Start-up money, investment and liability: what does a company need before it gets going?
Before the first customer pays a cent, a stand already costs money: lemons, sugar, cups, a sign, change. This money at the start is called start-up money, and you have to put it up front. Some things, like a good cooler, cost money so that more things work out later. That’s an investment. And if something gets damaged because of the company, somebody has to answer for it. That’s called liability. The guinea pigs’ rule: do the math first, then act.
Good to know: we explain how things work in Germany, where the books are set. Rules and numbers can be different where you live.
That’s how the guinea pigs explain it in Volume 3: Rocky Becomes the Boss!
What is startup capital, and what is an investment?
Before the first customer pays a single cent, the stand already needs lemons, sugar, cups, a sign, a table, a cooler and change. That money at the start is called startup capital. You have to put it up ahead of time. Some things, like a good cooler, cost money but help more things work out later. That’s an investment. Rocky’s fog machine isn’t one. The guinea pigs’ rule: do the math first, then act.
Make it yourself or buy it: which is better?
It depends, and not just on money but on time, too. Squeezing your own lemonade is cheaper but takes a while. Ready-made lemonade is faster, costs more and doesn’t taste as special. A homemade sign is cheap and looks like the kids made it. Mr. Grey: There’s no answer that’s right forever. You have to think it through again every time.
Do kids have to register a business for a lemonade stand?
The book deliberately plays it safe here. For a single small kids’ stand on one afternoon, it’s often enough that adults are around and the organizer knows about it. In Germany, anyone who wants to earn money regularly often has to register a business, so it’s clear who’s responsible. At ten, you don’t set something like that up on your own. You need adults who are in on it. Mr. Grey says: A form is sometimes a friend, not an enemy.
What does liability mean, and what is a GmbH?
When lemonade sloshes out of an overfilled cup onto a kid’s picture book, Christian explains: If something gets damaged because of a company, someone has to answer for it. That’s called liability. Mr. Grey adds: Risks belong to the boss, not to the table. With some kinds of companies, liability is limited, and the GmbH, a kind of limited company in Germany, is one of them. Rocky wants one right away. Mojito says no: You don’t start a GmbH because it sounds bigger. You start one when you know why you need it.
- Start-up money is the money you have to put up front before the first customer pays.
- An investment costs money now so that more things work out later. Rocky’s fog machine isn’t one.
- Liability means: if something gets damaged, somebody has to answer for it. Risks belong to the boss, not to the table.
Startkapital
start-up money
In the books, every paragraph is in German with the English right below it. That way you pick up new words in both languages along the way.
Your turn: take the quiz
No account, no score, nothing gets saved. Just tap an answer.
1. What is Rocky’s fog machine?
2. Squeeze your own or buy ready-made lemonade: which is better?
3. Lemonade sloshes onto a child’s picture book. Who has to answer for it?
Idea, costs, revenue, profit and responsibility.
Volume 3: Rocky Becomes the Boss!
Idea, costs, revenue, profit and responsibility. For kids 10 and up, bilingual German and English, 52 pages, illustrated in full color throughout.
