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A Look Into the Business

A Look Into the Business
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Intro
Weather
Types
Clear and Sunny
Cloudy
Hazy
Overcast
Rainy
Other Factors
Future Ideas
Conclusion
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A Look Into the Business
I ran a lemonade stand for a month via a virtual game to learn all the decisions and factors involved in running a business. This process taught me a lot about how difficult it really is to keep a profit after paying for all expenses, worrying about how much should be in the inventory and keeping track of how weather can have an effect. Each aspect has to be considered and manipulated in a way nothing is forgotten. Every choice I made had some sort of influence. It was interesting to see how everything works together in a business. My first month was not all that great; I learned a lot and could highly improve in the future.
The next month, I am confident I could have more success if I consider weather, expenses, and what the customers want the most.
During my experience playing the lemonade game the weather had a huge role on my outcome. I had many bad days and I could see it in my balance. I only had three days in the 90s. This complicated my process because the forecast was something I could not control. Mother Nature does what she wants. I could only control the rest of my choices based on the weather. As the month went on I got much better at making these choices, such as what price to charge on what type of forecast days. Looking at other classmates I can see most people had better luck with the weather then I did seeing as only 3 people had as many rainy days as me and only ten people had more days in the 50s.
Looking at only my clear and sunny days I can see that was when I had the best ratio between potential customers and cups sold. Lemonade attracts people in beautiful weather. The graphs match close to perfectly. I had three total days of this type. This
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A Look Into the Business helped my customer satisfaction a lot in my opinion. I think I would have had even better luck on these days though if the temperature broke 80. Instead I stayed on the lower end with the temperature. Comparing the number of sunny days to the rest of the class I was on the low end. Only one other person had lower then me and very few had three just like me. I feel like if the next month I had more sunny days I would have an even better chance of success. Also, my ice level could have been changed since it was not very hot on these days.
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1 2 3 cups sold potential cust
On the cloudy days, which I had nine of I ended up having more loss then profit. Having so much loss drastically hurt my overall balance. I think I would have been better lowering the price for the forecast. I had days in the 30s and cloudy which put me at a real disadvantage. I also should have lowered the ice on these days so it wouldn’t have been as cold and could have been more appealing. I could have maybe even added more sugar or changed the ratio of sugar and lemons. Just to experiment with different options. I did sell an average number of cups these days but other factors hindered my success.
I had three hazy days and they all were within 50-70 degrees. I had a low number of cups sold compared to potential customers. Once again I should have lowered the price. I needed to find a way to attract more people. The dip in the graph was the reasoning
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A Look Into the Business behind my loss on these days. Even though it wasn’t always a loss it was enough to make a difference. The reason I had some profit on these days was only because my expenses were so low on those particular days which was totally random. If the temperature was a little warmer I may have had a very different outcome.
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14 21 30 cups sold potential cust
Next, looking at my overcast days which consisted of five, I can see as long as the temperature was decent I could hold a profit. These days ended up being very average for me. The overcast day with a temperature of 53 I lost $12.02 which was my highest loss. I should have lowered my price that day to possibly 10 cents. I also lost 9 lemons which shows me I wasn’t careful enough with my purchases which raised my expenses. These would have been good days to experiment with the recipe since all in all. Comparing how changing the recipe up would have been easier to see today then other days when the weather played a bigger role. I wouldn’t know the reason for my success if the weather was all over the place when experimenting.
Last, on my ten rainy days my balance was all over the place. It would have benefited me to drastically lower the price. Even on my hot days I can see a loss because I chose not to lower the price. I could have gone as low as 5 cents and I bet I would have seen a different outcome. I personally wouldn’t wait for lemonade in the rain unless it was more than worth it.
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A Look Into the Business
Also, I bought too much ice on the hot rainy days. I should have stuck with buying 100 ice cubes not 250 ice cubes to lower my expenses. I thought high temperatures mean a bigger need for ice and that was the case in all forecasts besides rainy. The temperature only had a semi influence since most people don’t want to wait in the rain even if it was hot.
Just like the sunny days I was an outlier compared to others in the class. I had the highest number of rainy days and only three others had that same number. There were some people who had less than five and I feel as though even though it was the luck of the draw it hurt my business quite a lot. Once again it was just the luck of the draw. That is similar to many real life business ventures as well.
Throughout the month, I kept my recipe the exact same. I got very few complaints so I didn’t want to take chances. Looking back I wish I would have lowered the ice count on the cooler days to save money in that aspect. Also, I could have experimented a tad more.
