The days are longer, the air is warm, and the lemonade stands are popping up alongside the grass this midsummer.
I’m not one to pass up a Dixie cup of lukewarm lemonade, especially when it’s served by a grinning, eager child. I’ve been known to slam on the car brakes if a stand is spotted, or walk a beeline across the street through moving traffic to purchase a cup. Sure, the drink itself leaves something to be desired, but taking part in a kid’s journey through the world of commerce, and placing a dollar into their outreached hand is so satisfying.
But, I’ll be honest, I have walked by a lemonade stand without buying a cup a few times in my life.
“Three dollars? Really?” I whispered to my husband after we passed a small stand, piles of small, waxy cups towering over a milk jug filled with the sweet, yellow concoction. A child sat patiently behind his goods while his father stood behind him smiling at passing, potential customers.
“Seriously,” my husband whispered back, “It’s not about making as much money as you can, it’s about learning.”
According to Sharon M. Danes, professor and family economist at the University of Minnesota, very young children won’t gain or lose much from pricing issues, but as children get older, it’s a good idea for parents to discuss business considerations such as supply and demand. In the case of the lemonade stand, they will learn that most people are not willing to pay $3, thus creating an opportunity for discussion.
When parents talk to their children about money, or when they help start a business like a lemonade stand, they are often thinking in terms of how adults look at money. “They don’t think about the age of their children and developmentally how will children think about what they’re doing. That makes a big difference,” Danes says.
Also important, Danes says, is that parents should take their family’s values into consideration. The business tips they offer are often in line with the values they pass on. “[Children] pick up a lot of things about money through osmosis.” In short, what you do on an everyday basis, and how you talk to your child about money can be carried over into their small business endeavors.
But Danes is quick to point out that overcharging for a cup of lemonade, as an isolated incident, most likely is not detrimental. Allowing children to make mistakes is an important part of being a child’s mentor. “The role of the parent is to not blame, but help them think through the consequences of their actions.”
Ron Lieber, author of The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money and “Your Money” columnist for the New York Times, agrees. “Mistakes are awesome — the more mistakes kids make under our roof, and not when they’re in their twenties and on their own, the better.”
Of course, parents shouldn’t condone children taking advantage of other people, but “when it comes to lemonade stands or any commercial activity, you want to lead and pull [children] along — not dictate the terms,” Lieber says.
Offering a mild defense of the overpriced lemonade, he adds that even if it’s a powdered mix and not freshly squeezed, the kid or parents should not be written off as somehow problematic. In fact, he would readily allow the child to price their beverage as they wish. “If I’m the parent and my kid is running the lemonade stand, I want this to be a learning experience.”
Even if there is an established market price in your neighborhood, charging a little more “because you’re really cute” or undercharging “because you want to increase the amount of lemonade you sell — might be a perfectly reasonable strategy,” Lieber says, adding that he would encourage his kids to experiment with price as large companies do. “The market will give them the answer.”
Perhaps my husband and I were quick to see the danger is children selling lemonade for the same price as the local Panera. More importantly, and duly noted, is that when the time comes, we should allow our daughter to make bad business decisions. Even if her $10 cup of lemonade leaves us squirming in our folding seats, it is all part of the learning process.
Megan Margulies is a writer at meganmargulies.com.
Check out On Parenting on Facebook for more essays, advice and news. You can also sign up here for our newsletter to keep updated, or follow us on Twitter @OnParenting. On Parenting can be found at washingtonpost.com/onparenting.
You might also be interested in: