Beyond the Conference Room Solution
Start a lemonade stand…it’s the process, not the profit.
As summer approaches, my restless children are forever scheming with new and innovative way to earn some extra money. With job growth in most industries remaining flat and since my wife doesn’t really feel comfortable letting our 11 year-old go door-to-door anyway, it’s tempting for a couple of entrepreneurial parents like us to encourage our kids to do what we’ve done — start a business and make some money.
For those of you busy parents, you might think, “what a pain to help the kids earn an extra $5” What’s the point? What will they really learn? Is it worth my (I mean their) time. Or, you might think, “How cute, little Johnnie wants to peddle his concoction and make some money; what a fun little afternoon project”
What I can tell you first hand, it that with my parents’ unwavering encouragement, I started my first business in the forth grade, and it was that singular experience that gave me the confidence and passion to become an entrepreneur. Back in elementary school, I was a baseball card fanatic. However, I had little money with which to fuel my passion. It was then that I had the idea to sell, rather than buy baseball cards. My father and I contacted the Topps Company (www.topps.com) and they set me up as a regional distributor. I bought in bulk, broke down the cases and distributed to everyone in my neighborhood.
My next business was in the sixth grade when I found that being a paper boy did not provide with the work/life balance that I required. With the confidence obtained from working with Topps, I approached the Rockland Review and secured all of the distribution routes in my neighborhood. I then hired several classmates to distribute the papers and a franchise was born.
My next business was in college (Cornell University) where my roommate and I started Sunbeam Sound. We started off small, selling blank cassette tapes to our friends and family. By the end of my sophomore year, we were selling to quite a few of the college campus stores on the east coast. Unfortunately, as the business took off, my grades suffered and we had to shut the business.
Upon graduation from college, rather than pursue a high-paying finance job in New York, I stayed in Ithaca, New York to start an investment advisory service with Dr. Avner Arbel and Dr. Steven Carvell, two professors from the Johnson School of Business. Together we ran that company for two years and our company was featured in over 100 periodicals including: The New York Times, Barron’s, Fortune, Forbes and The Wall Street Journal.
We sold the business in 1889 and I left sunny Ithaca to join Strategic Planning Associates, a boutique strategy consulting firm in New York City. From there, I got my MBA from Wharton and then became a Partner with Mercer Management Consulting before starting The Klapper Institute. And it all started selling a few baseball cards for Topps.
So what will your kids learn from their little lemonade stand? With a bit of engaged adult involvement, as I saw in (www.classbrain.com), their lemonade stand could teach them how to:
Write a business plan that will outline the business, the value proposition, the market size and need, the competition and how you will make money in this business.
Develop intellectual capital in the form of a proprietary recipe for their product
Create a compelling product name.
Analyze potential mergers and acquisitions, should they merge with or acquire another lemonade stand business?
Perform basic accounting to build a basic balance sheet and income statement
Contribute to charity – how much (if any) of their proceeds should they give to charity and if so, to which charity? Will a charitable affiliation help with marketing/sales?
Assess the competition, is there competition in their area- are there other kids or businesses selling lemonade or cold drinks in the area. What is the price of their product? How is the quality? What is the serving size? How are they marketing the product? How can you take all of this information and develop insights to develop a robust business plan.
Manage distribution by having them consider other ways to get their products in the hands of customers. Could they package and sell it to other lemonade stands, to stores etc.
Consider the environment. Will they use reusable glasses or recyclable glasses? What is the source of their product?
Determine whether is pays for them to go organic. What is the origin of their raw materials?
Be aware of external factors that may be out of their control. Weather can affect their business. Watch the weather forecast and alter your hours of operation based on weather conditions.
Obtain the necessary financing required to buy the supplies and other costs to get started.
Utilize focus groups to help them test their offering (size of cup, sweetness/tartness of product, hours of operation) before they go and sell it
How to franchise, is their lemonade stand business format ready for franchising. For example, could they sell their approach and coach others on running a lemonade stand.
Purchase raw materials they will need - lemons, water, ice, sugar, cups, pitchers…
Develop a budget – what you are they planning to spend to get started and what do they expect to sell?
Plan the design and construction of the stand.
Determine the optimal location of the stand with consideration for safety and traffic flow of customers.
Perform market research on consumer behavior (who will buy it , how do they like it, when will they buy it, how much will they pay, size of serving and packaging).
Develop marketing materials – signs, advertising campaign.
Consider the need for partnerships – should they work with a partner and how should they share the responsibilities, the money required to get started and the sharing of the money left over.
Develop a promotion program – what might they do to get people to try their product.
Design the packaging – packaging of the product in fancy or simple cups.
Create a price list – what is the price of the product and what factors should they consider as they set the price.
Ensure quality control procedures are in place to ensure a consistent taste, clean handling of all product and ingredients.
Determine whether there are regulatory considerations that must be obeyed – are there by-laws, laws or regulations controlling business in your area. Do they need permits or some type of license to sell lemonade?
Figure out a staffing schedule – who and how the stand will be staffed( who makes it, who sets up the stand, who sells it , who puts the stand away).
Develop a compelling sales pitch – what they will say to customers as they approach the stand.
Determine safety protocols , to ensure the safety of everyone affiliated with the stand.
Ensure that there is tight security and make sure they consider ways to protect their product and receipts.
While businesses like your child’s lemonade stand may not become the next Apple Computer, they might very well provide the spark to develop the next Steve Jobs.
"When I have fully decided that a result is worth getting I go ahead of it and make trial after trial until it comes." - Thomas A. Edison
Let’s start with an explanation of the title, Beyond The Conference Room Solution. In all of my workshops and in many of my lectures, I refer to the phrase, The Conference Room Solution as a far too common approach used by organizations use to solve many of their most challenging issues.Read More »
The Q-Loop by Brian Klapper
How does an established organization filled with long-time employees, a deeply entrenched culture, and a history of drawn-out planning and development cycles become nimble, innovative, and responsive in today’s challenging business climate? Published by Bibliomotion, The Q-Loop: The Art & Science of Lasting Corporate Change delivers an actionable strategy to help your company rapidly achieve lasting transformational change.