A lemonade stand or a QSR (quick-service restaurant) is a business that prepares and sells lemonade from a stand. A lemonade stand refers to a small, temporary, stand-alone booth used in high-traffic areas to sell lemonade, and a lemonade stand may be manned by one or two people. Please note that a lemonade stand is a business that is commonly operated by children, to sell lemonade.
Available data shows that the lemonade market size is estimated to reach $2,651 million by 2026, growing at a CAGR of 5.7% over 2022-2026. According to a report, Simply Lemonade was the leading refrigerated lemonade brand in the U.S. in 2018, with over 415 million dollars in sales.
Steps on How to Start a Lemonade Stand Business
Table of Content
Conduct Market Research
If you are considering starting a lemonade stand business, you would need reliable market research to be able to maximize profits from the business. The first step in the market research process for your lemonade stand business should be to develop market-based research questions in line with your overall business goal and objective.
In this regard, you should source for information that will help you maximize your business, information that will tell you what your potential market will be looking out for from a lemonade business and also help you operate your lemonade stand with less stress and of course, build the business to profitability.
a. Who is the Target Market for Lemonade Stand Business?
- Campers (Campgrounds and RV parks)
- Sports fans (Stadiums)
- Everyone who resides in the location where you intend to sell your lemonade.
b. Is Lemonade Stand Business a Profitable Business?
Yes, the lemonade stand business is profitable because, according to available data, U.S. lemonade sales amounted to over 451 million liters annually.
c. Are There Existing Niches in the Industry?
Yes, there are existing niches when it comes to lemonade stand business. Here are some of them;
- Self-service lemonade stand
- Full-service lemonade stand
- For-profit lemonade stand
- Non-profit lemonade stand
d. Who are the Major Competitors?
- Alex’s Lemonade Stand
- The “Lemon Sharks Lemonade” Stand
- Plucky Brooklynite
- America’s Lemonade Stand, Inc.
e. Are There County or State Regulations or Zoning Laws for Lemonade Stand Business?
Yes, there are county, state regulations, or zoning laws for lemonade stand businesses. Towns, cities, and counties also have zoning restrictions, designating commercial and noncommercial zones.
Please note that in the United States, it is illegal in 36 U.S. states to operate a lemonade stand. Only children lucky enough to live in California, Nevada, Utah, Colorado, North Dakota, Nebraska, Texas, Missouri, Louisiana, Illinois, New York, Vermont, Rhode Island, or Connecticut can run lemonade stands without permits.
f. Is There a Franchise for Lemonade Stand Business?
No, there are no franchise opportunities for the lemonade stand business.
g. What Do You Need to Start a Lemonade Stand Business?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- Well-constructed Stands
- EIN (Employer Identification Number)/Federal Tax ID Number.
- A Corporate Bank Account
- Lemons, Other Ingredients, Disposable Cups and Straws
Memorable Lemonade Stand Business Names
- Star Kids© Lemonade Stand, Inc.
- Providence™ Lemonade Stand, LLC
- Star Joint© Lemonade Stand, Inc.
- Randel® Lemonade Stand, Inc.
- Drink King™ Lemonade Stand, Inc.
- East West™ Lemonade Stand, LLC.
- Joe Nelson and Co© Lemonade Stand, LLC
- Drink Guys® Lemonade Stand, Inc.
- Big Cup© Lemonade Stand Company, Inc.
- Drink N Go© Lemonade Stand Company, Inc.
- Good Drink® Lemonade Stand, LLC
- Life Good® Lemonade Stand, LLC
- Beach Front™ Lemonade Stand, LLC
- Good Taste© Lemonade Stand, Inc.
- Sun Rise® Lemonade Stand, Inc.
- Forte ™ Lemonade Stand, Inc.
- Drink Depot™ Lemonade Stand, Inc.
- Americana© Lemonade Stand, Inc.
- Cold Serve® Lemonade Stand, LLC
- Right Drinks™ Lemonade Stand, Inc.
Register Your Business
a. What Type of Business Structure is Best for Lemonade Stand Business?
When it comes to the business structure of a lemonade stand business, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits. Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Lemonade Stand Business?
