Janelle Veenstra faces some serious issues with her business, The Sweetest Tooth, which she started only a short three months ago. She has recently come to you for some advice on how to make her business profitable before it is too late. Below are the notes from your first meeting with Janelle. Janelle started her business in March 2020. After traveling through the United States, she enjoyed visiting several specialty dessert shops, which primarily focused on gourmet cupcakes. After speaking with several shop owners, she decided to open a gourmet cupcake shop of her own, located in Mississauga, Ontario. A store is a place for customers to buy a cupcake and tea or coffee. There are also a few tables and chairs for customers to sit and enjoy their cupcakes. Janelle does all of the baking in her home during the evenings. Eventually, Janelle plans to move to a location where she can perform the baking on-site so she doesnt have to use her home. Beginning in February 2020, Janelle leased the premises where her shop is located. The shop is next to a busy shopping center and therefore she pays a premium for rent. Her monthly rent is $2,200. A list of other business expenses is in Exhibit 1. Janelle buys her baking and store supplies from a large wholesaler located in Mississauga. She has provided you with two months (April and May) of receipts of purchases (Exhibit 1). On average, Janelle has to throw out about a dozen cupcakes a week as they go stale. Other than that, there is no other waste. Janelle charges $3.50 per cupcake and $1.50 for tea or coffee. There are no other products that are sold in her store. The monthly sales receipts are shown for April and May (Exhibit 2).

Janelle is worried. She has found that she doesnt have enough money in a month to cover her living expenses (Exhibit 3). She recently had to borrow money from her parents in order to pay the rent for her apartment. Required Prepare a memo to Janelle to help her to understand why she doesnt have enough money to meet her monthly living expenses. Provide Janelle with some suggestions in order to improve the profitability of her business and strategies to ensure she meets all of her monthly obligations.

EXHIBIT 1 - THE SWEETEST TOOTH BUSINESS EXPENSES EXHIBIT 2 - MONTHLY SALES RECEIPTS \begin{tabular}{|lr|} \hline Janelle's Monthly Personal Expenses \\ May 20X3 & \\ \hline Rent & $1,400.00 \\ Electricity & 55.78 \\ Cellphone & 332.56 \\ Internet and cable & 136.00 \\ Food & 556.00 \\ Fuel & 240.00 \\ Insurance & 120.00 \\ Clothes & 586.00 \\ Entertainment & 758.00 \\ Total expenses & $4,184.34 \\ \hline \end{tabular} EXHIBIT 1 - THE SWEETEST TOOTH BUSINESS EXPENSES EXHIBIT 2 - MONTHLY SALES RECEIPTS \begin{tabular}{|lr|} \hline Janelle's Monthly Personal Expenses \\ May 20X3 & \\ \hline Rent & $1,400.00 \\ Electricity & 55.78 \\ Cellphone & 332.56 \\ Internet and cable & 136.00 \\ Food & 556.00 \\ Fuel & 240.00 \\ Insurance & 120.00 \\ Clothes & 586.00 \\ Entertainment & 758.00 \\ Total expenses & $4,184.34 \\ \hline \end{tabular}