Gather a group of successful CEOs in a room and ask how many of them had lemonade stands when they were kids. According to Michael Holthouse, the founder of Lemonade Day, they'll all raise their hands. So Holthouse, a Houston-based serial entrepreneur who founded Prepared 4 Life, a not-for profit that focuses on at-risk children, decided that lemonade stands were a pretty effective early entre into the world of entrepreneurship. Four years ago, he launched the first Lemonade Day in Houston, working with city officials and business groups to register kids for the one-day event. Each child is required to sign up with a 'caring adult' – a parent, teacher, or mentor – who guide them through a month-long pre-launch period. 'Each child is given a yellow back pack filled with material, including an entrepreneur's guide,' says Holthouse. 'They go through a step by step process, setting goals, building a plan, going out and securing an investor. They borrow $20, negotiate terms, establish when the note comes due and what happens if they default. They come up with an advertising plan, and they build their own stand. They take a trip to grocery store and learn how to do comparison-shopping, and they calculate expenses. The objective is to expose them to all the elements of starting a business.'
Holthouse's goal his first year was 2,000 stands, but he ended up with 2,600. Last year, the number swelled to 27,000, and this year, on May 2, Lemonade Day will launch 80,000 stands in 14 states. He has an extensive database that lists all the participants and the locations of their stands, which he shares with local law enforcement to keep everything safe. While Holthouse initially financed much of the operation himself, participating communities now do local fundraising to pay for the backpacks and the planning materials. And Holthouse gets local banks to help the young entrepreneurs set up savings accounts. 'Once they're done with Lemonade Day and they have some cash, we ask them to spend a little, save a little, and share a little,' says Holthouse. Last year, he says, Houston's lemonade stands sold 2.2 million glasses of lemonade at an average price of $1.14 a glass. 'The kids turned around and gave back half a million dollars to the community—shelters, food banks, churches,' says Holthouse. His goal: a million lemonade stands in 100 U.S. cities by 2013. 'If we're able to introduce entrepreneurship to a million new youth in two years, the future going to look very bright.'
Did you have a lemonade stand as a kid? Do you think the simple act of selling lemonade can teach valuable business lessons to young people?