cost structure

Here is a small surprise. Two puff puff sellers on the same street, charging the same ₦100 per ball, can have completely different businesses even though the customer sees no difference at all. One is calmly making ₦30 profit on every sale. The other is losing ₦10 on every sale and does not know it yet, because she has never actually sat down and listed out everything the puff puff costs her beyond just flour and oil.

That list, the honest, complete list of everything money leaves your hands for, is the cost structure. It has two big characters in it. Fixed costs are the ones that show up whether you sell one puff puff or one thousand, things like shop rent, generator fuel for the freezer, or a salary you pay an assistant every month regardless of sales. Variable costs move with each sale, like flour, oil, sugar, and the plastic bag you hand it in.

A Lagos woman selling jollof rice from a food truck has to cover fuel for the truck, the cook's wages, rent for where she parks, plus rice, pepper, and gas for every single pot. If she prices her plate without knowing all of that, she might be busy every day and still broke every month end, wondering where the money went.

In London, a Nigerian running a small hair braiding shop deals with the same puzzle in different clothing. Rent for the chair space and business insurance are fixed. Hair extensions and gloves are variable. Understanding which is which tells her exactly how many heads she must braid weekly just to break even, before she earns a single pound of actual profit.

This is why two people can sell the exact same thing at the exact same price and one goes home smiling while the other calmly sinks. The price customers pay is only half the story. The other half, the part nobody sees, is what it cost you to be able to charge that price at all.