How to Start a Hot Cocoa Stand

A Delicious Way to Teach Commerce and Capitalism This Holiday Season

As the holiday season rolls in, bringing with it the crisp winter air and the festive cheer, it presents a unique opportunity for parents and children alike. While a lemonade stand might be the quintessential summer project for teaching young minds the basics of business, commerce, and capitalism, the colder months call for something a bit more seasonal. Enter the hot cocoa stand - the perfect winter counterpart.

At Lemonade Day, we believe that the principles of entrepreneurship and business can be taught year-round, and what better way to do so during the holidays than with a steaming cup of hot cocoa? Here’s how you can set up a successful hot cocoa stand and end with a delightful recipe that will keep your customers coming back for more.

Setting Up Your Hot Cocoa Stand

1. Plan Your Business: Just like a lemonade stand, start with a plan. Decide on your stand's location, hours of operation, and how you'll spread the word. Remember, good planning is key to success.

2. Gather Your Supplies: You'll need hot cocoa mix (or your homemade recipe ingredients), cups, a way to keep the cocoa warm, and any extras like whipped cream, marshmallows, or sprinkles. Don't forget about decorations to attract customers!

3. Set Up Your Stand: Find a spot that’s visible and accessible. If it’s chilly outside, consider setting up in your garage and use signs to guide customers. Decorate your stand with Christmas lights and holiday decor to make it inviting.

4. Price Your Product: Consider your costs and set a fair price for your hot cocoa. Keep it affordable to attract more customers.

5. Serve with a Smile: Always greet your customers with a smile. Good service is just as important as a good product.

Pro Tips for a Stellar Hot Cocoa Stand

  1. Keep It Hot: Use a large Stanley thermos or a propane burner to keep your cocoa piping hot throughout the day.
  2. Visibility Matters: Even if you’re operating from your garage, use bright signage to guide people to your stand. Balloons and festive signs can make a big difference.
  3. Light It Up: Utilize Christmas lights and holiday decorations not just for ambiance, but also to attract attention from afar.
  4. Offer Customizations: Let customers personalize their cocoa with toppings like marshmallows, cinnamon, or peppermint sticks.
  5. Promote Sustainability: Encourage customers to bring their reusable mugs by offering a small discount.
  6. Track Inventory: Keep a tally of how many cups you’re serving to keep track of inventory and understand customer demand. This will help in planning for future business days. Also, consider the environment by choosing biodegradable or recyclable cups.

The Perfect Large-Batch Cocoa Recipe


And here's a scaled-up version of the hot cocoa recipe perfect for a bustling hot cocoa stand. This recipe will yield approximately 20 servings, ideal for a busy day of customers lining up to enjoy a warm, festive treat.


  • 1 gallon of powdered milk
  • 5 cups of powdered sugar
  • 2 1/2 cups of cocoa powder (Dutch-process preferred)
  • 2 tablespoons of salt
  • 1/4 cup of cornstarch
  • A pinch or two of cayenne pepper (optional, for a little extra warmth)
  • Hot water

making hot cocoa


  1. Mix the Dry Ingredients: In a large container, combine the powdered milk, powdered sugar, cocoa powder, salt, cornstarch, and cayenne pepper (if using). Stir thoroughly until all the ingredients are well blended. This mix can be stored and used as needed.
  2. Prepare the Hot Cocoa: When ready to serve, heat a large amount of water – using either a large pot on a stove or a hot water dispenser. For each serving, use about 8 ounces (1 cup) of hot water.
  3. Mix and Serve: For each mug of hot cocoa, add about 3 heaping tablespoons of your cocoa mix to the cup, then fill with hot water. Stir well until the cocoa mix is completely dissolved. Adjust the amount of cocoa mix based on how rich and chocolaty your customers prefer their drink.
  4. Customize Each Serving: Offer a variety of toppings like whipped cream, marshmallows, chocolate shavings, or a sprinkle of cinnamon. This allows each customer to personalize their cup of cocoa to their taste.
  5. Keep It Warm: If you’re expecting a steady flow of customers, keep a large pot of cocoa warm on a burner or in an insulated dispenser for quick serving.
  6. Serving and Clean-up: Use insulated paper cups for serving the hot cocoa. This ensures that the cocoa stays warm and is easy for customers to hold. Don’t forget to have a trash bin nearby for easy disposal.

This holiday season, a hot cocoa stand is more than just a fun activity; it's a practical and delightful way to teach young entrepreneurs about the joy and responsibility of running a business. So, stir up some cocoa, set up your stand, and enjoy the entrepreneurial spirit of the season!

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