Samstag, 4. Mai 2013

Hugo's first Startup - selling lemonade with 300% profit margin

Today there was a huge garage sale in all Mountain View.
Hugo was so excited about our garage sale and always want's to set prices and brought his toys to the sale, as the temperature went up to almost 90 / 30 C celsius. I thought this looks like a perfect opportunity to teach him his first lesson of entrepreneurship, as well to make him some money.

So I asked him if he wants to make some lemonade and sell it in-front of our door. He really liked the idea and immediately helped me to make the lemonade, draw a sign and build his pop-up store in our front yard. (Find the recipe at the bottom!)

It turned out, that lemonade became the top seller of the day and after 3 hours he made 23 dollars. Compared to the 6 dollars we calculated for lemons, sugar, water and ice, this is what we call a
high margin business model with it's almost 300% profit.

If I could teach him how to make that scalable and keeping 50%, I would even become his investor and fund his venture - it's so easy to become an entrepreneur ;)

Update from 5/6/2013

Means 300% to rip off?
A comment on facebook from Daniel B. about 300% profit is maybe to rip off people, reminded me to share some feedback we got from our customers:

1) Two Bikers bought 4
They stopped because our sign catches their attention and ordered two lemonades, paying 2 dollars. After they finished it, they ordered just another two and paying again 2 dollars. I felt a little guilty that they didn't get a free refill, when I heard about it but otherwise it is a pretty good example of customer validation and good product feedback.

2) Crying Girls
Right, girls started crying when their lemonade was empty and her mother didn't want to buy another one. Actually we gave them a free refill even their mother didn't liked it because she was afraid of the sugar in the lemonade. - This was also a good feedback and we may offer some organic and sugar free lemonade next time.

3) Good idea
Finally their were three girls between 21-28 and their went crazy after tasting Hugo's lemonade. They even said this is the best lemonade they ever had and asked us what we put in there.
When we told them, they were really surprised and said this is such a good idea and probably "The best lemonade in my whole life"

I think 300% is just a nice margin, as long as your customers are happy. A good product market fit always can work with a healthy margin to make everyone happy.

How to make it scalable?
Another comment told us, selling lemonade is nice but not scalable. Since I also always look for scalability I thought about it and found this way. If you also want to enter the 300% profit margin business or just want to enjoy the best lemonade in the world, here we go:

The Recipe - of the best lemonade in the world!
(If you click the link you will be asked to pay $1 before you get forwarded. Trust me, it's worth it and also a good example how to make a business scalable which never was before. This payment service (gumroad) is a new business of a teenager and blew my mind with it's simplicity. Just get inspired.

I promise, all the money goes into my 5 year old sons piggy bank ;)

Thanks for reading


Ronald hat gesagt…

Next let him use a natural sweetener or kind or organic sugar and sell it for double the price. "Would you like the white processed sugar lemonade or the superdelicious, healthy organic agave nectar lemonade with a slice of healthy ginger?" The art of upselling ;-)

Thomas hat gesagt…

Great idea :)