How to know if your shop is actually making money
Plenty of shops sell a lot and end the year with nothing. The sales are real, the money moves, and yet there is never anything left. Almost always it is because “how much did I sell” got used as the answer to “how much did I make”.
They are different questions, and the gap between them is where a shop quietly dies.
Start with what you sold, then take the goods back out
If you sold ₵4,000 of goods this month, that is revenue. It is not profit, because those goods cost you something to buy.
Subtract what you paid for the specific items that left the shop. That gives gross profit:
Revenue − cost of the goods sold = gross profit
The trap is the word specific. If you bought a carton of milk at ₵90 in January and the same carton costs ₵110 in June, the tin you sold today did not cost ₵90 just because that is what you remember paying. Most shops end up with stock bought at several different prices sitting on the same shelf.
The honest way to handle it is a weighted average: every time you restock, the new cost blends with what you already hold. Sell fifty tins and you are subtracting the blended cost of fifty tins, not the price on the oldest invoice.
Then take out the costs that have nothing to do with any single sale
Rent. Electricity. The person behind the counter. Your MoMo charges. Transport to the market. None of these belong to one tin of milk, but all of them have to come out of what the tins earned:
Gross profit − running costs = what you actually made
This is where the two most commonly forgotten costs live.
Your own time. If you work the counter six days a week and pay yourself nothing, the shop looks more profitable than it is. Put a number on your own labour, even a modest one. A business that only works because someone is donating their life to it is not working.
Stock that never sells. Goods sitting on a shelf for a year are money you have already spent and cannot spend again. It does not show up as a loss anywhere, which is exactly why it is dangerous — it looks like inventory, and it behaves like a hole.
Credit is a sale you have not been paid for
When you let a customer take goods and pay later, you have made the sale and lost the stock. What you have not done is receive any money.
Both facts are true at once and both need recording. Count the revenue — you earned it. But never count it as cash, because the cash is not there. A shop that treats its credit book as income will one day discover that its most profitable month was the month it gave away the most goods.
Keep two numbers apart: what you have earned, and what is actually in the drawer. When they drift apart, the difference is what people owe you, and it should be a number you can say out loud.
Count the drawer against what the till says
At the end of a day, the till knows what should be in the drawer: opening float, plus cash sales, minus anything paid out. Count what is really there and compare.
A small shortfall now and then is life. A pattern is information — and you only get to see the pattern if you write the number down every day, including the days it matches. Shops that only record the bad days have no idea whether the bad days are unusual.
The short version
- Revenue is not profit. Take out what the goods cost you.
- Use a blended cost, not the oldest price you remember.
- Take out rent, power, wages, fees and transport too.
- Pay yourself on paper, even if not in cash.
- Credit is revenue, never cash.
- Count the drawer daily, and keep the days that balance.
None of this requires software. It requires that the numbers be written down somewhere they cannot quietly disagree with each other — which is the entire reason Stock Sav snapshots the cost of every item at the moment it is sold, and why it keeps the credit book and the cash drawer as separate things.