Bring on the Lemonade Stands

06/28/2009 05:12 am ET | Updated May 25, 2011

Last night, on my way home from work, I encountered my first lemonade stand of the summer. It's pretty unusual to see one in New York, and something about the city atmosphere made me scream inside "don't take food from strangers!," but, of course, I stopped.

The proprietors were two 'tween-age' boys. One of them was attracting attention of passersby (no easy feat in New York) by spinning a dish on a magic wand. Once hooked, customers were asked "small or large" and directed to a sign that listed small for $1 and large for $1.50. (Yeesh!) I ordered one small and was told I could buy two and get one free. I complimented their strong sales pitch, but since I didn't want to be triple-fisting lemonade for the rest of my walk, I took the one and left.

One sip of the "lemonade" and it went in the garbage. Seriously, I've had ice water with a lemon wedge that tasted more like lemonade. Not that I ever expect much out of the product -- I think I can safely say I've made a purchase from every lemonade stand I could feasibly stop at (what can I say, I like to support budding entrepreneurs), and I've never reacted with, "wow, that is good lemonade!"

Why is that? For one, kids know that the quality of the product is irrelevant to the sale. It's mostly about location and sales pitch. I mean, on a hot day, who can really resist a squeaky, "wanna buy some lemonade?" Or, in the case of these boys (who were probably too old to be considered "cute" anymore), they had the magic trick gimmick. Attracting repeat customers is not a concern, because by the time most people might consider going back, the kids have probably already packed up shop.

Most importantly, I think, there's rarely head-to-head competition. Even if there were head-to-head lemonade stands set up, I'm sure the quality of product would still be irrelevant. You would probably stop at the first one you saw, or maybe both. Can you even imagine if you stopped at one, and another adult approached you and said, "don't stop here, there's another stand with much better lemonade down the road"? I mean, really? You'd have to be a real jackass to do that.

In most industries, this is far from reality. The food and beverage industry, in particular, is extremely competitive and largely quality-driven. In fact, this summer, one of our direct (and bigger) competitors is moving into the neighborhood (though I won't say who or where). I would be lying to say I wasn't nervous. It makes me feel like an 8-year old lemonade stand proprietress watching older kids set up shop down the street. Their signs are fancier, their cups are bigger, and they've been around the block a few times before.

If we really were talking about lemonade stands, the smart thing for me to do would probably be close up shop and find another corner. But that's the short-term lemonade stand world. In real life, we have multi-year leases, employees, equipment, etc., so we have to look the older, wiser, bigger competition in the eye and say, "look, I can take you."

It won't be easy. But, then again, I've learned that nothing about owning your own business is easy. However, as long as we have a superior product and friendlier service, I think we'll come out ahead. Also, we can use our size to our advantage, and more nimbly react to our market's demands. I love a challenge, and my mind is racing with ideas. That's what being an entrepreneur is all about. I think we will fare well -- I just wish I had more practice facing competition when I was eight.

So, kids, let this be a lesson to you. And, parents, if you see me at your kids' lemonade stand orating about the reality of competition -- please hand me a cup, and send me on my way.