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Key Idea: Make the Cash Flow

In 1948 Angelo DeLucia started selling an old family recipe.

Key Question:

A: 

Try ideas until something starts to make sense and make profit.  When Angelo came home from serving in the military in World War II, his father opened a bowling alley,.  He didn't like dealing with the employees and left Angelo to make a go of the business.

Q:  What was the big downside to the bowling alley?

A:  The building did not have air conditioning and would get so hot in the summer that customers stayed away. That's how Angelo got the idea to make and sell his grandfather's lemonade recipe. When his wife told him to choose between the two businesses, he chose lemonade. The was good profit and it seemed to him that everyone who tried Del's came back for more.

Customers will tell you what they want. We studied Joe T. Garcia's Mexican Restaurant and learned that all the growth of the business over the years has happened by stumbling on to an idea. The bakery, the catering, the outdoor dining and the bottled salsa all happened without much planning or struggling.

Angelo's wife was wise when she asked him to either run the bowling alley or the lemonade stand, but not both.

Q:  Why didn't Angelo just hire someone to run one of his businesses for him?

A:  Because that's easier said than done. And, the debt his father had gotten him into over the location of the bowling alley probably meant he had no cash flow to hire a manager. Usually tiny new businesses can't afford any employees other than the founder.

By getting rid of the bowling alley, Angelo had time to make Del's a success.

Andy Murstein's grandfather at Medallion Funding told him there are riches in niches. This is why Medallion has stuck to what it knows for nearly 70 years. Andy Wilson of Boston Duck Tours has had offers to expand to other cities but he says he wants to stay focused on his 50 employees in the one location. Don't be distracted by ideas that could pull you away from a complete focus on your core product or service.

Think about it

What have you tried that has not worked?  What type of business seems interesting to you?  What special knowledge or skill do you have?  What kinds of businesses are your friends and family involved in?  What do you like or not like about those businesses?

Clip from: Del's Lemonade

Cranston, Rhode Island: This episode of the show is about the all-American childhood business, the lemonade stand. But here, we meet Angelo DeLucia, who did it a little differently. He took his lemonade stand global and who would think that a lemonade stand that opened in 1948 would still be serving hot, thirsty customers.

Meet Angelo DeLucia. He developed a franchise because he knew he could attract more talent by franchising than by simply hiring employees. You don't have to be MacDonalds or Burger King to franchise your business. But, keep this in mind; to be a businesses you must have a product, processes, and people. If you want to develop a franchise, the product and processes really have to be solidly in place.

Your franchisees supply the people and the management.

Angelo had his recipe, the family's old-world Del's Lemonade, and he had the processes meticulously defined. These processes are standard operating procedures so the product looks -- and in this case tastes -- the same no matter where a customer experiences it.

Del's franchise owners serve up the same delicious beverage in Tokyo as Angelo serves here in Rhode Island.

Franchising can be a great way to grow your business. It has worked for thousands of companies and can work for you too. 

Go to all the Key Ideas and video of this episode...

Del's Lemonade

Angelo DeLucia, founder

1260 Oaklawn Avenue
Cranston, RI 02920

Visit our web site: http://www.dels.com

Business Classification:
food

Year Founded: 1948

Make the Cash Flow

HATTIE: Hi. I'm Hattie Bryant. This series is about small business, and today you'll learn about a lemonade stand that has gone global. Every week we introduce you to the founders and operators of small businesses. From Tampa to Seattle and from San Diego to Boston, owners tell us how they do what they do. We call this 30 minutes a Master Class -- no journalists and no academics -- just real business owners who teach you out of their personal experience.

Unidentified Girl: Can I please have a...

This is probably what most of us picture when we think of a lemonade stand. It's the archetype of American entrepreneurship.

CHARLEY ABERG: One cup.

HATTIE: (Voiceover) This is Charley's lemonade stand, and Charley Aberg works hard to quench his customers' thirst on a hot afternoon in Dallas.

Unidentified Boy #1: You gotta give some to Michael.

HATTIE: (Voiceover) In Cranston, Rhode Island, we found a lemonade stand that's been around for 50 years, and business is still growing. This is Rhode Island's pride and joy, ice, lemon juice and sugar, mixed just right and frozen. It is refreshing.

So how many Dels do you think you've consumed?

Unidentified Man #1: Oh, quite a few. Probably about 1,000, 2,000. Since I was little, I've had them.

