items” that could be sold.
The products that she had (water bottles, small cans of pop, and small bags of chips) would normally retail around $1 each. Now she did have a strategic location, and a high demand (thirsty golfers) so she might be able to push it to $1.50 per item, but even if she sold every item for $1.50 (which was a stretch) she would only net $78 – which for a normal 11 year old would seem like a $Million.
Not my Maci. She wanted a bigger payout, and she was willing to risk.
Taking Calculated Risks and Understanding Your Unique Value Proposition
Maci then had an idea – what if she didn’t set a price at all? What if she just said “pay by donation” and let the golfers themselves set the price?
Risky, and definitely unique – could it work?
What would be the benefit of something like this?
Well – the golf course is packed with Men – many of whom are self-employed (if they are golfing during the day on a Wednesday) or retired.
A cute little 11 year old girl might remind them of their daughter – or better yet – grand-daughter, and instead of a dollar for a pop, perhaps a $5 bill would find its way out of a wallet. It was a calculated risk, but it was one she wanted to take.
Day 1 net – $150
Day 2 net – $125 (she had to go buy more stock)
Day 3 net – over $150 (again after paying off a third stock order)
Total take in three days – close to $450! I think a lot of adults would be happy with that!
The best story from the three day entrepreneurial experiment – two middle aged women asked her “how much her drinks were?”.
Maci replied, “pay by donation, there is no set price“.
The ladies were aghast. They said “you have to set a price. You aren’t allowed to not set a price. If you don’t set a price then you have to donate all the money to charity.”
I’m not making this up. They actually said that to her! Not sure where they got that from.
That madame is why you are not an entrepreneur. Have fun on your walk.
Maci – well done. You hustled. You innovated. You asked every person who crossed your path, you worked like a little Spartan, and in three days you earned enough to support yourself in Europe (at the age of 11, I might add).