$1.$ Based on the cost breakdown provided, calculate the gross margin for one cup of coffee. What

does this margin tell you about the potential profitability of the coffee shop?

$2.$ Discuss the scalability of this business model. As the volume of sales increases, how might

fixed and variable costs behave?

$3.$ Given the total cost and proposed retail price, consider additional factors that could influence

the pricing strategy of the coffee shop. How would location, competition, and target market

affect your pricing?

$4.$ Reflect on potential hidden costs not considered in this breakdown, such as rent, utilities,

marketing, and insurance. How would these affect the business model?

$5.$ Explore how introducing a loyalty program or bulk discounts could impact the coffee shop's

profit margins and customer retention.

$6.$ Discuss the importance of inventory management in the coffee shop scenario and its effects on

cash flow and waste reduction.

Conclusion:

In this case study, you have explored the financial and operational factors critical to a coffee

shop's success. Analyze the cost details provided, consider market and internal factors, and

assess if opening a coffee shop aligns with your entrepreneurial objectives. This will deepen your

understanding of business management.