Each summer, entrepreneurial kids will hit the driveways of America selling cookies and lemonade to passersby. Little thought is given to the legalities and regulations of this rite of passage because, after all, they’re just kids, right?
At the 2011 US Open in Bethesa, Maryland, a group of kids decided to have a lemonade stand in hopes of earning some money. They were shut down because they didn’t pay the $500 vendor fee. Meanwhile, other (older) entrepreneurs who paid $300 for land use permits continued collecting $60 parking fees so that they could have cars parked on their lawns. After the community protested, the cops allowed the kids to continue, and waived the $500 fine that their parent’s received.
Being the kid of a celebrity doesn’t seem to pull much weight in the cut-throat world of neighborhood lemonade sales either. In 2015, Jerry Seinfeld’s kids were trying to raise some money for their mom’s charity, the Good Plus Foundation (formerly Baby Buggy), which provides clothing and essentials to families in need. The cops were called and the kids were shut down for operating without a permit. Luckily, in their case, a local bakery donated cookies to the cause, and the kids in turn asked for donations instead of selling their goods outright.
But apparently lemonade stands just can’t exist without some kind of government control. Also in 2011, two girls from Appleton Wisconsin were shut down by the local cops to follow a local ordinance passed in June of that year, banning vendors from selling food and drink within a two-block radius of any city event. Later, the cops apologized, and in 2018 (yes, seven years later) the Wisconsin assembly passed a law to allow a minor to operate a temporary food stand without a local permit or license. But, the stand can’t generate more than $1,000 in annual sales and must be operated on a temporary basis on private property.
While I appreciate the sentiment of the legislation, I’ll admit, I’m a bit torn on this issue. I don’t think that the kids should have to pay a $500 vendor fee like in the Maryland case. But, I also don’t think the $1,000 income limit in Wisconsin is fair either; nor should kids result to having to ask for “donations” only in order to circumvent permitting procedures.
I’m all for entrepreneurship. My best friend Lyndsay and I had a lemonade and cookie stand for several years during our annual block-parties. And no, we never were shut down or visited by the health department, or fined because our cookies weren’t made in a state-approved kitchen…even though one of our neighbors was a Detroit Police Officer.
Running a lemonade stand, or any small business really, could be a great lesson for kids…if parents showed them how to do research on what was required in their county or city. So why not go through the whole business process from beginning to end?
- Price the lemonade, water, and materials needed to create the booth to determine the break-even point.
- Go down to the city clerk’s office to see what was needed to set up the business. I agree that a $500 vendor fee is way too hefty for a kid’s lemonade stand. It would be really cool (not to mention incredibly cute) if the city had special kid permits for $5-10, just so kids could go through the process of setting up a business, without the grown-up fees.
- Go through an advertising and marketing plan. (It could be something as simple as waving signs out on the corner or passing out flyers to all of the neighboring homes, or posting on Facebook.)
- Actually run the stand and business.
- Afterwards, go through the income. Determine profitability, net loss, and all that fun stuff. Parents could even take a little out for ‘taxes’ which then could be donated to the charity of the kid’s choosing.
Kids emulate their elders, and demonstrating that you can’t just start a business without doing some leg-work first encourages thinking before action. Develop a plan, do the research, follow-through, reflect and plan again. This is the process every entrepreneur follows, whether you’re running a multi-million dollar company, or selling cold lemonade to your neighbors on a hot summer day.
Until that day comes however, keep in mind that Country Time Lemonade has set up a legal defense fund called “Lemon-Ade“, for young entrepreneurs. While they’re not providing legal counsel, they will assist with any permit costs or fees that come from running summer lemonade stands.
“Life doesn’t always give you lemons, but when it does, you should be able to make and share lemonade with the neighborhood without legal implications,” Legal-Ade says on its website. “That’s why we’re here to take a stand for lemonade stands across the nation.”
You have to hurry though, the Legal-Ade defense fund offer expires 8/31/2018.
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