Adding more sugar to attract more people or just switching the ratio in general. Seeing how different so many people had their recipes makes me wonder how much my outcome would have differed. There was such a large range from maximum to minimum for the recipe and I stayed consistent. I could have prevented more loss and created more profit.
While consistency is good sometimes so is taking a risk. Business in general is about risks in a way. As long as you take risks and stay with a profit.
Interpreting the graph of my balance I can see it is very scattered. Right at the start I had a large dip since I needed to stock my inventory. Between me learning the best way to purchase inventory and battling the weather it fluctuated quite a lot. Some days were better than others. I had 15 days with profit and 15 days with loss. Half and half of each type of days occurred. Some could look at that as a negative but I looked at it as a learning experience with the glass half full.
By the end though I was consistently moving up which I believe showed my potential.
Although, it took me most of the month I am pleased to say I ended on a good note I believe I would continue to go up with maybe an occasional mishap. My goal would be for a much more linear graph.
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A Look Into the Business
$25,00
$20,00
$15,00
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$5,00
$ balance
$0,00
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It appears the days I had to buy more which causes my expenses to increase I ended up at more of a loss. The dips in the graph tend to fall when the x axis was highest. I should have done more to attract customers to try and balance the field. I should have made sure I was making enough to cover my expenses. I could have made the lemonade sweeter or lowered the price. Also, it would have helped to buy lemons at a smaller amount to avoid the spoilage and lower my expenses. I was average for the amount of cups I sold so I absolutely feel as though I should have been controlling my expenses more. Since I did not control my expenses enough my income was on the much lower side compared to others.
I didn’t lose as many lemons as many did but I probably failed more in the buying of my ice and the time I bought my cups. It is best to stock up when cups are cheap since they do not ever spoil. I probably would not have been on the lower end with my balance compared to my class mates if I was more careful. The next month I would make a log of cup prices to avoid paying more then I should. Organization could have made a huge difference.
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A Look Into the Business
$8,00
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($14,00)
My popularity never reached 100 but for being my first month I believe 91% is very successful. My popularity was always increasing at a good rate. My customer satisfaction did reach 100% which showed me I was good at reading how my customers like the lemonade. It would be my goal for future months to reach 100% in both aspects. That is a set goal to work towards that keeps the customers at the front of my thoughts. When businesses forget to consider customers they are almost always destined to fail. Customers are what keep a business going.
The graph below follows the order of my weather as discussed above. The first three days were when the forecast was sunny and you can see that was when it was the highest for the most part. Following the sunny days were cloudy as well as hazy. You can see the satisfaction was average. The worst days fell on the coldest temperatures. Overcast is next,
Temperature played a big role with overcast because the satisfaction went high at one point which had a good temperature. The rainy days were the tail end and you can see my satisfaction was not great really at all during the rainy days. It was just average and the average probably came from my different pricing.
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A Look Into the Business
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In the future, I would change both my ice level and my prices depending on the weather. I would use 100 ice cubes for even the hot rainy days and I would lower my price to possibly
10 cents unless it was hot and sunny. Another thing I would try would be to buy sugar how
I did on my first month but maybe a little less. I had to lose it all once because of bugs. In the future I would like to even avoid that happening once. I should watch the prices of when to best buy the sugar. Also, I would watch the pricing of cups and stock up on the cheapest days instead of just when I was low. Lowering my expenses would change my results drastically. While expenses are unavoidable it is possible to control them. Everything costs more at different times.
I only changed my price four times. I wanted to keep things consistent. Many others played around with the price drastically where as I stayed between 15- 25 cents. But in the end it didn’t matter as much as the forecast did. Or at least I could have used the price to balance the problems the forecast brought.
Next month, I would be sure to change the price as the weather changed. I would experiment much more and make logs on what people liked the most on what type pf forecast days. Also, I would be interested to see how marketing could affect my outcomes as well. Investing in a cooler so the ice wouldn’t melt every night would also help a lot. In the end, I would also like to eventually make a store instead of a stand to help beat the weather issues. That would be far down the road but an extremely productive important goal to work towards. I could only do that if my business took off in a major way.
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A Look Into the Business
All in all, I can see the forecast strongly correlated with my balance. Also, my choices with when and how much to buy for my inventory is very important. I could have made choices to fix these issues but only to an extent. I could have made my price more attractive but still many people may not have waited around in awful weather. Throughout owning my lemonade stand I learned so many factors come into play and that businesses require much critical thinking. These were all things I had an idea about but never truly realized the amount these choices would come in to play for a business. For one thing I know I would never want an outside business with such unpredictable weather.
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