5 Tips to Help Your Child Optimize Their Summer Business (Lemonade Anyone?)
Lemonade Stand: Best Practices
Ah, the dog days of summer! That idyllic time of the year when the kids while away the hours building sandcastles, running through sprinklers, snacking endlessly...and practicing their financial literacy skills.
Wait, what? Yes, you read that right.
Summertime is the Ideal Time to Put Business Skills to Work.
Whether it’s selling lemonade on a hot, humid day, hawking painted seashells on a beach boardwalk or peddling handmade bracelets to family and friends, kids can build their financial literacy and entrepreneurial skills with any small summer ventures.
With just a little planning, parents can help their kiddos make the most of these money moments. How?
5 Tips For a Successful Summer Business
1 Introduce startup costs
Whether it’s the Crystal Light mix and sleeves of plastic cups for a lemonade stand, the paint and brushes for the seashells or the beads for a fledgling jewelry business, most business ventures have some form of a startup cost (or expense of starting a new business). Parents can discuss with their children who is responsible for covering these upfront expenses, as well as remind kids to take startup costs into account when calculating their final profits.
2 Explain the importance of location and competition
Just like real estate, kids will quickly realize the power of a good location. A lemonade stand on a dead-end road may flounder, but one positioned just outside a busy baseball diamond on a hot summer night could prove very lucrative. Typically, the better the location, the higher the profits. Location should also take competition into consideration. If there are three other rival painted rock sales on the same beach, kids might want to reconsider where they set up shop!
3 help them create simple marketing materials
With any small business, good marketing makes all the difference. While a homemade poster is a great place to start for any kid-run venture, spreading the word to potential customers through an email to family and friends, social media or neighborhood Facebook groups will help those profits roll right in. Parents can engage kids in crafting an effective advertisement and watch their business boom.
4 Examine Revenue, costs & profits
Perhaps the best lesson any child entrepreneur can take away from their small foray into the business world is the concepts of revenue, costs and profits. Young kids can understand that revenue is the money generated from the sale of their goods or services. Costs, on the other hand, are the expenses it takes to operate a business (we see you, 50 pack of dixie cups!). Profits, then, are the money left over once the little entrepreneur has subtracted her costs from revenue. Even if parents are footing the bill, a simple profit calculation can make a big impression on a budding businessperson.
5 REmember to Give back
The best businesses give back. If kids choose to put a portion of their proceeds to the greater good, everyone wins. Parents can allow kids to choose a charity that suits their interests and passions, and the mini entrepreneur can determine both where and what percentage of profits to donate. No matter how much or how little kids donate, there’s no doubt that they get more than they give.
Even the most innovative idea or best product does not guarantee a successful business. Kids aspiring to be entrepreneurs need to think about startup costs, location, marketing, revenue and giving back to make the most out of any business venture they might undertake.
Is there a small business you are interested in starting? If so, what will you do to make it a success?
