Students will become online entrepreneurs, taking risks and changing their production method to increase their profit while running a lemonade stand. This lesson might best be taught after students have learned about the basic concepts of productive resources, profit, and loss. Students then would apply this prior knowledge to their new situation as entrepreneurs.
- Recognize risks and rewards of entrepreneurship.
- Analyze data to make informed decisions.
- Explain how the cost of production affects the total profit of an entrepreneurship.
Who wants to be a millionaire? How would you go about becoming a millionaire? (Win the lottery; get a great job, etc.) Today we're going to learn one way people can become millionaires, and you can do it too! It has to do with becoming an entrepreneur. Entrepreneurs use their skills and initiative to launch new business ventures. Their goal, usually, is to earn a profit. They are often risk-takers-- people who see opportunity when others do not. Let's see exactly what it takes to become a profitable entrepreneur.
Lemonade Stand: This page allows students to manage their own lemonade stands in order to increase their understanding of businesses.
My Lemonade Charts Graph: This page allows students to record decisions that they made when handling their lemonade stands.
My Lemonade Charts
- In order to keep track of their decisions, have your students fill in the chart provided by the website. Please note: The chart amounts to a three page document. The other option is to have students make their own chart. If you'd like to help your students get off to an easy start, use the website chart to produce an overhead transparency, for use as an example; then have the students make their own charts.
Discuss the different parts of the screen:
- The opportunity to buy advertisements for the lemonade stand. Also, the opportunity to decide how much each student wants to charge for his or her lemonade, and how many cups each student wants to make for that day. Make sure they understand how to put the information into the appropriate categories on the chart.
- Point out the importance of the weather forecast and how it will affect the amount of capital (money) the students will receive. (This information will be listed at the top of the screen inside the television.)
- Demonstrate that after being satisfied with their selections, the students can open another screen by clicking on 'Go!'. This screen will show profits along with assets and net production: the students will record this information on the paper.
- Continue this process, reminding the students to note decisions on the chart as they go. At the end of 30 days the students will stop. Each student then will receive an overall score for his or her lemonade stand. Discuss: Did the students make a profit at the end, or did they go bankrupt?
- Have the highest scoring entrepreneur share his or her decisions, explaining what he or she did to earn a profit over the 30 days. Encourage class members to ask questions and comment on this presentation.
Have the students fill out this open-ended activity to see if they can explain how their decisions influenced the outcomes of their lemonade-stand activity.
Describe two negative decisions you have made, and what you learned from them.
Describe two positive decisions you have made, and what you learned from them.
- What could you have done to increase your profit?
The simulation is intended to help students understand how day-to-day decisions affect a business, and to appreciate the risks entrepreneurs accept daily. Would your students change their decisions tomorrow, based on what they learned today? How does this experience affect other decision-making strategies? What economic factors influence an entrepreneur? Might there have been multiple factors influencing the success of the student's businesses (supply and demand, weather, price per cup, etc.)? Under what conditions would operations be shut-down (to explain the effect of weather, you can also use the examples of Ice-Cream Man and the local swimming pool)?
Have the students use what they have learned to see if they can improve their business results. Let each student replay the "Lemonade Stand " game to try to better their total income. They should use their My Lemonade Charts and their essay question answers to obtain information that will help them improve their scores.
“I love this activity!”
“A great activity to go along with this as an introduction would be to read the story "Lemonade for Sale". It would really help to impact the lesson!”
“This would be a great lesson to be used with Alex's Lemonade Stand, which lets students hold lemonade stands to raise money for kids with cancer! I did it with my fifth graders and raised over $3,000!”