Your shop is making a profit when what is left after you subtract the cost of the goods you sold and your running expenses is greater than zero. Money passing through the till is not profit. A shop can be busy all day and still lose money, and most owners only find out when the cash runs short.
Revenue is not profit
Revenue is everything customers pay you. Profit is what stays after you remove two things:
- Cost of goods sold: what you paid your supplier for the items you sold.
- Running expenses: rent, transport, electricity, data, salaries, and small daily costs.
If you sell a carton of drinks for 6,000 XAF that cost you 5,000 XAF, your revenue is 6,000 but your gross profit is only 1,000. Sell ten and feel busy, but if rent and transport eat 9,000 that day, you actually went backwards. "Plenty customers" can hide a shop that is quietly losing.
The numbers to watch every day
You do not need an accountant. You need four numbers:
- Cost price of each product, so you know your real margin, not a guess.
- Selling price, so every sale records the gap between the two.
- Daily expenses, even the 500 XAF ones, because they add up fast.
- Net profit = sales − cost of goods − expenses, for the day and the month.
The shops that survive in Cameroon are the ones that keep these records. According to the National Institute of Statistics, more than 7 in 10 businesses created here do not survive, and the cause is rarely bad luck. It is weak records: no view of stock, sales, or what each item really earns.
Let the app do the math
Writing this in an exercise book works until the book goes missing or the numbers stop adding up. Wé keeps the cost price and selling price of every product, so the moment you ring a sale it already knows your profit on it. Add your expenses in a tap, and the analytics screen shows your real net profit by day, week, and month, not just how much cash came in.
It also shows which products actually earn for you and which ones only look popular, so you stock more of what makes money and stop tying cash up in what does not.
Records that grow with you
Knowing your profit is the first step. The second is being able to prove it. A clean record of sales, stock, and cash flow is exactly what lets a shopkeeper walk into a credit union or bank and get a loan, something almost no informal shop can do today. The discipline that tells you whether you are profitable is the same discipline that one day unlocks credit to grow.
If you also sell on credit, make sure that is recorded properly too. See how to track who owes you in your shop, and why an offline-first POS keeps your records complete.
The bottom line
Stop judging your shop by how busy it feels. Track cost price, selling price, and expenses, and look at net profit, not just sales. Do that and you will know, every single day, whether your shop is really making money.
Try Wé free, it tracks your real profit and works offline, in English and French.