I Stop at Lemonade Stands

The day before yesterday, on my way home from church, I turned onto Shasta Road. A few hundred feet down, there was a lemonade stand. I was hot, tired and only about 3 minutes from home. But I stopped, paid 25¢ for a small cup of a pretty decent pink lemonade, and finished it before I made my next right onto Nottingham. I enjoyed it a lot.

Here’s something you probably don’t know about me. I stop at every lemonade stand I see. As much as I love mom, apple pie, Apple, bald eagles and the good old red, white and blue, there is nothing more purely American to me than a lemonade stand.

I cut my business teeth in lemonade stands. As I look back, I should have known even then how much I would love business as an adult by how much I loved setting up and running a lemonade stand.

My friend Jack Anderson and I ran many together. There was nothing more exciting than making the decision on a hot, summer day, “let’s set up a lemonade stand.” Suddenly, we would be in full production mode. There was lemonade to make, a stand set-up to consider, signage, pricing, location.

Many of the business principles that have served me well through the years I learned before the age of 10 in a lemonade stand. Here are three.

1) Traffic is crucial to successful retail.

Jack and I lived about 200 yards from each other. (At the time, it seemed much further. But in reality, it was only about 200 yards.) Jack lived on West Main Street. I lived on West End Avenue. The similarity ends there. West Main Street is an extension of Highway 380 (I never knew that until I just looked it up on Yahoo! Maps). It is a little connector highway that runs through downtown McMinnville, connecting two ends of Highway 70S. It is a busy, busy street. Cars and trucks of all sizes drive on West Main Street to get in and out of the downtown area.

West End Avenue is a street that turns off of West Main Street. While well-traveled, it is nothing like West Main Street. So when Jack and I set up business together, it was never going to be on West End. It was always going to be on West Main.

If I ever have a retail store, I will be on a busy street.

2) Planning and maintaining inventory is tricky, and critical.

Now, I have to say that when Jack and I would open our doors, we did so with no overhead expenses at all. His mom or my mom supplied all of the materials we needed – lemonade mix, cups, water, ice, poster board, supplies. The whole nine yards. (I’ve never really thought about it, but this may be why every business I’ve started I’ve done so with as little initial expense as possible!)

We took it from there. And there was no way to gauge or predict what sales would be. It was always tempting to make a surplus of lemonade. But we seemed to have some prudence. We never made more than we needed – which meant that occasionally, after some inexplicable surge in our business, we would run out. I can remember one time in particular when Jack went back into his house to make lemonade while I talked to a truck driver for what was probably 5 minutes but seemed like an hour. (That in itself is funny. Today, the truck driver would probably not stay. Or, if he did, he would be suspected as some kind of pedophile for talking to an 8-year-old kid. Truth of the matter probably was that he was thirsty!)

If I ever have a retail store, I will make sure I have a good system of managing my inventory.

3) Supply and demand dictate price.

Jack and I ran a low-price operation. We sold lemonade for 2¢ a cup (for a regular size Dixie cup). Occasionally, but not always, we offered a large cup for 5¢. At the time, a small Coke at the movie was 10¢ – so while we were under market for sure, we were not absurdly low. Remember, we had no overhead at all.

But I recall one day when things were different. (Jack, you weren’t around. I don’t know where you were. I can’t remember the exact date, but you could have been eating a trip ham sandwich somewhere in Texas!) On good old West End Avenue, directly across the street from my house, there was an auction. A neighbor had died and her family had decided to sell her house and its entire contents. Starting early in the day, there were dozens, scores, maybe even a hundred men, women and children all over my usually sleepy street.

What a great day for a lemonade stand.

(Here is an interesting side note. As my partner in the venture, I secured a young protege named Macquiddy Bragg. In later years, Macquiddy and I would be in Boy Scouts together. But honestly, at the time of the stand, I didn’t really know him, nor can I recall why he was even there.)

We set up our stand, and I had a bold thought. “There are so many people and not another enterprise within sight of me. I think I’ll charge 10¢ a cup for a small, and 25¢ for a large.” It was extortionate by any of the standards of the day. But it was hot. And the lawn was full of stuff. It was going to be a long day. Seemed like a good time to roll the dice.

It was a bold move, but well-played. When the day was over, Macquiddy Bragg and I had $24. Unheard of. But a lesson well-learned.

The market determines what your product is worth.

Sometimes, when I’m up to my armpits in alligators, I think about the lemonade stands. And when I do, it occurs to me that what I might like to do sometime before I die is have a little place with a cool sign, on a busy street, where I can hand someone a deliciously brewed cup of fresh-roasted coffee, chat about the news of the day and see a smile where there wasn’t one because the product and the atmosphere have combined to create an experience.

That’s why I always stop at lemonade stands.