Yesterday afternoon, when the temperature hovered around 90 degrees, I passed a corner and saw a couple of young ladies running their lemonade stand. Under the distant but careful supervision of mom, they had small cups of lemonade for 50 cents and a large cup for $1. I stopped and bought a large glass and left a $1 tip; how I love entrepreneurs!
In the above photo the girls are standing by their advertising sign. The girl on the left is proudly displaying the cash that they have earned so far. They keep the cash in their “little kitty” mail box. It looks like the little entrepreneur on the right wants to be a rock star. Selling lemonade must be her first stepping stone to fame and fortune!
Seriously, though, I got thinking about what these young ladies have learned by operating a simple lemonade stand. Some of the things they’ve learned are:
1. The lemonade didn’t just appear; they had to go to the store and spend their money to buy it. In the real world there are costs, not just revenues.
2. People won’t just come up and give you money, they must voluntarily spend it. You can’t force them to give you their hard earned cash. The customer must want your glass of lemonade more than they want their $1; otherwise there will be no exchange. As a lemonade entrepreneur you must trade VALUE for VALUE.
3. Mom wouldn’t approve if you wanted to spend $5,000 to build a nifty, cool kid’s house to serve as your lemonade stand. The lemonade revenue would never pay off the cost. Therefore, you go with what you can afford; a small card table and a cheap sign.
4. Selling lemonade isn’t as fun as playing in the yard. It is WORK! You have to stay at your post, smile at everyone, and say please and thank you! After a while you get tired of sitting out in the hot sun, but you’ve got to stick it out until the lemonade is sold!
I wish our politicians in Washington hadn’t forgotten what these small-scale entrepreneurs have learned. The Government builds fancy buildings that it can’t afford. The politicians borrow money to create programs that don’t create significant VALUE and (unlike good lemonade) the government can only “sell” these programs to us only by forcing us to pay for them. Unlike our lemonade entrepreneurs, the government routinely spends much more money than it takes in, without the slightest regard to the debt created. Finally, rather than encouraging people to work like our young entrepreneurs, the government has enabled millions of Americans to adopt lifestyles of leisure instead of work.
You know the old saying, “Give a fisherman a government check and he’ll never fish again!”