Are Lemonade Stands For The WEAK?

It came to me the other day after talking with a few clients. I thought of a new acronym for business people that choose to not know. First, let me say this is not pointed at any one individual; it is just my opinion of a few friends, associates, and businesses that remain in the dark. Is it fear of the unknown? Will it bruise your ego to find out you were totally wrong about your market? If you answered yes to either one of the questions I have no choice but to categorize you as the WEAK (Without Exploring Alternate Know-how).

What is the Cost of Not Knowing?

Since it really cannot be measured in a way that we could understand let me explain it a little differently by using a true story in my life.

When I was a wee lad I was blessed with my father’s natural ability of business sense. At the age of five years old I started my first business. It was the meanest dang lemonade stand on my side of town. Business was outstanding for me with my featured product of one 8 oz glass of lemonade for 25 cents.

What Motivated Me

Besides the fact my parents weren’t made of money, I had dreams and goals of my own. Like that hot wheel set with the 2 high speed ovals. The one I wanted had the optional speed projector, “The Supercharger Race set”. Each car was given enough momentum with the speed projector to do a lap but if you used too much power your car would crash. You could add on a double loop and make even more exciting around the track every time you got a fresh boost of speed. At the time (1967) the cost of the complete set was about $35–it was the desire and envy of all my friends. At school it was all we would talk about during recess and lunch. Sadly, we were all in the same boat when we approached ma and pa with the same question…”Can you buy me the hot wheels double loop speed projector please mommy–I really, really want it?” Mommy replied with, “It’s too expensive, I’ll think about it for your birthday”. I thought to myself, my birthday is 6 freaken months away!! There’s no way I can wait that long, how can I get this toy NOW?

The Plan

I went to my mom and asked her how much does a can of lemonade cost? She told me 50 cents. I went on to ask how many glasses does one can make? After a bit of thought she replied “Well, I would say about 10 glasses”

That’s all I needed for the light to go on. Let’s see, that’s 10 (units sold) X .25 (retail cost per glass) = $2.50 in sales per can. My cost would be 50 cents, which gives me 2 bucks of pure profit. My little brain was running at a thousand miles per hour.

  • How many glasses can I sell?
  • How long will it take to have enough money to buy my hot wheel set?

These thoughts were running through my head while still standing in front of my mom. She must have seen a light bulb go on because she said “Robbie what are you up to?”

I had already put enough thought into this to say “Mom, can I borrow $1.50?” I was thinking that 3 cans would be all I needed to get my lemonade stand started. If I could sell 30 glasses the first day then I would not need any more money from my mom. My first day of profits would be invested back into the business…30 glasses @ 25 cents= $7.50 – 1.50 (pay mom back) = $6.00- $6.00 (12 new cans of lemonade) – $0 profit first day. After the first day it’s smooth sailing because I won’t owe any money and can afford my own Lemonade. At the end of the week I will have enough to buy my hot wheel set.

OK, so now I am ready for mom’s next question. “What do you need $1.50 for Robbie?” I outlined my ideas with mom and she agreed. I said “All I need is 3 cans of lemonade to start mom, then I won’t ask for money again!” Moms’ final words were, “That’s’ a great idea Robbie and I am going to pick up your lemonade later today, but I need to be paid back by tomorrow.” I agreed.

First Day in Business

I spent the rest of the day in the garage making a lemonade stand out of scrap wood and an old wooden wagon I had. My sign read “Cold Lemonade 25 Cents per Glass”. It was made out of white Bristol board with black hand lettering, stapled to 2 wooden pegs I hammered into the grass. I am all set up now, sitting on my little chair behind of my lemonade stand. At the end of the day I sold 9 glasses of lemonade not the 30 I had anticipated. Time for some quick calculations 9 X 25 cents= $2.25. I have to pay my mom back today so I can give her the $1.50 she loaned me to start my business. That leaves me with 75 cents and 2 cans of Lemonade left over. That’s a far cry from my hot wheel set! How can I sell more? This is tougher than I thought it was going to be! Let me give it a shot tomorrow and see if I can get more customers. I hardly slept at all that night thinking about how profitable my day would be tomorrow.

