How to Make a Profit With Your Lemonade Stand

Teaching Kids How to Use Math to Run a Successful Business

kids' lemonade stand
••• Christopher Robbins/DigitalVision/Getty Images

It's a childhood rite of passage to run a lemonade stand during the summer. Unfortunately, so is losing money on the deal. Teaching your kids some basic lemonade-stand math not only gives you a good opportunity to work on skills to stave off summer brain drain, but it can also help your child earn some money.

Skills targeted: measurement, money, multiplication

Calculating the Cost

There are a couple of different ways to make lemonade. Children will have their preferences based on the work involved, but encourage them to figure out which will be the most cost-effective. One way is to make homemade lemonade with fresh ingredients, which requires purchasing lemons and sugar. The recipe will make about 6 cups of lemonade. 

With that information, your kids should try to work out the following problems:

  1. If there are 8 ounces in a cup and the lemonade recipe makes 6 cups, how many ounces of lemonade will you have?
  2. What size cup should buy?
  3. How many cups of lemonade do you intend to sell?
  4. If your cups hold X ounces and you want to sell Y cups, how many ounces of lemonade do you need? Will you have enough if you use the recipe or do you have to double it?
  5. The recipe calls for 5-8 lemons and 1¼ cups of sugar. If you double (or triple) the recipe, how many lemons and how much sugar will you need?
  6. If lemons cost [fill in the cost of lemons], a 5-pound bag of sugar costs [fill in cost] and cups cost [fill in], how much money do you need to start your lemonade stand?

After calculating the cost of making homemade lemonade, your child may decide it’s cheaper to use a lemonade mix. She’ll still need to figure out how many ounces she needs, but what she needs to know now is:

  1. How many cups (or ounces) will one can of lemonade mix make?
  2. How many cans do you need to make the amount of lemonade you want to sell?
  3. How much does the mix cost? Multiply that by the number of cans you need. Is that more or less than the cost of making homemade lemonade?

Setting a Price to Make a Profit

Once your child has figured out the most cost effective way to make lemonade, it’s time for him to figure out how to make some money on the deal. To do that, he’ll need to calculate how much each cup of lemonade costs him. The formula to do that is:

cost per cup of lemonade = total cost of supplies ÷ number of cups

Let’s say your child spent $20 on supplies and has 50 cups of lemonade. Each cup costs him about 40 cents to make. To make a profit, he’ll have to sell each cup for more than 40 cents. It’s up to him to figure out how much more.

If he has an idea of how much money he wants to make, it’s a little bit easier. If he wants to make double the amount of money he spent, he simply needs to double his cost. In the given example, that means each cup would have to be 80 cents.

However, it’s important to help kids think about the realities of selling lemonade in terms of being able to easily calculate the cost of multiple cups and being able to make change for people. Ask your child the following questions:

  1. How much would 2 cups of lemonade cost?
  2. If a person gives you $1 for a cup of lemonade, how much change would you have to give back?
  3. Is it easier to make a change if your lemonade is priced in multiples of 25 (i.e., quarters) or by the dollar?

Other Lemonade Math Considerations

There’s a whole lot of other ways to incorporate learning into your child’s lemonade stand, including:

  • Keeping a traffic graph/tally ahead of time to see what times of day and on what days he’s more likely to have customers.
  • Keeping track of the weather to see when it’s going to rain and when it’s going to be hot.