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Wisconsin Parent

Lemonade Stand Tips and Lessons

May 20, 2013 07:41PM ● By Dannelle Gay

What child doesn't get a thrill out of having a Lemonade Stand? The instant gratification of the transaction, the pride in accomplishment, and the decision on how to spend the profits!

{Oh to be young again}

It's time for a Lemonade Stand, included with tips and lessons! We had our big summer garage sale and Miss Sarah wanted to sell lemonade.

Instead of simply providing her with everything and letting her go at it, I choose to turn it into a learning activity.

First of all, let me say that she is no rookie to customer service, after all she is a Girl Scout and has a full cookie selling season behind her.

We started with the white board and brought some math into the mix. How many cups of lemonade can you get out of a standard {two quart} pitcher?

That is two quarts... zpfile000

and 2 two pints to a quart... zpfile001

and two cups to a pint. zpfile002

Grand total?

Eight Cups! I know, you are impressed with my incredible art skills {snicker}

 Now we have to figure out our cost of product.

"Yes, my name is Dannelle and I am a couponer..." {You all say "Hi Dannelle" here, if you are in my support group}

1) I got the Kool-Aid packets for $.07 each (They were ten for a dollar and I used a "buy ten, get five FREE" coupon.)

2) I got the four pound bag of sugar for $.88 and there are nine cups per bag.

(Again, coupons.) That means roughly a dime for the sugar.
3) We need cups, right?
A twenty pack for $.50 (Seasonal clearance sale, no coupons.)
That means a whopping $.03 for each cup, if you round up.
These cups were nine ounces, but we didn't fill them all the way to the top. That made an eight ounce serving and we would use eight cups per pitcher.

$.07 + $.10 + $.24 = $.41

 It cost us just $.41 to make each pitcher, or about $.05 a cup!

Now...what to charge?

If we charged $.25 a cup, that would mean we would have a $1.59 a pitcher profit. If we charged $.50 a cup, it would be a $3.59 profit. We opted for the larger profit as it would NORMALLY cost a lot more to make and we didn't think people would object, but the general rule of thumb is four times the cost (think restaurants).

Fiscal Management Lesson Time: What were the profits going to be used for? Easy - she is saving up for an iPad. I told her that when she saves half of the cost, I will match it. Let's just say she is very focused on that goal.

How did she do? We ran out of cups! She made $39.00 total in gross sales, going through almost ten pitchers of lemonade.

$39.00 sales -$4.10 cost $34.90 profit

{Note to self: buy more cups next time}

She added $30.00 to her bank and kept the $4.10 for "spending money". We put a lot of math into this exercise, and are still learning to save for something - to earn it.
I kinda think those lessons are important for our future leaders, don't you?
 Blessings- Dannelle