Michael Holthouse, Prepared 4 Life: Inspiring Entrepreneurs, One Lemonade Stand At A Time
Michael Holthouse, the Houston-based entrepreneur and philanthropist behind National Lemonade Day, says his idea for a day centered around teaching youth about business all started with a turtle. Several years ago, his then 10-year-old daughter asked for a turtle, but Holthouse was against buying it for her. When she came up with the idea to do a lemonade stand to make money (and unbeknownst to him, to buy herself the turtle), Holthouse was excited to help his daughter out. He recalls that day being "one of the most amazing days we ever spent together," because it gave them an opportunity to talk about everything related to business -- a topic Holthouse was quite familiar with, having started, grown and sold his network services company Paranet to Sprint in 1997.
After seeing how engaged his daughter was with starting a lemonade stand, he was inspired to translate that experience into one that youth across the country could take part in. Lemonade Day started in Houston in 2007 with an impressive 2,600 lemonade stands across the city. Last year, that number hit 66,000, and another 12 cities signed on to participate. This Sunday, May 1, the fifth-annual Lemonade Day will take place in 31 cities, and 120,000 kids are signed up to participate.
Lemonade Day is the flagship program of Holthouse's nonprofit organization, Prepared 4 Life, which uses experiential programs built around life skills, character education and entrepreneurship to help empower youth to become contributing members of society. With a mission to reach 1 million youth and 100 cities participating in Lemonade Day by 2013, Holthouse has become a role model for the value of entrepreneurship in America, and is well on his way to launching our next great generation of entrepreneurs.
What is it specifically about a lemonade stand that speaks to the spirit of entrepreneurship?
A lemonade stand is iconic in America for a child's first business. It takes all of us back to a simpler time when things didn't move so fast, when families were more involved and when businesses were not quite so complex. I've had the opportunity to talk with tens of thousands of people about lemonade stands, and when I say to someone that we're teaching youth how to start their own business using a lemonade stand, the first thing they do is smile. And the second thing they do is nod their head because they get it immediately. There are lots of summer jobs for kids, whether mowing lawns or walking dogs, but lemonade stands are just the quintessential first business. And, if you do it properly, you can cover every single aspect of starting, owning and operating any business.
You started Lemonade Day as a way to teach kids across the country about the basic tenets of starting and running a business. How do you accomplish that goal with so many kids participating?
Leading up to Lemonade Day, we go out and partner up with as many youth organizations around the country as possible. In order for people to participate in Lemonade Day, they need to register to do it. So we'll be partnered with a local YMCA or church group, and registration forms will be given out to the youth in those communities. Then they go out and find a caring adult that will do the lemonade stand with them -- it could be a parent, a grandparent, a next-door neighbor or even a teacher. The two team up together, and we provide them with a bright yellow backpack full of materials, including an entrepreneurship workbook and a caring adult guide.
The guide gives adults all the questions to ask in order to encourage the youth to make their own decisions about how to run the business, while the workbook is a fun book that has stories of kids who have gone through the whole process. There's a number of steps that both the adult and the child go through, from setting a goal for what they want to achieve from the project, to going through the business planning and budgeting. Then there's the action part, which requires kids to secure a $20 investment from a responsible adult to buy supplies and build their stand. They also are guided through site selection and coming up with an advertising plan.
Lemonade stands are a summer-long tradition. Why dedicate just one day to creating a lemonade stand?
Lemonade Day is a bit of a misnomer, because once a child signs up to participate, they go through a month-long fun and experiential step-by-step process to start their own lemonade stand, and then everyone just starts their business on the same day. On the actual Lemonade Day, it becomes a community-wide celebration about youth, their future, business and the American dream. Since we've created Lemonade Day, the number of lemonade stands done in America has skyrocketed because we do a lot of promotion in the inner cities and we get the entire community involved.
When we get an entire community fired up about supporting and buying lemonade from these kids, it becomes a much broader thing than just one individual child doing the lemonade stand. It's a process that gets the whole community focused long term on investing in our youth and teaching them about business, and about how they can create their own jobs in the future instead of just looking for a job. The thought process for the exact day is that everybody needs a deadline. So we do it at the end of the school year on the first Sunday in May when it's starting to get warm in most of the country. We've all got spring fever and it's the perfect time to start selling lemonade.
Last year, Lemonade Day participants sold a total of $6.8 million of lemonade. One of the main lessons you want to instill in kids is what to do with that money. Talk about the model of thirds -- spend some, save some, and give some -- that you advocate.
At the end of Lemonade Day, the kids usually have a fistful of money, which most don't know what to do with. In their prep materials, we talk about how to distribute that money. Their spending money is for the goal they set for themselves from the beginning to buy something new. For saving, we work with local banks in different cities that encourage kids to come in and open a savings account at no cost, and often the bank will do a money-matching program. Finally, with "share some," we believe all successful businesses should give something back to the community they serve, so the entrepreneur decides where they want their money to go and how much to give.
In Houston last year, the kids sold $4.1 million worth of lemonade in a single day, and those same kids turned around and gave back to the community over a million dollars. Some of these kids didn't have two nickels to rub together when they started this process and here they are giving money to the fireman or their church. What's so exciting and unique about Lemonade Day is that we are teaching kids how to make their own money and how they can hang on to that for the long term and then share it with portions of the community that they care about. It's really a whole life cycle process. We don't want to stop at teaching kids to fish -- we want to teach them how to own the pond. That changes many of the challenging situations that these kids are in from "how do I get a job?" to "how do I thrive?"
What have some of the kids who have participated told you about their experience?
When we ask kids what they got out of Lemonade Day, the common answer is that it taught them how to set a goal. After going through the process, the kids understand that they can make a plan, and when they work at this plan hard and deliberately, they can achieve anything they want. When you experience something, it becomes yours. It's not just about raiding the pantry and dragging the wagon out to the corner, though that's part of it, too. Lemonade Day is helping youth understand how they can take control of their own lives and achieve the American dream.
How do you think your own early experiences played into your dedication to create Lemonade Day?
I grew up in a small farm in Indiana and I'd like to tell you that I did a lemonade stand as a kid, but when only 10 cars drive by in a 24-hour period, sales are slow! I had lots of different entrepreneurial ventures, from a newspaper route to mowing yards and baling hay during the summers. One year I even sold Christmas cards. My extended family owned a chain of furniture stores in Indiana and Ohio, so I very much grew up in an entrepreneurial family. My parents' whole notion of allowance was go out and make money. So I did.
In my professional life, I have been involved in a host of startup companies, many of which have done really well, and when I sold my last company [Parenet] to Sprint, I started thinking about what kind of impact I could have on the world. Because I'm a technologist, I'm all about the future. And if you want to affect the future of this country, you have to affect our youth because they are the only future we've got. There are a whole basket of life skills that we don't teach in schools that are supposed to be taught in families. There are all these kids who are capable of developing wonderful life skills, but for many reasons may be growing up in an environment that's not conducive to producing healthy, happy kids that can positively contribute to our world. One of the predictors to life success is having a vision for your future and a moral compass that guides you. I started the Holthouse Foundation for Kids to provide those learning opportunities. Prepared 4 Life is the operating foundation, and Lemonade Day is our biggest program.
What's your best advice for kids who are going to be running a lemonade stand this year?
It's tough to make a profit if you don't have revenue, so it's all about sales. So pick the right location, smile and be friendly, and try to sell two glasses of lemonade instead of one. And, have a great tip jar!
Name: Michael Holthouse
Company: Prepared 4 Life
The original version of this article appeared on AOL Small Business on 4/30/11.