Lessons from the Lemonade Stand was written by Kris Reynolds of Tulsa, OK. He offers wonderful lessons for those considering starting a business as well as existing business owners and entrepreneurs.
To support his lessons, Kris uses stories from childhood through adulthood. He is currently the owner of Arrowhead Consulting. There are many stories about people, business dealings, successes and failures.
There is Risk in Everything
Lesson #8: Even standing still is a risk, choose your risks wisely.
Starting a business is certainly a risk. However, even after a business is started, decision making involving risk happens frequently. Embark on a new marketing plan? Hire a new employee? Buy a new piece of equipment? Develop a new product or service? These are just some of the decisions that entrepreneurs have to make.
A process should be in place to help determine these answers. Let’s call it calculated risk-taking. Risk vs reward. Pros vs cons. Investment vs Return on Investment. Probability of success vs probability of failure (there are no guarantees). Happiness vs sadness. These are just some of the attributes that one might consider in decision-making.
Especially for existing business owners, standing still and doing nothing can be risky.
Personality and Business Knowledge Assessment
Lesson #10: If variety is the spice of life, entrepreneurs should expect daily heartburn.
How is your personality when it comes to risk-taking? Do you prefer security and guaranteed paychecks? Do you prefer daily challenges? Do you have an achiever’s mentality? Do you have a passion for achieving a goal that simply can’t be reached from your current position? One should consider these questions before starting a business.
How is your business knowledge? Kris does a wonderful job of giving lessons on many aspects of business including product development, legal issues, goal setting, strategic thinking, time management, negotiating, building a team and networking.
In my mind, business really has 3 main parts: Marketing (including market research), operations and finance.
Marketing generates demand (orders) for goods or services.
Operations fulfill those orders.
Combine those two to create financials. Is there a profit?
There are many details in each of these areas. Certainly, seek some help where needed, but the entrepreneur needs at least a general knowledge in all of these areas, especially financials. Financials are where the rubber meets the road.
A general understanding of income statements, cash flow statements and balance sheets will be very helpful.
There is a vast difference between being a machinist, event planner, landscaper, engineer, graphic artist, etc. and owning a business that provides those products and services.
Are Entrepreneurs Born or Made?
This is the nature vs nurture question. Kris’ childhood stories are similar to my own. Cutting lawns at an early age seems to be a common point. Involvement in multiple businesses is another. One’s upbringing among entrepreneurs is also important. On the other hand, one must have desire from their own heart and mind.
This nice article from Forbes says it probably takes both.
Lessons from the Lemonade Stand has great information for those thinking of starting a business and for those that are already business owners. The juice is worth the squeeze!
Get your copy here.
Note – there are no commissions involved, I simply think it is a good book.