Short answer
Profit equals your total income minus your total costs for the same period. To get your profit margin, divide profit by income and multiply by 100. For example, ₦500,000 in sales with ₦350,000 in costs gives ₦150,000 profit and a 30% margin.
The basic formula
Profit = total income minus total costs.
Use the same period for both, usually one month.
What counts as a cost
Include every cost that exists because the business exists:
- The cost of the goods you sell (stock, ingredients, materials)
- Running costs (transport, data, shop or stall rent, electricity or fuel)
- Fees (bank charges, payment platform fees, delivery fees)
- Marketing (ads, flyers, promotions)
- Tools and equipment
Your personal living costs don't belong here. Those come out of profit, as the money you pay yourself.
Profit margin
Profit margin = (profit divided by income) times 100.
Your margin tells you how much of each naira of sales you keep. In the example above, you keep 30 kobo of every naira. Comparing margins month to month shows whether your business is getting more or less efficient, even when sales go up and down.
Common mistakes
- Counting money you're owed but haven't received as income
- Forgetting small costs like data and transport
- Mixing personal spending into business costs, or business costs into personal spending
Doing this in Gripd
Gripd works this out for you. Every hustle shows its income, its expenses, and what's left, for today, this week, or this month. No formulas needed.
Last updated 29 Sept 2026
Related questions
How do I know if my side hustle is profitable?
Your side hustle is profitable if the money it brings in is more than everything it costs, including stock, transport, data, fees, and tools. Add up one full month of income and one full month of costs for that hustle alone; if income minus costs is positive, it's profitable. Then divide the profit by the hours you spent to see if it's worth your time.
Read the full answerHow do I know which side hustle is making me the most money?
Track each side hustle's income and expenses separately for at least one full month, then compare their profits, not their sales. The hustle with the highest profit, and ideally the highest profit per hour, is the one making you the most money. The busiest hustle often isn't the most profitable one.
Read the full answerHow do I separate business and personal money?
Give your business money its own home, ideally a separate account or wallet, and pay all business income into it and all business costs out of it. When you need money for personal use, move a set amount across as a deliberate payment to yourself. Even without a second account, recording business and personal money separately keeps the two from blurring.
Read the full answerHow much should I pay myself from my business?
Pay yourself from profit, not from sales, and start with a fixed amount you can afford even in a slow month. A common approach is to take a set share of each month's profit, often around half, and leave the rest in the business for stock, emergencies, and growth. Pay yourself on a regular schedule so personal spending doesn't drain the business.
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