- General Business License
- Zonal Permits
- Signage Permit
- Health and trade license
- Proof of district-issued food manager identification card
- A music license if you want to play recorded, or stream music in your lemonade stand
- A dumpster placement permit that specifies where you can put your dumpster outside your lemonade stand
- Sidewalk permits if you plan to offer outside seating
d. What Type of Certification is Needed to Start a Lemonade Stand Business?
You don’t need any certifications to start a lemonade stand business.
e. What Documents are Needed to Open a Lemonade Stand Business?
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit
- Certificate of Incorporation
- Food and Drinks Handlers’ License
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Contract Document
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering starting a lemonade stand business, usually you may not have any need to file for intellectual property protection or trademark. This is so because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Lemonade Stand Business?
A lemonade stand business will cost from $2,000 – $200,000 to start and that can easily go higher depending on your overall business goals and objectives especially if you decide to have several stands in different locations per time.
b. What are the Costs Involved in Starting a Lemonade Stand Business?
- Business Registration Fees – $750.
- Legal expenses for obtaining licenses and permits – $3,300.
- Marketing, Branding and Promotions – $1,000.
- Business Consultant Fee – $2,500.
- Insurance – $1,400.
- Rent/Lease for small Office – $5,000
- Well- designed stands (4) – $10,000
- Other start-up expenses like phone and utility deposits ($1,800).
- Operational Cost (salaries of employees, payments of bills et al) – $10,000
- Start-up Inventory – $6,000
- Store Equipment (cash register, security, ventilation, signage) – $1,750
- Equipment – $8,000
- Website: $600
- Opening party: $3,000
- Miscellaneous: $2,000
c. What Factors Determine the Cost of Opening a Lemonade Stand Business?
- The number of lemonade stands you intend to start the business with
- The choice of location
- The required licenses and permits
- The cost for purchasing, furnishing, and equipping the lemonade stand
- The cost of insurance
- The cost for registering the business
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms
- The cost for the grand opening of the lemonade stand business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
It is not compulsory to build a new facility for your lemonade stand business because the nature of the business makes it possible for you to quickly position your stands in a location as soon as you get approval.
e. What are the Ongoing Expenses of a Lemonade Stand Business?
- Ingredients and serving materials
- Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
- Salaries of employees
- Marketing costs
f. What is the Average Salary of your Staff?
- Chief Operating Officer (Owner) – $38,000 Per Year
- Manager – $30,000 Per Year
- Attendants – $26,100 Per Year
- Cleaners -$21,000 Per Year
g. How Do You Get Funding to Start a Lemonade Stand Business
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Beach Front™ Lemonade Stand, LLC is a licensed lemonade stand that will be based in Palm Beach, Florida but operate all across major cities in Florida selling lemonade and snacks from our well-branded stands. Beach Front™ Lemonade Stand, LLC has been able to secure all relevant licenses and permits to operate throughout the United States. We will ensure that we abide by the rules and regulations guiding the food and drinks industry.
b. Products and Service
c. Mission Statement
Our mission is to build a lemonade stand business that will meet the needs of all our customers.
Our vision is to become one of the preferred choices when it comes to lemonade stands in the whole of Palm Beach, Florida.
d. Goals and Objectives
The goals and objectives of a lemonade business are to service areas where it might be difficult to quickly construct the convention shops; areas such as carnival sites, construction sites, sporting event centers, campgrounds, beaches, et al.
e. Organizational Structure
- Chief Operating Officer (Owner)
a. SWOT Analysis
- Excellent operational history
- Superb menu list
- Well-branded and equipped lemonade stand
- Excellent customer testimonials.
- The owner is new to large scale marketing
- We will need a loan to launch the business and purchase commercial kitchen equipment
- The owner is currently running the business solo
- Lack of economies of scale.
- Growing outdoor activities
- Lemonade is a great boost to the immune system, too.
- Online market, new services, new technology, and of course the opening of new markets.
- Loans diminish profitability until they are paid off
- The first year will be financially tight while we gain customers and pay off loans
- Competition in the area could increase
- Management of employees requires time, money, and efforts
- The regulatory department could change its regulatory status and decide to enforce strict regulations that can strangulate a new business.
b. How Do Lemonade Stand Businesses Make Money?
