One of the most important decisions an entrepreneur has to make is pricing! You have to come up with the correct pricing so as to remain in business. If you set your prices too high then you risk driving customers away, if you set it too low then you risk going out of business. You therefore must set the correct price that enables your business to remain profitable in the long run.
Related to pricing is the calculation of profits which is basically, Sales -Costs= Profit.
Profit calculations usually cause problems to small business owners without experience in finance. One could be making huge losses and not know it and this is dangerous because you can fold your business without knowing it. You could be happy that all is Ok when you are infact in grave danger. Problems that usually come include not covering all costs in your profit calculations. Few include the cost of labour nor rates such as water and electricity.
Your favourite business forum is going to cover these issues in our live feeds, downloads and videos. Below we feature an article on product pricing, cost calculations and profit. The responses are from the ZBIN Community members.
Profit Calculations:
Bought this plate of sadza @ the Volt Kitchen along S Machel Ave. The price is $1,5…. now iam just thinking. Is this price good enough to make a profit? What are the costs of sadza, veges,nyama….the total costs of producing this meal….thank you.
Responses
Kimberly Chiriseri Even if yu get in supermarkets like Foodworld , Choppies yu can get sadza n beef @ $1.50. Hakuna mari saka that $1.50 is worthy it
Tisha Tee I think using economy of scale its reasonable and profit inenge iripo
Mdala Wa Rue Did not see large volumes though thts why i brought up this qstn
Tisha Tee Not large per say but as in the min quantity of each ingredient that can be bought then i gues the profit is then calculated not as per unit but as the total units produced to the cost of buying the ingredients . .kkk thats wat ive always thought tho
Mdala Wa Rue Yeah our calculations a bit tricky without volumes sold per month….crucial infor missing but still something tells me amount iyo ndeye break even
Tisha Tee You are very right ther some small business owners never notice that they are merely break evn sometimes cash flow is confused as profit
Mdala Wa Rue Cooking oil 2l is $2.85 maOK. Ukuzungu (gravy $1.20, royco $0.50, curry powder$1). All this stuff, plus salt nemhiripiri you use more than once. Assuming you get your 1.7kg broiler at $6 (though most canteens get at $5 or less) and you cut it nicely you get at least 12 pieces of chicken. Add to that kapoto (offals and feet) at $1-1.50. Most urban canteens sell above sixty plates of sadza pa20kg yehupfu.
Mdala Wa Rue Feedbk from ZBIN Poultry group
Tisha Tee Kkk judging from the piece in your plate that chicken had more than standard 12 pieces lol
David Chikombero Nyama per kg beef is 3.99 / kg .. it can feed maybe 12-12 pple . 2 kg of parlenta is $1.65 it can make a whole pot to feed all those pple. Thats abt $5.64. . Now do the maths
Rutendo Faith beef ye$4 a kg feeds 10 ppl.10kg upfu 30 pple.one bundle re$1 rekumbare 30 pple.tomatoes e 5r anokwana 30pple.hameno pahuni or gas apa .profit is approximately 80c.per plate.if u don put expense yema kelyt
Mdala Wa Rue Have u factored labour, rent and rates?
Rutendo Faith aiwa i didnt calc that on th profit yeplate i think izvo zvezvakuda kucalculator yr total profits for th whole month depending on yr volumes then u subtrate thoz costs vana rent ava nana wages woona profit yaunosara nayo then ul c if its worth it.but um sure getting evn kaprofit ke$1000 pamwedzi its beta pane kuregera things are tough thez dayz
Pana Che 10kg feeds 30 pple nah sadza is around 60 to 70 percent water.so 10kg must feed more pple
Rutendo Faith sory wantd to say 5kg is 30 ppl 10kg around 60 pll
Zee Ncube How about labour
Govero Zimuto 1 piece chicken $0.35 according to chicken inn but labour rates and rent is the most challenging here
Rocca van der Bovas-Alex U are spot on pa $35 cents pa labour ndopaungakuvare
Govero Zimuto also uncertainities like weather bond note or cash shortages kikkk chinyika chacho ndopaunochi feeler
Rocca van der Bovas-Alex The cost of producing that plate of sadza is around 80c zvese including overheads its profitable huku 5 bucks giving u 13 pieces ari prime plus the back and offals which means ka piece kamapihwa is roughly 30 cents.sadza portion is 150 to 200g no calculator kuti mu 20kg munobuda 100 portions. Salt ne curry yamataura in a serving for 12 pipo u use 10g. Salt inoita dollar which means mu plaite yenyu mapinda around ye 8c . wekai muchidzika then u will find how much they are making.
Penyai Rotai kune sadza nenyama zve 0,50c kuChitown
Ranganayi Maruta even in town graghton building next to beer engine yepa jameson hotel
Handson Ndlovu In Bulawayo that plate goes for $1
Mdala Wa Rue As well lean to buy zvipfuyo kana matengesa tusadza twenyu mu town .mbudzi hanga roadrunners.it will help yu to make variety of relish in the near future.
John Mlambo Tha catch is on the beef/chicken. Other ingredients are cheap. If you can get meat from ‘private’ abattoirs the better. There is a place in National you can buy a plate for $1 with three big pieces of beef!
John Mlambo Buying direct from the farm. Cut middleman expenses
Loice Mhondiwa Gheto sadza/rice zvine zinyama zihombe nesalad $1
