Starting A Business: Fixed Assets and Inventory

To start a lemonade stand business, fixed assets such as a stand need to be purchased, which can cost around $300. Inventory such as sugar, water, and lemons are also needed to make the lemonade, which can cost around $200 for a start-up. Assuming the business sells 800 cups of lemonade per year for $1 each, and labor costs are around $530 per year, the business generates around $800 in revenue but only makes a pre-tax profit of $10, which is a 1.3% margin. After paying interest on debts, the business ends up with a loss of $15.