When many kids discover the power of money and what it means to them, they want to run their first lemonade stand. Parents willingly indulge in the afternoon fun, helping kids gather supplies, make the lemonade and set-up shop. In this activity, your second or third grade child will practice math skills, learn basic business concepts and figure out financial planning to “make a profit.”
What You Need:
What You Do:
Pick a sunny weekend day without plans on your schedule.
Ask your child if she would like to run a lemonade stand, tell her that you will need to figure out what supplies she will need, how much they will cost, and the price at which she will sell her lemonade.
Brainstorm with your child the supplies she will need to make the lemonade, including ingredients, equipment to make the lemonade and supplies to sell the lemonade. Help her make the list as extensive as possible, and include things such as pitchers, stirring spoons, and other equipment you probably have in your house.
As you brainstorm with your child, differentiate between items that will likely need to be purchased (ingredients, cups) and those that you have on-hand in the house (kitchen equipment, tables.)
Help your child write down these items, breaking them into a “Have” or “Need” list.
Tell your child that you will help her start the lemonade stand by using kitchen and other equipment you have in the house.Tell your child that you will help her research the cost of the items you do not have and will need to purchase so she can run her lemonade stand.
For this exercise, a prepackaged lemonade mix might be easier to explain the concept of profit.
Using an online retailer, find the following:
lemonade mix that provides the number of servings; and
supply of plastic cups equal to or greater than the number of lemonade.
Have your child add up the cost of the lemonade mix and the cost of the of the cups. Help your child divide the total cost of the lemonade mix and the cups by the total amount of servings. Explain to your child that this is the per unit cost for her to make each cup of lemonade.
Ask your child how much she would like to sell her lemonade, tell her that she needs to sell each cup of lemonade for more than her per unit cost. Explain to your child that this is the per unit price to sell her lemonade.
Have your child write per unit price less her per unit cost, explain to her that the difference is her profit. Explain to her that profit is the money she will earn from the sale of lemonade.
This exercise should give your child a basic understanding of the financial aspects of her lemonade stand. At the end of the day, when she closes her lemonade stand, help her count the money she earned and review per unit cost, per unit price and profit to reinforce learning.