In Social Studies, we are learning about economics. To do this, we are using the example of a lemonade stand. When we talked about lemonade economics, we learned about business models, profit, supply, demand, expenses and decisions that need to be made when running a lemonade stand. Our project was to create a plan for lemonade stand and to make a commercial to advertise our project. Even though we did not run a real lemonade stand, we still learned a lot about economics and had fun learning it, too!
A business model is a written document that tells how an idea for a service or product will make a profit. They usually include a marketing plan, expenses to pay, estimations for income and how the product will make a profit. Business models are useful because then can help to plan out your idea and can be looked back at to keep mistakes from happening. My business model included what I would be selling which was carbonated lemonade, the recipe I would use, my price which was $2.50 and what aspects of my lemonade and stand would encourage more customers and sales. I also included that it would cost $1.80 to make one cup of lemonade and that this would give me a profit of 70 cents per cup.
When you are selling a product, you have to make decisions so that you make enough profit to cover the expenses. To figure out how to better satisfy my customers, I created a survey so that I could see what they would most enjoy in a glass of lemonade. I found that more people like their lemonade extra sweet, so I added more sugar to my lemonade. I had planned to sell straws for 50 cents extra, but the results from my survey showed that only ⅔ of people would by the straw. For that reason, I lowered that straw price down to 30 cents. I also asked the type of lemonade that other people were making so that I could see how well my lemonade stood out in the competition and I learned that most people were making strawberry or other fruit flavored lemonade. After learning all of this and making these changes, I knew my stand was ready to open up for business!