The Lemonade Stand

So you want to open your own business.  You want to be able to work for yourself, set your own hours, be your own boss. Good for you… that’s tremendous. Your entrepreneurial spirit is to be commended!

I have put together a simple business plan to help you get started. We’ll use the classic Lemonade Stand as an example:

Financing:

Start by going to the bank and asking them to loan you a truckload of money.  Make sure you have a good solid business plan that explains to banker guy why you won’t be one of the 50% of new lemonade stands that fails during the first year and the roughly 90-95% of lemonade stands that fail to make it past five years.

Retail Space:

You will need to find a nice solid cardboard box where you can lease space for $10-$30 per square foot, depending on where you choose to locate your stand.  It’s best to have your box located in a high traffic area and be sure it’s a good, clean, quality box because you’ll likely have to pay for your own utilities, janitorial services and maintenance.

In addition you will need to purchase some signage so people driving past understand that your business is actually a family friendly lemonade stand as opposed to a liquor store.  As most areas have strict signage regulations, make sure to contact your local zoning commission and have your signage proposal approved.  Just some advice… a mammoth sized cardboard sign hanging with a piece of yarn that says LEMONADE - 50 CENTS!… that probably won’t pass as the square footage of the sign will most likely be larger than what is allowed based on the retail frontage you have available.

Employees:

You will need to keep your lemonade stand open at hours that are convenient to your customers and since it’s likely you won’t be able to cover all of those hours yourself, you will need to hire some friendly, courteous employees.  Be sure you are following all legal procedures when hiring, such as using an appropriate job application as well as being aware of anti-discrimination laws during interviews.  You are not allowed to ask questions about age, religious beliefs and favorite flavors of summertime drinks… even indirectly.  For example do not ask “so, do you enjoy lemonade when you are taking communion?” or “lemonade was very popular in the 1950′s, did you enjoy lemonade back then?”  Of the employees you hire, some will turn out to be wonderful.  Others will turn out to be completely dysfunctional losers.  Occasionally some will even steal your lemonade and your cups.  You will not be able to fire them, however, without spending inordinate amounts of money on attorney fees, as they will most likely be classified as “protected” employees.

You may want to consider paying a professional to write and assemble an employee manual that documents all the policies and procedures that your employees will need to follow as they are working in your lemonade stand.  This will help fend off future problems such as lateness, insubordination, taking too many lemonade breaks or arriving to work drunk on Vodka and Lemonade cocktails.  In case problems do arise, however, be sure you have documented disciplinary procedures that will be taken in the case of a transgression.

Professional Services:

There will be a lot of bookkeeping involved so it would be prudent to find yourself a qualified accountant to handle all the IRS requirements, the business taxes, the quarterly filings, the payroll taxes, the sales tax payments, the monthly profit and loss statements and the money embezzling schemes.  A good accountant will cost you a significant amount of money and traditionally will not take free lemonade as payment.

It will also be a good idea to call your insurance agent and buy enough insurance to cover your business when someone chokes on one of your ice cubes or slips on the lemonade you spilled on the floor.  In addition, be sure you buy a decent Workman’s Compensation policy to protect you from that one employee that is sure to get Lemonade Powder Respiratory Disease and who will then attempt to extort money from you.

Technology:

With money loaned from the bank you will need to purchase some computer equipment and Point-of-Sale Cash registers, because everything is done electronically these days and you will need to be able to have e-mail and a website to showcase your lemonade.  The cost of the maintenance contracts on this equipment will be extraordinarily high and inversely proportional to the levels of support you actually receive. In addition, as your customers rarely carry cash anymore, you will need to be able to process credit and debit cards.  Credit cards will take roughly 2% of every sale, debit cards are charged on a flat per transaction rate.

Benefits:

In order to find and retain good quality employees, you will need to offer a suitable benefits package, including health and dental insurance, a qualified Section 125 Flex spending plan, a fair and equitable amount of vacation time and paid holidays.  Once you have decided on an appropriate medical plan that will not bankrupt your lemonade stand, be prepared for your premiums to increase 20-40% per year, every year, until you are old enough to be on Medicaid or until you die or until you just decide to kill yourself because your medical plan is bankrupting your lemonade stand.

Excellent, the infrastructure for your lemonade stand is all in place!  How exciting!

Now you can finally start setting your own hours which will most likely include a seven day, ninety hour work week. Because you are the owner, however, you can put in those ninety hours whenever you want to, except for when you are constantly covering for one of your new employees that has decided not to show up for his shift. Then you can write payroll for your staff even though you personally won’t be able to take any salary for a couple of years because your lemonade stand is hemorrhaging cash-flow.  If you are committed and persistent, however, your lemonade stand will eventually begin to become profitable.

Then Wal-Mart will show up next door and put you out of business.

Congratulations!  Now get the hell back to work at your real job.

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24 Comments

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24 responses to “The Lemonade Stand

  1. Sounds like someone’s been peeing in your lemonade, Steve…hope things get better soon…

    Wendy

  2. Love your entrepreneurial spirit!

  3. My husband has his own “Lemonade Stand”. He is the staff, I look after the computer stuff, and our daughter does the book keeping. Our staff Christmas Party is pretty small…

  4. Fantastic post. I love a post that takes somebody’s dream, ridicules it, and stomps it into the ground. It’s for their own good.
    It was nice of you to give them some advice they could use at the end.

  5. Since its all about location, I say you should camp out on the sidewalk in front of the Starbucks drive through. What are you gonna do Starbuck, sue a kid? Ha! Let’s see that hit the news.

  6. No wonder my lemonade stand never did well when I was a kid. How come you couldn’t have written this thirty years ago. I would have been a hundredaire by now. . .

  7. As an accountant and IT professional and a “once , a long time ago” small business owner, this had me in stitches! Very well done. Oh, so very true!

    Mind you, I thought you had “employ at will” over there?

    • Glad you found it funny. Yes we do have employment at will. That’s all great if you have tons of documentation that justifies firing someone. Still doesn’t stop someone from taking you to court if they choose to.

  8. Well done! Fight the power!

  9. With all the millions of lemonade stands that have been started over the years, I would have expected at least one to become wildly successful and produce a famous billionaire. I guess there’s just not much of a market for lemonade stands.

    • It begs the question: how many successful billionaires though, started with lemonade stands. Of course, when was the last time you stopped along the side of the road and made a purchase from a lemonade stand. I’m not sure I ever have. You’re right, the market is just not there!

  10. Man, you just blow me away with the things you think of. BRILLIANT!

  11. This post reminds me of a shirt I found on Ebay that I keep trying to talk myself into buying “When life hands you lemons…shut up and eat your fucking lemons!” Priceless, just like your post.

  12. Pingback: Retirement? Not quite yet… | The Brown Road Chronicles

  13. Haha! The dream of everyone Life gave lemons. That 95% failure rate probably has a lot to do with Life not giving out sugar and water.

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