In early June it was reported that a 13-year old sold 3,500 cupcakes over the course of a year to raise the $5,000 he needed to take his family on a trip to Disney World. This story illustrates that the entrepreneurial spirit can strike even children.
So, too, does the Girl Scout Cookie Program foster entrepreneurship. As the Girl Scouts says: “Whether girls go door to door, set up booths at libraries and shopping centers, or sell cookies online with Digital Cookie®, they’re also preparing for a bright future. The Girl Scout Cookie Program lets girls show the world their entrepreneurial spirit as key members of the world’s largest girl-led business.”
A lemonade stand can teach valuable lessons about running a business. But these entries into entrepreneurship should not ignore certain realities for business owners, regardless of their age.
Lessons from a lemonade stand
If you look on Amazon, you’ll find dozens of books with “lemonade stand” in the title. After culling out children’s story books, you’ll see that authors use the lemonade stand to illustrate how this basic business affords important lessons that can translate into running any type of business.
Here are 7 lessons to note from a blog posted on American Express (you can see many more lessons in books and articles on lemonade stands).
- Deliver the best product you can
- Location, location, location
- Brand extensions can kill your brand
- Develop an integrated business growth strategy
- Humanize your business
- Speak the language of your customers
- Have an exit strategy—or not
Children who want to run a business venture…even a lemonade stand…need to comply with the law. This may include vendors permits, health code compliance, and other legal requirements to operate.
But don’t feel overwhelmed because there may be exemptions for child-run businesses. For example, in Utah, cities and counties cannot require a license or permit for any occasional business created by a minor. New York is considering a similar exemption entitled Lemon-Aid Law.
When it comes to federal taxes, there are no blanket exemptions from reporting and paying taxes for minors. But again, if the income is modest, no reporting and no taxes are required.
For example, in 2019, a dependent child with earned income must file a return only if such income exceeds $12,200. So the typical lemonade stand earnings would not trigger any federal income tax compliance issues.
But check on state income tax rules as well as sales tax obligations. Things can get complicated.
Whether your child works for you in your business or ventures out on his or her own, there are important life lessons that your child can learn. He or she can learn about money, business operations, hard work, and more. Not bad for a summer break from school.