Listen! How to Calculate the Right Stall Profit

By | March 7, 2022
Listen!  How to Calculate the Right Stall Profit

The shop business is one of the most popular businesses in the middle class. In addition to the capital which is not as big as a restaurant, the shop is also a place that can be visited by everyone from students to workers.

To find out whether the business that has been run is profitable or not, it is better for everyone to know how to calculate the profit of the stall.

With its small scale, other people often think that the profit of the warung is not big.

This usually happens because many shop owners do not know how to calculate profit or loss correctly.

So, they always assume that the stall is in good condition and profitable.

Things to Pay Attention to To Calculate Business Profit/Loss

Before discussing in more detail how to calculate the profit of a warung, it’s a good idea for entrepreneurs to know in advance what to prepare.

Like other businesses, when building a shop, the owner certainly wants to get the maximum profit every day.

Therefore, make sure to calculate each cost correctly to know the condition of the stall.

Even though the stall business is small, every income and expense needs to be recorded.

To help beginners or business owners know how to calculate the correct stall profit, don’t forget to make a financial report.

In order to get accurate financial reports, then do the following tips and steps:

1. Knowing Owned Capital & Income Details

The first thing that every entrepreneur must do, regardless of type, is to know the initial capital they have. This will later be used as the basis for whether the stall business that is being run experiences profits and losses.

In addition, in running a business, everyone certainly wants a return on investment. To be able to know this, then know the amount in advance.

In addition to capital, another thing that needs to be recorded in detail by every entrepreneur is the income they get every day.

For example, if the income comes from the sale of food, then write it in the description section. This will help business owners identify their source of income.

2. Record Expenditure Details

Keeping track of expenses is as important as income. In fact, sometimes this is more important because it is one of the main components in determining the profitability of a business.

Keep in mind that the expenses of a business vary widely, from fixed to variable costs. So, make sure to record all costs in detail and correctly.

3. Knowing the Cost of Each Item Sold

One of the mistakes that business people often make is not knowing the cost or price of the products being sold.

So, when you decide to sell an item or food in a stall, make sure you know the purchase price, sell it until the profit you can get.

The same is true when selling food in a stall. Give a clear price per portion so you don’t get confused in calculating the selling price or profit.

Especially for items that are not homemade, don’t forget to note the stock as well.

4. Avoid Debt

Another thing to consider when running a shop business is to avoid debt. Try not to give or have debts to anyone because this will harm yourself.

In addition, debt can mess with business finances. So, make sure everyone who comes to buy or eat, pays according to the amount.

Other Interesting Info: How to Calculate Gross Profit, Definition, and Benefits

Steps to Calculate Stall Profits

If you carry out the steps above regularly, then compiling a business financial report should not be too difficult.

However, in order not to be wrong in compiling it, here are some costs that must be taken into account in the report:

1. Calculating Production Costs

The first cost that every entrepreneur needs to calculate is the production cost of the product being sold.

There are also several types of these costs, ranging from fixed ones such as employee salaries, rental of premises to depreciation of the machines owned.

For shop businesses that do not have employees, don’t forget to keep giving yourself a salary.

As for variable costs, the amount is usually not fixed every month, depending on the amount of production at that time. The more that is produced, the greater the number.

For example, when there are additional orders, the variable costs for that month should be higher than when there were no orders.

2. Determine the desired HPP & Profit

After knowing the production costs needed to produce a food, don’t forget to calculate the HPP.

This is the basic selling price so as not to lose but also not make a profit. But because this is a business, be sure to add a certain % as the desired profit.

For example, to cook 10 chickens, the total HPP issued is IDR 250,000. In order not to lose, each chicken can be sold at a price of Rp. 25,000.

However, to be able to profit from the sale, add 10% of the price. That way the price per head becomes, Rp. 27,500.

Other Interesting Info : How to Calculate Net Profit Margin (Profit or Loss)

3. Prepare Financial Reports

If you can get the two costs above, then it’s time to prepare financial reports on a regular basis.

Reports do not have to be made every day, but try at least once a week. This can avoid mistakes and misses in calculating business profits and losses.

In principle, financial statements only consist of business income and expenses. If the recording of expenses and income is done regularly, then preparing this report should not be difficult.

4. Identify Ending Balance & Net Income

If the financial statements have been prepared, then at the end of the report the owner can find out the ending balance owned.

The way to calculate the stall’s profit is to subtract the ending balance from the initial one.

Simply put, if it is positive, then it can be said that the business is still going well and making a profit.

On the other hand, if it’s negative, try checking again and see if any of the calculations went wrong. If it turns out that nothing is wrong, it can be said that the stall business that is being undertaken is experiencing a loss and needs improvement.

To see the repairs that need to be made, then check again which part has the biggest loss to repair.

To ensure that the final balance calculated is correct, also make sure with the money that is currently available.

In addition, make sure every detail of expenses such as discounts, commissions has also been taken into account. Don’t miscalculate, thinking that the business is profitable but in fact it is a loss.

By knowing the net profit earned each month, business owners can find out when they are turning their capital. In addition, they can know the condition of their business, whether it is healthy or not.

So, that’s how to calculate stall profits that can also be applied to other businesses.

Other Interesting Info: How to Calculate Business BEP and Its Benefits

Be sure to correctly identify each type of fee and don’t miss anything. In addition, don’t forget to make reports regularly to find out whether the business is making a profit or loss.

Hope it is useful.