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Costs — What You Spend to Start
Before you can EARN money, you usually need to SPEND some first. These starting expenses are called COSTS.
Lemonade stand costs: Lemons ($3), sugar ($2), cups ($3), poster for sign ($1). Total cost: $9.
You need $9 before you earn your first dollar! This is called an INVESTMENT — money you spend now hoping to earn MORE money later.
Smart entrepreneurs keep costs LOW. Can you get lemons from your backyard tree? Free! Can you use cups you already have? Savings! Can you make a sign from old cardboard? No cost!
The LOWER your costs, the more PROFIT you make. Profit = Money earned MINUS Money spent. If you earn $25 selling lemonade and spent $9 on supplies, your profit is $25 - $9 = $16!