How to calculate profit for a small shop
Money in the till is not profit. To know if your shop is really making money, you need three numbers: sales, the cost of the goods you sold, and your expenses.
Gross profit
Gross profit = sales minus the buying cost of what you sold. If you sold items for KSh 10,000 that cost you KSh 7,000, your gross profit is KSh 3,000. Margin is profit divided by sales: here 30%.
Net profit
Net profit = gross profit minus expenses such as rent, salaries, electricity and transport. With KSh 1,500 of expenses in the same period, net profit is KSh 1,500.
Common mistakes
Counting what you take home as an expense you forgot, mixing personal and shop money, and using the selling price instead of the buying price when you restock.
Doing it every day
Record each sale with the item's buying price. Hesabu does this for you and shows takings, buying cost and profit by day, week, month or year, and takes your recorded expenses into account.
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Start freeQuestions
What is a good margin for a duka?
It depends on what you sell. Fast-moving staples have thin margins and slower items higher ones. What matters is that your net profit stays positive after all expenses.