The economy is affecting my business.
Kids say I make the best lemonade in the neighborhood. My ingredients are: fresh hand-squeezed lemons, real sugar, filtered water, and ice cubes. I charge a premium, 25-cents. My lemonade stand is known for the best-tasting lemonade – fresh squeezed when you order it.
However, the economy has made things difficult. I’m getting fewer customers. Fewer people want to spend their money on a 25¢ handmade lemonade. (They’re settling for Kool-Aid and other just-add-water drinks). Additionally, the cost of cups, lemons and sugar have increased. I can’t pass that increase to customers, so my profit has been reduced.
Here are my costs:
|Costs (per cup)|
|5 ice cubes||
|sign (marketing), table cloth, table rental, flashlight batteries (for evening business)||
Here are some of the options I have thought of… What advice would you offer?
Modify my product
- Cheaper, (lower quality) lemons
- Lemon juice from concentrate
- Fewer ice cubes
- Cheaper sugar substitute
- use 1/3rd lemon per drink instead of 1/2
My product is only water, sugar and lemons… With many of the suggestions above, I’m afraid customers may notice the difference in taste. If it’s slight, does it matter?
- I’ve gone from 25 to 22 cents. Should I lower it more? I’m already making less profits that I used to.
- one neighbor kid staffing instead of two (but this will make the wait times longer)
- find less-skilled kids willing to take less money? (this could affect product and service quality)
- special offers – discount when you buy two at a time (but won’t people think twice about paying full price in the future?)
- try to get new customers by buying and adding a sign on the street corner to attract people from neighboring blocks
- make, print, and hand-out flyers to kids on the school bus and school yard
- I’ve been thinking of adding peanut butter and jelly (pb&j) sandwiches… drive sales at lunch time. (although, pb&j isn’t something I’ve made before… and there’s already a pb&j place near the playground)
How would you help me? What’s your advice? Should I cut staff? Get cheaper ingredients? Invest in more signage? Add new products? Other ideas?