What your profit actually is

Add up every sale for the week, however it was paid. Cash, MoMo, credit, all of it. At Adjoa's Provisions that comes to GH₵ 8,420.00.

This figure feels like the important one and it is the least useful of the three. It tells you how busy you were, not whether being busy was worth it.

Here is where most shops go wrong, and it is worth reading twice. The cost you subtract is what the goods you SOLD cost you. It is not what you spent at the market this week.

Adjoa paid Melcom Distribution GH₵ 5,900.00 on Monday. That money did not disappear, it turned into cartons on her shelf. It becomes a cost tin by tin, as the tins leave. The goods that actually left her shelf this week had cost her GH₵ 6,575.00.

The transport, the wages, the light bill, the small things. These are the figures nobody writes down, and together they are almost always larger than anybody expects.

Now count the money. Adjoa kept GH₵ 1,145.00, but her cash and MoMo went up by something else entirely.

So you kept GH₵ 1,145.00 and your money grew by GH₵ 1,040.00. Neither figure is wrong, and the gap of GH₵ 105.00 has exactly two causes.

Your credit book grew by GH₵ 780.00: you gave out GH₵ 1,260.00 and received GH₵ 480.00 back. That much of your profit is sitting in other people's houses. And your shelves shrank by GH₵ 675.00: you sold more goods than you replaced, so that much of what used to be stock is now money in the box. GH₵ 780.00 out, GH₵ 675.00 back in, and the difference is the GH₵ 105.00.

Goods taken for the house. The bottles that broke. The tins that expired at the back. The carton given to a relative. None of these are dishonest and all of them are costs.

If they are never recorded they do not disappear. They come back as a stock difference at the next count, months later, with no explanation attached, and by then the honest answer is unavailable to everybody.

Divide gross profit by sales. Adjoa's gross profit was GH₵ 1,845.00 out of GH₵ 8,420.00 in sales, which is about 22 pesewas in every cedi. That is before money out, so it is not what she kept.

The exact number matters far less than whether it holds steady. When it slips two weeks running, there are only three possible reasons: your cost went up and your price did not, somebody is selling below where you think, or your best sellers have shifted towards the lines that earn you less. All three are findable in an afternoon, and all three are invisible if you only ever look at sales.

This is how shops die, and the owner rarely sees it coming, because the profit figure looked fine the whole way down. If the credit book grows every week and the shelves shrink every week, you are slowly converting your stock into other people's credit.

Two rules protect you. Never let the credit book grow two weeks in a row without asking why. And keep enough cash to do one full restock without waiting for anybody to pay you.

AxisTrade subtracts money out from your gross profit for you, so the figure you see is the one you actually kept. Which reports come with which plan is on the pricing page.