How to Calculate Daily Net Profit for Your Shop

Many Kenyan shop owners close the day by counting cash and M-Pesa and calling the total “what we made.” That number is revenue, not profit. If cost of goods, leakage, and operating expenses are invisible, you can have a busy till and still be going backwards.

Simple definitions that matter: Gross profit is sales minus cost of goods sold (what you paid for the stock that left the shelf). Net profit is gross profit minus operating costs — rent, salaries, airtime, transport, packaging, small repairs, and similar.

Step 1 — Record every sale the moment it happens: Reconstructing the day from memory or a partial exercise book understates or overstates revenue. Real-time capture is the foundation; everything else builds on it.

Step 2 — Cost of goods must move with stock: When an item sells, its cost should leave inventory with it. If your system only tracks selling price, you will always be guessing gross margin. Average cost or last cost is fine to start; the important part is that cost is attached to movement.

Step 3 — Capture operating expenses on a cadence you will keep: Daily is ideal for variable costs (transport, airtime, casual labour). Weekly is acceptable for some fixed costs if you allocate them deliberately. The failure mode is “we will allocate at month-end” and then never doing it.

Step 4 — Review net profit at close of day (or next morning without fail): A short daily view — sales, COGS, expenses, net — trains better decisions than a single monthly surprise. You will notice which days or product lines actually pay the bills.

Common traps: Treating supplier credit as free money, ignoring owner drawings, and celebrating high sales of low-margin or leaked stock. Net profit after honest COGS and expenses is the number that tells you whether the biashara is working.

Tawala surfaces daily profit-oriented views so owners are not stuck reconstructing numbers from books after closing. The point is not fancy accounting — it is seeing true net performance while you can still change behaviour this week.