Growing The Business: Bringing Business Up to Scale
Lesson summary:
The lesson discusses the growth of a lemonade stand business over five years. The company started with one stand and added one each year, reaching seven stands by year five. The price per cup increased by a nickel each year, leading to revenue growth. The costs remained constant at around $1,702 for lemonade, sugar, and labor expenses, but the business still generated a profit margin of over 28% by year five. After paying interest on a loan of $250, the business had earnings before taxes of $2,300. With a tax rate of 35%, the company generated a net income of $1,500 by year five, equivalent to a profit of $1 per share. The lesson highlights the potential profitability of the lemonade stand business for shareholders.
