Problem
The BizCafé case presents information on the starting situation with your café and some of the issues you will be facing. Below are a few guide questions to consider as you read the case. Be prepared to discuss these as well as other questions in class.
A. Where is the cash for start-up coming from? What will you have to pay for before opening the cafe? How much will you have left?
B. Fixed costs, or overhead, are expenses that are the same no matter how much product you sell. Identify the fixed costs for your cafe, estimate the monthly amount for each, and calculate the monthly total.
C. Assume you make $2.50 on each cup of coffee. About how many cups will you have to sell to cover the fixed costs you calculated? Based on the case, how many do you expect to sell?
D. Sales may be slower than expected when you start out. What can you do to stimulate demand?
E. How many servers would you need to hire if you are open 10 hours a day, Monday through Friday, and want two servers working at all times?
F. Given estimated sales of 2,000 medium cups of coffee for the week, how much coffee should you buy?