Spring break and summertime are often busy for kids and their parents with camps and other non-school activities filling the long days. One way to pass the time is to add a financial lesson to the mix that gets the children engaged in the entrepreneurial spirit early on in life by opening a neighborhood lemonade stand.
Whether it is placed on the corner of the block near home, curbside, or outside of a busy park, operating a successful lemonade stand can be a great summer activity for kids and their parents, for fun, and to earn a few extra bucks.
The Economics of Lemonade Drink Sales 🍋
How much money can be made from a lemonade stand depends on several factors, the most essential being start-up costs. By going through the startup and management processes with children, you can teach them the economics of running a business, including how much it costs.
Startup costs for a lemonade stand can range from $20 to $500, depending on which items you already have and how extravagant you want the business endeavor to be.
Creating a Lemonade Stand With a Kid
Lemonade Stand Inventory and Equipment
On the lower end of the cost spectrum, you and your children will need these minimum items:
- A few pounds of lemons to squeeze.
- A knife for slicing lemons.
- A cutting board to slice the lemons on.
- Sugar to sweeten the juice.
- A bag of ice to keep the lemonade cool.
- A cooler to store produce and ice.
- 1 pitcher to hold the lemonade (glass is recommended).
- 1 large wooden spoon for stirring.
- 1 ladle for serving.
- Disposable cups to serve customer drinks.
- A spare table or large cardboard box to set the product on and for transactions.
- 1 tablecloth.
- Clean water and paper towels (or rags) to clean the cutting board and messes.
- Paper to make signs for business advertising and to display prices.
- 1 money holder such as a wallet, purse, or waist pack (recommended).
Buying a Premade Lemonade Stand
You can also purchase a prefabricated stand that may cost you a little more upfront, especially when paying for one on the higher end, but that should make it simpler to get started and stay afloat when you buy one that is well-made and designed to be easy for both the parent and child to set-up and use.
Building a Lemonade Stand
It could get even more involved if you build a lemonade stand with wood, but that can look a lot more professional than a cardboard box and could improve your lemonade sales, making it even more fun for you and your child by building something together.
Alternatives to Buying or Building a Lemonade Stand
You could also use a fold-out table or similar to put products on and to make transactions, an umbrella to protect your young loved ones from the sun, and material for signage. However, that could cost you more cash than buying a pre-made one if you don’t have those items lying around the house.
Just keep in mind, the more expensive the start-up costs, the lower the profit margin for your child’s business. Once the start-up process has been completed, kids can get to the fun part – making and selling their summertime beverage!
How Much to Sell Lemonade For? đź’˛
Based on the size of the cup used to serve customers and the location of the business, kids can bring in anywhere between $1.00 and $5.00 for each sale. Over a full day in a heavy-traffic area, a kid could see between 20 and 50 customers, resulting in $20 to $250 or more in sales.
If a stand is up a few days a week for two months out of the summer season, this means potential revenue ranging from $480 to $6,000 and plenty of profit depending on how much you charge!
Pro tip: Want to make even more money? Offer bottled waters and a goodie, too.
Lemonade Stand Revenue Breakdown
Here’s a breakdown of how much revenue the child could reasonably bring in from selling lemonade over a couple of months during the summer:
- Revenue per day: 3 dollar average drink cost + 25 customers = $75
- Revenue per week: $3 per drink + 25 drinks x 3 days a week = $225
- Revenue per month: $3 per drink + 25 drinks x 3 days a week x 4 weeks = $900
- Revenue per summer: $3 per drink + 25 drinks x 3 days a week x 8 weeks = $1,800
State and Local Vendor Permit Issues
Opening a neighborhood lemonade stand can be a profitable endeavor for kids, but it isn’t all fun and games when it comes to the legal aspects of opening up shop.
All but a handful of states require parents to obtain a vendor permit for a lemonade stand.
States That Don’t Require a Business Permit for Lemonade Stands
Yes, you read that correctly, a food service or business permit may be required to run a lemonade stand if you live anywhere other than California, Colorado, Connecticut, Illinois, Louisiana, Missouri, Nebraska, Nevada, New York, North Dakota, Rhode Island, Texas, Utah, or Vermont, where you don’t need to have a permit to operate one.
Whether you or your child gets ticketed is another story. I don’t think most police officers or other public officials want to bother little kids for making a couple of bucks. These laws are primarily in place so adults don’t try to game the system by creating businesses for themselves that avoid taxes and other business laws.
However, should your child open a lemonade stand without a permit, you could face fines of over a thousand dollars for not following state and local laws. This may sound absurd, but it is a reality in many areas.
Double-check with your state, county, and city government offices to verify whether you do or don’t need a business license and vendor permit.
Getting Operation Licenses and Permits is Easy
The good news is that getting a business license or operational permit is inexpensive and a relatively simple process. You can often visit your local business and vendor licensing or permit office to request a temporary “pass” for your child’s activity, providing information on when the stand will be open, what business it will be engaged in, and its location.
Getting a permit comes with a small cost in most locations, but this is nominal compared to the price you and your child will pay for violating the law. Plus, it will teach your child how to operate a business correctly, setting them on the right path for future success.
Having a Successful Lemonade Business 🤝
In addition to getting the correct permits, should you need one, lemonade stands will be the most successful when they follow these tried and true small business tips:
- Price the lemonade to sell – not many people will purchase a $5 cup of lemon juice, sugar, and water, so keep it close to $3 to entice customers.
- Set up the stand in a high-traffic area to gain the best exposure.
- Share the reason for opening the stand with customers, such as earning money for a cause or to help pay for an upcoming event.
- Tell friends and family about the business endeavor.
- Share your operating hours on social media.
- Make yummy lemonade to sell!
Final Thoughts on Kids Making Money With a Lemonade Stand
Most kids won’t make more than $100 a day by operating their own small business lemonade stand. However, they should have a lot of fun, learn valuable lessons associated with being an entrepreneur, and earn a decent return on their investment (ROI).
Be sure to consider the costs necessary to get up and running and follow our suggestions for making a stand successful to create an enjoyable, valuable experience for your children.
Further Reading: Teaching Kids How to Save and Manage Their Money đź’µ
Once children start bringing in the cash, they may need somewhere to put it. Check out our guide to savings accounts for kids to learn about custodial accounts that allow you and your child to share a savings account while earning interest on the income.
Acorns Early also provides numerous resources and tools to help your child save and learn about managing money.
Have fun and good luck!