Build a Sustainable Business by Opening a Lemonade Stand

An unfocused company is an unsustainable company.

On my way to a meeting this week I passed through a small, typical suburban town. Its landscape dotted with single family homes sandwiched between apartment complexes, duplexes and gas stations. A melting pot of income levels and careers. On the front lawn of one apartment was two young boys. They were sitting behind a lemonade stand they fashioned from moving boxes and a folding table. On the table was a pitcher of lemonade and a homemade sign. Lemonade. 25 cents.

What stood out to me was their care free attitude toward their lemonade stand. In front of them, their business and potential revenue stream. Revenue that would, more than likely, go toward shiny new toys. Something every boy wants more of. Yet, they weren’t yelling at passing cars. They didn’t have stacks of glasses ready to fill with refreshing lemonade. They were enjoying what they built. They were happy with what they had and didn’t let the concept of more change their approach.

What kind of lemonade stand do you have?

If you were to project your current approach to business, blogging or social media onto running a lemonade stand would it be similar to the boys I spoke of? Or would your approach be closer to the kids who count the profit with each sale? You know, the ones who have that extra large sign, yell at cars and have numerous cups pre-filled with lemonade ready for potential customers.

Selling the dream. Buying the hype.

Even the best revenue projections are only educated guesses.

Once you begin to quantify your business model against potential you set yourself up for failure. Look at the stock market. All of the experts set target prices for companies based on estimated earnings. The market jumps and falls every second. When a company releases official quarterly reports, more than likely, they are above or below expectations. Even the best revenue projections are only educated guesses.

If the boys started their lemonade stand because they wanted to earn enough money to buy new candy or toys they would be pre-filling cups and yelling at cars. They would be overly aggressive in courting potential deals. They wouldn’t care about return customers. They would just want as much money from as many customers as possible to reach their goal.

After reaching their goal, one of two things would happen.

1) The boys will settle into the opposite business model. Happy they met their goal, everything above and beyond is just icing on the cake. Essentially, free money in their mind. They stop yelling at cars. Stop pre-filling cups. Stop being aggressive.

2) The boys will realize there is money to be made and become more aggressive. Filling more cups to make it look like they are expecting more customers. Maybe calling a friend to go down the road and hold a sign. Their eyes have gotten bigger and they want to expand. They want more.

Redefining your business model after success.

Even the most laid back people fall into the mental trap of slowly changing their business over time. This is why a mission statement is important. Something you can reflect back on from time to time.

It’s not uncommon to get unsolicited advice on how to improve your business, product or service each day. The key to success is staying true to your business model and mission statement. Adapt when you can become more efficient and better reach your goal. Don’t change when you see an opportunity for new revenue. An unfocused company is an unsustainable company.

How do you approach your business? More importantly, how do you approach your potential customers? Do you get tunnel vision toward growth, profit and shiny new toys?

Photo credit: Rachel Pasch

3 Comments

  1. MikeReplyJuly 26, 2010 at 4:31 pm 

    Well put. There's more important things than money. And there's probably more important things to your customers than what you are selling. A strong sense of mission keeps us pointed the right way.

  2. Joshua GarityReplyJuly 28, 2010 at 10:14 am 

    Thanks Mike! There will always be potential revenue beyond our business model. So to change it on a whim, regardless of how well thought out, can be company suicide. Embrace what you do and enjoy it. Or walk :)

  3. Joshua GarityReplyJuly 28, 2010 at 5:14 pm 

    Thanks Mike! There will always be potential revenue beyond our business model. So to change it on a whim, regardless of how well thought out, can be company suicide. Embrace what you do and enjoy it. Or walk :)

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