Lemonade stands make money by selling lemonades and snacks from their stands and also by selling franchises.
c. Payment Options
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via mobile money transfer
d. Sales & Advertising Strategies
- Introduce your lemonade stand brand by sending introductory letters to residents, facility managers, park managers, and other stakeholders in and around the city you intend to cover.
- Open your lemonade stand company with a party to capture the attention of residents who are your first targets
- Advertise your lemonade stand in community-based newspapers, local TV and radio stations
- List your business and products on yellow pages ads (local directories)
- Leverage on the internet and mobile apps to promote your lemonade stands
- Engage in direct marketing and sales
- Deliberately brand your lemonade stand
- Encourage the use of word-of-mouth marketing (referrals)
a. How Much Should You Charge for your Product/Service?
Most lemonade businesses price their lemonade at $5 or less. The exact cost depends on a stand’s location. Even in high-demand areas, businesses resist going over $5 for obvious reasons.
b. How Much Profit Do Lemonade Stand Business Owners Make a Year?
It depends, but available reports show that on average, a lemonade stand business should net more than $60,000 per year assuming they have steady clientele.
c. What Factors Determine the Amount of Profit to Be Made?
- The number of lemonade stands owned
- The location the lemonade stand business is covering
- The management style of the business
- The business approach of the lemonade stand business
- The advertising and marketing strategies adopted by the lemonade stand business.
- The number of years the lemonade stand is in business
d. What is the Profit Margin of a Lemonade Stand Business?
The profit margin of a lemonade stand business is not fixed. It could range from 25 percent to 55 percent.
e. What is the Sales Forecast?
Below is the sales forecast of a lemonade stand business. It is based on the location of the business and other factors as it relates to such startups in the United States;
- First Fiscal Year: $180,000
- Second Fiscal Year: $240,000
- Third Fiscal Year: $300,000
Set Up your Shop
a. How Do You Choose a Perfect Location for Lemonade Stand Business?
- The demography of the location
- The demand for the type of food and drinks offered by the lemonade stand
- The purchasing power of businesses and the residents of the location
- Accessibility of the location
- The number of lemonade stands in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What State and City are Best to Open a Lemonade Stand Business?
- Riderwood, Washington
- Zionsville, Indiana
- Davidson, North Carolina
- Titusville, Florida
- Tyler, Texas
- Kentfield, California
- Ocoee, Florida
- College Station, Texas
- Campbell, California
- North Chesterfield, Virginia
- Chicago, Illinois
c. What Equipment is Needed to Operate a Lemonade Stand Business?
To operate a lemonade stand, you would need basic equipment such as a portable stand, a commercial juicer, plastic cups, and straw. So also, you should make provision for a water supply system – tank with agitator, stainless steel, and syrup making vessel.
When it comes to hiring employees for a standard lemonade stand business, you should make plans to hire a competent chief executive officer (you can occupy this position), manager, attendants, drivers, and cleaners.
Launch the Business Proper
In recent times, no lemonade stand business opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.
The bottom line is that with proper launching of the lemonade stand business, you will officially inform people in your city that your lemonade stand is open for business.
a. What Makes a Lemonade Stand Business Successful?
- Choose a good location, good menu, and well-branded stands to launch the business
- Hire only competent, hardworking, and trustworthy staff
- Be deliberate with your marketing sales approach
- Encourage the use of word of mouth to promote your lemonade stand business
- Leverage on all available online and offline platforms to promote your lemonade stand business
b. What Happens During a Typical Day at a Lemonade Stand Business?
- The business is open for the day’s work
- The lemonade stands are cleaned and ready for business
- Lemonades and snacks are prepared
- Customer’s requests are taken and they are attended to
- Marketing/website upkeep
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Lemonade Stand Business?
- Good culinary skills
- Customer services skills
- Interpersonal skill
- Business management skills
- Work experience in a QSR (quick-service restaurant) stand or kiosk business environment
- Experience in managing people
- Experience in business administration
- Experience in handling relevant software.