Blog

Entrepreneurship

The Lure of the Lemonade Stand: Your Child’s First Business

Are you interested in helping your kid start a first business like a lemonade stand, but need some backup? Consider signing up your budding entrepreneur for National Lemonade Day. Many communities hold coordinated Lemonade Days sometime in May. Signups are underway now.

When they participate in Lemonade Day, your child gets a free backpack filled with everything they need to know about running a successful small business. This includes an explanation of the mysterious “supply costs.” Parents of first-time stand proprietors can tell you: Most kids have no idea that someone actually has to pay for lemonade and other ingredients, then get reimbursed from the stand’s profits. In other words, ingredients aren’t magically produced for free by Mom and Dad.

Adult Supervision Required

Each Lemonade Day setup kit also includes an adult guide. The sponsoring nonprofit organization, Prepared 4 Life, requires kids to partner with a responsible adult—a parent, grandparent, teacher or neighbor—on the project. The guide prompts adults to ask the kids key questions to help them set financial goals, choose a site for their stand, create an advertising plan and more.

This project also emphasizes the three-jar money concept of spending, giving and saving. Once kids earn their Lemonade Day profits and pay for their original supplies, they get to:

  1. Keep some of their earnings
  2. Connect with a local bank to save some of the profits, and
  3. Choose a charity to which they’ll donate a portion of their funds

The Lemonade-Day Advantage

Of course, you can always help your kid start a drink stand—or a dog-walking or lawn-mowing business—on their own, anytime. The coordinated Lemonade Day project just gives your kid’s business some extra structure and support. Plus, local organizers often connect kids with sponsoring community organizations.

Is your community participating in National Lemonade Day? Check the map.

(photo courtesy © Elvert Barnes cc2.0)

How This 8-Year-Old Entrepreneur Took on Parkinson’s

Just when you think you have your kids figured out, think again. Kids are extremely perceptive and will do some amazing things given the opportunity. Take Lily Born, now a 13-year-old entrepreneur who wanted to solve a problem that was personal to her.

The Problem

When Lily was just 8 years old, she noticed that her grandfather was having difficulty drinking from cups without spilling. Why? Unfortunately, Lily’s grandfather suffered from Parkinson’s disease. She approached her father wanting to provide a solution for her grandfather, and he used that opportunity to teach her about prototyping.

The Solution

With Lily designing the solution, and her father helping her with the rest, they successfully created the Kangaroo Cup. Lily used moldable plastic to build several prototypes before finally creating a no-spill cup. The Kangaroo Cup has three legs that make it far harder for someone to tip it over or spill. As it turns out, the cup was helpful for her father too! Lily created another version of the cup to save her father from spilling coffee onto his laptop. This time, the cup was built in a local pottery studio using ceramics.

Kickstarter Success

Lily’s dad loved his daughter’s creation so much he asked her if she would be interested in making more for other people. They spent a lot of time designing a new product out of clay, and ended up traveling to China hoping to learn about production. After finalizing the design and picking a manufacturer, Lily needed funding to make the new dream come true.

Lily and her father made a video for Kickstarter (a crowdfunding platform), hoping to raise $25,000. Not only did Lily pass her goal, but her family had a lot of fun putting together the website and video! People all over the world loved the idea of the Kangaroo Cup and donated over $62,000.

Trial & Error

Now that Lily had the funds and a production facility, she had to perfect her invention. She recognized that there were many improvements that she could make. For example, her friends broke a few Kangaroo Cups playing outside of the house. She even received feedback that people would love a design that was better suited for children, and had more comfortable handles. After several versions of the cup, the final version was created.

The Company & Press

With Lily’s creation now available, she started the company Imagiroo where she sells the cups online. Each cup sells for $13 and ships all over the world. Lily has since sold over 11,000 cups! Moreover, LIly donates part of her profits to support STEM education for young girls, and donates cups to not-for-profit organizations that help adults and kids with mobility issues.

Lily has since shown her invention at the White House Science Fair, and has been featured on CNN Heroes, Headline News, NBC Nightly News, NPR’s Weekend Edition, Fast Company, Business Insider, and more. She loves to inspire others, and is constantly thinking about what will be her next invention.

Financial Literacy - Greenlight Debit Card for Teens

Imaginary Dogs: A Clever Way to Raise Financially Responsible Children

Do you want your kids to be financially stable when they’re adults? Want to avoid having to take-in your wayward son after he’s run out of money, forcing you to shelter him in your basement until he gets back on his feet? Want to make sure your daughter doesn’t waste her entire paycheck on a frivolous, impulse purchase?

If your answer to any of the above questions is “yes,” consider this technique: Have your child look after an imaginary dog for a month.

Why an Imaginary Dog?

When I was in high school, I had a friend named Scott who desperately wanted a dog. His parents were hesitant, worrying about things like, “What if we end up taking care of the dog all the time?” and “Can we afford all the expenses that come with a dog?” But, in a moment of parenting brilliance, Scott’s mom and dad came up with the Imaginary Dog Plan. This plan required Scott to wake up every morning at 6am, walk a leash around his neighborhood, put down an empty food bowl, and then open and close an empty dog crate. Immediately after school, Scott came home and walked that empty leash again, put down the empty food bowl, and spent 30 minutes either vacuuming, dusting, or completing some other household chore as a stand-in for the time he’d have to spend cleaning up after a dog. Additionally, his parents struck a deal requiring him to pay for half of all the expenses that come with having a dog. To prove that he could do this, Scott did extra chores around the house and got a part-time job. By the end of the month, Scott had walked his empty leash 60+ times and had saved $300. By the end of the month, Scott had a real dog.

How an Imaginary Dog Can Help Your Family:

So, how does my friend’s dog apply to you and your family? Simple: the principles Scott’s parents taught him through this exercise are the same principles any kid needs as a foundation for a successful financial life. If your son or daughter wants something, whether it’s seemingly insignificant, like a crazy new pair of socks, or something bigger like a pet or laptop, consider using this technique to help them get what they want while also teaching them the importance of being responsible with their money. Some of the lessons they’ll learn from an exercise like this are:

  • If you want something, you need to work for it
  • You need to consider all the responsibilities attached to making a purchase
  • You need to be fully prepared, financially and physically (with your time, etc.) before making a purchase
  • You should give yourself time before making a big purchase to make sure you really want that particular thing
  • Often, making purchases (especially big ones) requires some sort of sacrifice, so you need to ask yourself, “Is it worth it?”

Obviously, if you decide to try this with your kids, the situations will be different, and you’ll need to adapt strategies. It wouldn’t make any sense for your daughter to walk a leash every day to prove that she’s responsible enough to buy a laptop. Instead, you may start by asking her to save a certain amount of money each week. Then, have her to carry around a fragile place-holder (picture frames, perhaps), proving that she’ll be careful with something as breakable as a laptop. You could even have her do research on how to fix common laptop problems, making sure she’ll know what to do if it won’t turn on one day, or if it gets a virus.

Whatever way you apply this to you and your child’s life, just be sure to remember the main point: If you prepare your kids now to be responsible, both financially and personally, they are much more likely to continue these practices as adults. Try it today, and hopefully you’ll still have your basement to yourself once your kids grow up!