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Many shop owners know how much they sold today. Few know how much they need to sell just to stay open. That number is your break-even, and it’s the most useful figure in your business. Below it you’re losing money; above it you’re making profit.

Step 1: Add up your monthly running costs

These are the costs you pay whether you sell anything or not:

• Rent (your advance divided by the months it covers)
• Electricity and data
• Transport for buying stock
• Assembly fees and other levies (monthly share)
• Staff pay, and the amount you need to take home

Step 2: Work out your average profit per item

This is selling price minus what you paid for the item, averaged across what you sell. A phone might make more cedis per sale; a charger makes less but sells far more often. Your sales records give you the real average after a few weeks. Not sure how to price? Read how to price for real profit.

Step 3: Divide

Items to sell per month = monthly running costs ÷ average profit per item

Then divide by your trading days (for example 26, if you open six days a week) to get your daily target.

Worked example

These figures are an example only. Use your own.

Monthly running costs (rent, power, data, transport, fees, owner’s pay)	GHC 3,000
Average profit per item sold	GHC 25
Items to sell per month to break even	3,000 ÷ 25 = 120
Items per day (26 trading days)	120 ÷ 26 = about 5

So this shop must sell about 5 items a day before it makes any profit. Every sale after that is profit. Seeing it this simply changes how you run your day.

How to lower your break-even

• Cut fixed costs: a cheaper location, a shorter rent advance, solar backup instead of a generator.
• Raise profit per item: sell more accessories, and suggest a case and screen guard with every phone.
• Sell more items: WhatsApp sales, delivery within town, and repeat customers.

Work this out before you sign a lease. If the break-even needs more daily sales than the location can realistically bring, choose a cheaper spot or start smaller. See the rent advance trap.

Know your numbers before you open

How to Start a Phone & Accessories Business in Ghana includes a startup budget template, pricing formula and the monthly checks every shop owner should do.

Launch price: GHC 69 (regular GHC 150). Instant PDF download.

Want a pricing calculator that works out your break-even for you? It’s one of the templates in the Phone Shop Launchpad 1-on-1 mentorship.