By Steve McKinney

McKinney Consulting Inc.

Get ready, get set, hike! Adrenalin rush, blood rushes to my right foot as I explode from the scrimmage line. Straight down the field I run for 7 steps, then a quick ninety-degree turn to the left and 3 short steps. Arms stretched out with my eyes looking back towards the incoming football, and ‘SMACK’ simultaneously I have the ball in my hands; the defensive player crashes into me and we hit the ground … touch down!

The best business models have at least one thing in common with the best football plays, they’re simple. My first business enterprise was simple; I set up a table and sold lemonade in our back yard. A quality delicious product provided my thirsty friends just what they needed after a session of full tackle football in the back yard. We played hard and had a lot of fun usually without incident, except for that memorable time when I could see stars after a particularly ferocious tackle to the ground.

The lemonade stand is where my generation learned about business. The business model was quite simple. All you needed was some lemonade that tasted good; provided right on the side of field at the time when the customers were the thirstiest. The quantity and price was set to meet what the market could bear with a comfortable profit margin.

As a child I enjoyed watching the television show "Little Rascals" on Saturday mornings. Those kids were the first entrepreneurs I ever remember seeing. They were always coming up with little businesses, sometimes succeeding, sometimes failing. But their business models were always simple like the lemonade stand.

However, even a simple business models need some structure. My suggested structure comes from the inspired words of Thomas S. Monson who said: "Learn from the Past, Prepare for the Future but Act in the Present."

Learn from the past!

From each experience that we encounter we can learn something. The lemonade stand venture is no exception and provides us with some valuable lessons.

Prior planning was necessary to order the materials required to make the product. Mom only went to the grocery store once a week so if I had any chance of getting the instant lemonade mix I had to "be a good little boy" and go with mom to the grocery store, assist her and then pick out my lemonade mixture of choice. Otherwise, come game day there would be no lemonade. I guess the "be a good little boy" part was an early tutelage on company politics, internal – external communications and teamwork.

"Man cannot live by water alone." However, if I did not figure out a way of getting a supply of fresh water to the lemonade stand on game day the lemonade mix would just be wasted and of no use. Substitutions some times work, but some times they don’t. One time I tried mixing my lemonade powder with water from a green water hose. I don’t advise this choice as it had a kind of rubbery taste to it. The lesson here is if the quality of your product diminishes, so will your sales.

The tricky part about the lemonade stand business was the delivery. The product sold best when it was delivered cold, ice cubes and all right at the end of the football game. Do you know how many small blocks of ice you can get in those ice trays in the refrigerator? Not very many. If you have other kids in your house they have a habit of using the ice as well. Who would ever have thought that a competitor would have come from this angle, attacking my supply source?

Too often we get in a hurry and think that there is nothing to learn from the past. Smart people and organizations ‘do their homework’ when entering a new market or offer a new product or service.

Prepare for the future!

We all know that change is inevitable. We are foolish to think that we can continue to conduct our business in exactly the same model year after year. The lemonade stand venture has also taught us a little bit about preparing for the future:

Eventually, mom caught onto the fact that she was supplying my materials (lemonade mix) for my small venture, the lemonade stand. My huge profit margins begin to take a big hit when I had to start paying grocery price (retail) for my ingredients. So, shopping around for the best supplier and price was a new task that took on additional skills. The cans that got dented during shipment were a fantastic deal, a real gold mine as they were usually marked down 25 to 50%!

Even the youngest of customers would watch TV and listen to their buddies' opinions on what is cool and what is not. New flavors were systematically tested anticipating the customer’s ever changing palate.

Eventually, I began to understand that to prepare for the future I was not just selling lemonade with new flavors but that I was actually in the concessions business and would one day sell hot dogs as well!

One of the lessons here is: Prepare for the Future. Study, plan strategies for future growth and possible new directions.

Act in the present!

The genius of this wisdom comes when one ‘acts’ upon these lessons that history has taught us.

The best way to try out new flavors was to provide small samples just to wet the appetite. Acting daily upon weekly goals, allows you to accomplish weekly goals which in turn yield yearly success.

Simple action steps taken daily in small doses is what leads to success. Selling 10 cups a day of lemonade adds up to 70 cups a week, 280 cups a month and eventually 3640 cups a year.

With all of this thought, planning and strategy, never forget what the customer wants. They want a cool cup of delicious lemonade right after they have finished a hard won battle of football.

Conclusion:

Too often we make our businesses too complicated. In reality business should be simple just like the lemonade stand. Vast empires have been created and future organizations will be built based upon this simple yet sound principle of Learn From The Past, Prepare For The Future, and Act In The Present! 

Steven B. McKinney is the founder and president of McKinney Consulting Inc., Korea's most trusted executive search firm.  McKinney Consulting offers a comprehensive range of personalized, professional resource services to a wide cross-section of companies operating in Korea and Asia.  Mr. McKinney is a globally established commentator on international management.  He can be reached at This email address is being protected from spam bots, you need Javascript enabled to view it