HATTIE: (Voiceover) Del's is so popular, both the mayor and the lieutenant governor showed up to celebrate Del's 50th anniversary.

Unidentified Man #2: Here is one family that has grown a business to where it's really a very recognizable product, even outside our borders, and in turn, employs a lot of people.

HATTIE: (Voiceover) Fifty years ago, in 1948, Angelo Delucia sold his first Del's frozen lemonade from this spot. Today there are 45 franchises operating in eight states, and you can even buy a Del's in Tokyo.

Angelo, when did you first taste this recipe?

ANGELO DELUCIA (Del's Owner): When I was about 10, 12 years old. My dad used to make this in front of his house, on his street, and then the war broke out and it just stopped. There was no more sugar and no one to buy, so he decided--and it was 10 years, and I came home from the service and they sent me to dental school. I was a dental technician.

HATTIE: Your parents sent you to d--did you want to go to dental school?

ANGELO: That was the government. No, I had to be rehabilitated back to civilian life through an injury. So anyways--so then I went from the dental into a bowling business. I had a partner who gambled the money that we made in the dental business, so I, in turn, decided to close it down and go into the bowling business.

HATTIE: Wait a minute. You had a partner in the dental business that lost your money by gambling it away?

ANGELO: Right. So...

HATTIE: So what did you do with this partner? Did you just walk away from it? Did you...

ANGELO: No, I dissolved the company.

HATTIE: OK.

ANGELO: And my father and I, we decided to buy this building next door called Oak Hill Bowl-Away. So my father could not stand the pin boys and he left. He left me with an exorbitant mortgage, so I decided, `Well, I'll put up a little 10-by-10 little building next door,' because lemonade was unheard of for 10, 11 years. Years ago, all the Italians of Federal Hill all made a lemonade--ice cream and lemonade. It was one of the most popular thing going.

HATTIE: And these are recipes they brought from home...

ANGELO: Absolutely.

HATTIE: ...from Italy?

ANGELO: Right. Right.

HATTIE: And everybody would do it themselves?

ANGELO: Everybody would do it themselves and they would always do it to their satisfaction, their taste and that's how we started with a little White Mountain ice cream freezer, rock salt and ice.

I couldn't stand the fluctuation of the lemon acidity. Some lemons are tart, some lemons are sweet, some don't have enough juice, some of them are too thick. So I had this--Tony Maneera, quality guy at the laboratory, we worked together. Then I made what they called a set pattern of ingredients. I mean, I wanted to be certain that we had the blend of product to be every batch, not to be--not to be inconsistency with the...

HATTIE: So way back then, your goal was to standardize the flavor?

ANGELO: Absolutely.

HATTIE: Because you knew that if you made it different every time...

ANGELO: It'd be...

HATTIE: ...people would say...

ANGELO: ...it'd be a questi...

HATTIE: ...`This doesn't taste like you gave it to me yesterday, Angelo.'

ANGELO: Absolutely.

HATTIE: `I'm not gonna pay you for this.'

ANGELO: Right. Right. And that was done with chopped ice around a stainless steel tank in a little bucket, and I got tired of turning a wheel, so I decided to put a motor on a rack. And I got two belts and put them together and we put them around the bel--around the big wheel, and we would help it along. It made it very easy to make the product. It was--took about 15, 20 minutes to keep turning and turning.

HATTIE: So you became an engineer out of necessity?

ANGELO: Yeah, it was something that I didn't think I did anything spectacular. It was just, you know, a--and I was doing five gallons, selling maybe one or two. Running back to the bowling alley, watching the pin boys, staying open.

HATTIE: Did you start the stand to generate more dollars or did you s...

ANGELO: Oh, yeah, absolutely. Sure. The bowling alley--there's no participation in the summer, no air condition. People would just--well, they...

HATTIE: OK. So it was to level out your cash flow through the 12 months.

ANGELO: That's it. Sure. And--that's right.

HATTIE: (Voiceover) Del's will squeeze nearly four million lemons this year. The large freezer stores juice, pulps and skins, all important to the secret mixture.

Unidentified Man #3: We do all these peels during the winter. They're whole lemons. We have to dice them up our ourselves. We have a machine that does it. Then we have to package them. We freeze them here, so like--'cause in the summertime, you don't have enough of time.

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