Second Day in Business

It was a bright shiny day when I woke up. I can recall thinking how great my second day in business was going to be. After a quick bowl of Shreddies for breakfast I was ready to roll. I opened the garage door and pulled my mobile lemonade stand out for business. Our driveway was on a big decline so I had to pull my wagon up the driveway to the front lawn before I could see my world. As I crested to top of the driveway my heart hit to floor, my Adam’s apple got stuck with what I saw. My neighbor, scum of the earth, decided to open his own lemonade stand. His price was 20 cent per glass!! “What kind of mom and dad does he have?” I thought to myself. What shall I do? How can I sell my lemonade for 5 cents more on the other side of the street and why would he do that?

I went in the house “Mommy! Look what Craig is doing, selling lemonade for 5 cents less than me” My mom went to the window and opened the curtains to verify what I was saying. I remember the look on her face, showing me she felt everything I just felt.

“Mom?” I said.

“Yes Robbie” mom replied.

After doing some quick thinking I had this idea to relocate my lemonade stand. Our subdivision was under construction and our street had been recently completed. The construction crew had moved over to the next street. “I want to take my wagon down to Scarden Ave. I know I am not allowed off the street but on the next street over they have construction workers building houses. I think they would buy my lemonade for 25 cents. I don’t want to change my price to undercut Craig; I want to sell glasses of lemonade so I can get the hot wheels set this week.”

Mom agreed with me and offered to drive me but I said I would rather walk with my lemonade wagon.

As I approached the construction site I strategically picked my spot and hammered my steaks in the mud. Within 2 hours I was sold out and had to turn down customers. I made many friends that day, most did not speak my language but it didn’t matter… “Cold Lemonade 25 Cents Per Glass” is a universal language. I remember one of the guys was the supervisor, his name was Gino, and he was the only one who spoke English. I asked him if I could leave my lemonade stand here while I ran home to get more lemonade. He chuckled and said he would guard my lemonade stand with his life.

As I was running home to tell my mom the great news I was scanning the numbers through my head. I just sold 30 glasses @ 25 cents each= $7.50 in 2 hours. What is the best way to go? $7.50 would buy me 15 cans of lemonade. Each can generates 2.50 in sales…15 X $2.50= $37.50. That’s my hot wheel set with lunch at McDonalds!

I stormed through the front door, “MOMMY! I AM SOLD OUT AND NEED MORE LEMONADE!!” Mom was beside herself, she was so proud of me. **Hugs ‘n kisses** while all I can think about is that hot wheel set.

“Can I buy 15 more cans, like now please mommy, can you take me?” begs Robbie.

“Of course, let’s go right now!” replies the greatest mom.

On Friday that week Gino brought his big family to see the jobsite. He had 2 sons and 1 daughter that helped me sell even more lemonade by personal delivery. I paid them 5 cents for every delivery. To make a long story short, after spending the rest of the week at the job site with my lemonade stand.

My total sales were 630 glasses of lemonade @ 25 cents each- $157.50 – $1.20 for deliveries- $156.30 clear.

Why the Long Story?

The reason I have shared this story with you is to communicate the acronym’s true meaning. In this case if I was WEAK I would have stayed on my front lawn and duked it out with Craig playing a cut throat price war game. Instead, I changed my future by devising a plan that would sell more lemonade at the price I wanted. After one week I bought my hot wheel set, extra hot wheel cars, a Verti-Bird Helicopter and treated my family to McDonald’s dinner.

Which Comes First, Ego or Profit?

WEAK (Without Exploring Alternate Know-how) cannot be measured. If you do not have an opened mind to explore other ideas then you fall into the realm of WEAK. As a website analyst WEAK people are their own worst enemy. They are willing to pay for good analytics, even good personnel to create actionable measures, but that’s where it stops. The battle is often one of ego, where acceptance of change translates to, your original plan was wrong. Maybe it’s that ecommerce solution you invested 20k into that has a 98.2% abandonment rate. Whatever the root cause is of your resistance to change…you are WEAK!

Don’t be afraid of wheeling your lemonade stand over to the street where people will buy your lemonade. Without your willingness to grab the handle of the wagon and start walking you are your own worst enemy.

Respectfully,

Robert

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