Biz Quiz 101: read the following short, fictitious account and answer the question that follows.
Living the Lemonade dream…
First, you borrow $20 from your dad so that you can buy some disposable cups, some lemons, ice and a little sugar. You spend a grand total of $17.31 You ask your mom for a pitcher and a small table. Ready for biz, right? Well, not until someone first comes out to buy your lemonade. So, you get out your crayons and the empty fridge box sitting in the recycle bin and you enlist your creative talent (aka, big sister) to create a compelling advertisement. Just to make your point, you make a small pile of lemons next to the pitcher. You’ve got 100 cups, and enough lemonade to fill them each once, and you might have a little left over as near as you can tell. You do a little math and realize that in order to cover your costs you would need to sell all 100 cups at 17 cents each. Likely, though, you’ll give a couple of cups away, spill some and may just want a little something to cool your own thirst midway through the day. So you recalculate deciding that you will only sell 75. Works out to about 23 cents per cup. You tack on an extra 2 cents for profit and set out to hawk your wares.
Which part of the above process is the single most important factor in managing your business for success?
I look forward to your responses!