Maybymel

DEAR BUSINESS OWNER, DO YOU UNDERSTAND THE SIMPLE PRINCIPLE OF BREAK-EVEN ANALYSIS?

Shop rent = 3m per annum
Sales girls salaries = 180k monthly
Shop electricity = 20k monthly
Generator-running costs = 50k monthly
Shop security/service charge = 30k monthly
Shop cleaning and other consumables = 20k monthly
Your own salary = 300k monthly
Miscellaneous = 30k monthly

Total monthly cost to run your shop is 980k monthly

You are selling shoes.
Imagine that the gross profit on each shoe ranges from 15k to 20k

Let's do a simple calculation to understand how your shoes pay off your monthly overhead costs

980,000 ÷ 15,000 = 65.33

My sister, are you aware that you need to sell at least 66 pairs of shoes every month to cover just your overheads?

Are you aware that the first 66 pairs of shoes you sell in a month, you have made zero profit??

Biko, are you aware?
Is your team aware?
Do we work with these numbers at all?

Do business owners know this elementary basics about Breakeven Analysis?

Cc - Precious Tonna