Lemonade keeps one of the widest margins in food: a cup of fresh-squeezed costs under 50 cents in lemons, sugar and ice. What it pays for is the stand: staff squeezing all day, cups, and the booth fee, spread over every cup sold. A slow, rainy festival can turn a good margin into a loss. Margin = (price − cost) ÷ price. In the example below, a festival cup costs $2.30 to make and sell, its share of the booth fee included, and goes for $6.00, a 61.7% margin. A month of four ways of selling brings $18,060 of sales and about $10,970 of gross profit.
The short version
- Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
- Count your time as a cost, even if you don't pay yourself yet.
- A festival cup: $2.30 with the booth fee, $6.00, 61.7%.
- Lemons and sugar are under 50 cents a cup.
- The booth fee is spread over every cup: count the cups you expect.
- Jugs for parties keep the most.
- TaroStack costs each cup from what each batch used. More below.
A cup, costed
Shoreline Squeeze, the made-up lemonade stand in Myrtle Beach, South Carolina, I use in these examples, makes five gallons at a time, 50 cups, and pays a $100 booth fee for a day it expects to sell 150 cups:
| A cup at a festival | Cost |
|---|---|
| Lemons, sugar and ice | $0.48 |
| Cup, lid and straw | $0.27 |
| Labor, and the booth fee over 150 cups | $1.37 |
| Card fees, 3% of $6.00 | $0.18 |
| Cost | $2.30 |
How the price is set is in how to price lemonade, and when a stand needs no permit in can you sell lemonade from home.
Margins by channel
| Product | Sold where | Price | Cost | Gross profit | Margin |
|---|---|---|---|---|---|
| Lemonade | Festivals | $6.00 | $2.30 | $3.70 | 61.7% |
| Lemonade | School field days, pre-ordered | $3.50 | $2.08 | $1.42 | 40.6% |
| Strawberry lemonade | Festivals | $7.00 | $2.70 | $4.30 | 61.4% |
| Half-gallon jug | Parties, picked up | $16.00 | $3.83 | $12.17 | 76.1% |
The field-day cup keeps 40.6%, priced for schools; jugs keep 76.1%, with no booth fee to carry. A festival that sells 75 cups instead of 150 doubles each cup's share of the fee.
A month's numbers
A June for Shoreline Squeeze:
| Product | Units | Sales | Gross profit |
|---|---|---|---|
| Lemonade, festivals | 1,800 | $10,800 | $6,660 |
| Lemonade, school field days | 400 | $1,400 | $568 |
| Strawberry lemonade, festivals | 700 | $4,900 | $3,010 |
| Half-gallon jug, parties | 60 | $960 | $730 |
| Month | $18,060 | $10,968 |
Festival cups bring most of the gross profit. Every cup here is poured for the person drinking it, or picked up by the party host; a café that asked to buy jugs to resell was turned down, because selling juice to another business brings FDA's juice HACCP rule (21 CFR 120.3), in juice HACCP plan.
Get the calculator
Download the lemonade margin calculator. One sheet: one line for each product and channel, with its price, materials, packaging, labor and fee rate; the cost, gross profit, margin, markup and the price your target margin needs fill in. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The calculator holds one booth fee spread over 150 cups. Rain on a Saturday, or a crate of lemons at twice the usual price, changes the month.
How TaroStack does it
TaroStack costs each cup from what each batch used, so margins sit on real cost.
True cost from the batch. Each batch takes lemons, sugar and cups at the price of the deliveries they came from, so a price rise shows in the next batch's cost.
Labor on the batch. The minutes a batch took are recorded on it, so the hours behind each product are on record.
Margins by product. Margins are reported per product on that actual cost, and a price-creep report per supplier shows whose prices moved.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| What a cup cost | One price from last season | Cost from the batch's deliveries |
| The hours behind a batch | Remembered | Labor minutes on the batch |
| An ingredient creeping up | Noticed late | A price-creep report |
| Margins by product | Re-worked by hand | Margins on real cost |
Recipes, batches, costing and margin reports are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.