Lemonade Stand (Photo credit: adwriter)
Sue has a lemonade stand; she started the stand a few years ago when she was 10 years old.
While it was slow going in the beginning, Sue stuck to it and eventually built up a customer base. Sue has hired her younger brother and a neighborhood girl to help her with the stand. There are times when she is not available and she needs the help. Sue pays both of them a wage they all agreed was reasonable and all are happy with the conditions.
Sue takes a fair wage for her efforts and puts a small amount of the profits in a savings account for her college education. Sue is an industrious young lady and should be an example to all.
When the traffic began to diminish last summer Sue added homemade cookies to her offerings. This helped maintain a viable business. Mom made the cookies and was paid for doing so.
While Sue’s lemonade stand/ cookie shop was not increasing in income or wealth, it was a profitable endeavor.
A neighborhood boy noticed this and suggested to Sue that he could increase her revenues and profits with marketing tools he had learned in school. He eventually convinced Sue to allow him to take over the operation of the lemonade stand. Giving her a large sum of money and promising her more in the future.
Once he gained control the first thing he did was borrow as much money as he could using the stand as collateral. He would use this money to advertise and look into automating the cookie making process.
Of course this wise decision did warrant a bonus for him as his time and expertise were worth something.
The moves he had suggested were not in place yet when he found the stand to be low on money, this required the layoff of both helpers and cutting back on the amount of lemons used in making lemonade.
As the quality of the lemonade decreased and the hours of service decreased, sales and income followed suit and decreased also.
The neighborhood boy had no option but to take funds from Sue’s college fund to keep the stand open.
This money made the stand prosperous again and so the boy again gave himself a nice bonus for making such a wise decision.
This action of course left the stand with massive debt and no way to pay it off. Consequently the boy went to court and declared bankruptcy. The judge a sympathetic soul agreed with the boy, he had worked diligently to make this a profitable business and should be allowed to forget all debts, take what he could of the remaining funds for his efforts and be done with it.
And there my friends you have another victory for a vulture capitalist. Enjoy!
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