Entrepreneurship, Costing and Small-Business Management
Entrepreneurship, Costing and Small-Business Management
A CAP holder is expected to be able to earn a living, not only to execute a task: set up as an artisan, price work honestly, keep basic records and survive the first years. Questions cover legal formalities in Cameroon, business documents, cost build-up, break-even and simple cash management.
Legal and administrative basics
- RCCM registration for the business, a tax identification number, and the patente or impôt libératoire according to turnover.
- Staff must be declared to the CNPS; accounting follows the OHADA uniform act (SYSCOHADA).
- Business documents: devis (quotation), facture (invoice), reçu, bon de livraison - always written, dated and signed.
- VAT in Cameroon is 19.25 %; a price quoted hors taxes becomes 119 250 FCFA toutes taxes comprises for 100 000 FCFA.
Costing rules
- Cost price = direct materials + direct labour + your share of overheads.
- Overheads include rent, electricity, transport, tool depreciation, insurance and taxes - and your own wage.
- Contribution margin = selling price − variable cost. Break-even = fixed costs ÷ contribution margin.
- Cash in the till is not profit; a deposit belongs partly to suppliers.
Worked example
A workshop makes stools. Materials 3 500 FCFA, labour 1 500 FCFA, other variable costs 500 FCFA per stool. Selling price 8 000 FCFA. Monthly fixed costs: rent 20 000, electricity 8 000, patente and insurance 2 000.
Variable cost = 3 500 + 1 500 + 500 = 5 500 FCFA; contribution margin = 8 000 − 5 500 = 2 500 FCFA. Fixed costs = 30 000 FCFA, so break-even = 30 000 ÷ 2 500 = 12 stools per month. At 20 stools, profit = (20 − 12) × 2 500 = 20 000 FCFA. If the market will not absorb 12 stools, the answer is not to cut the price but to reduce fixed costs or raise the margin.
Traps that cost marks
- Copying a neighbour's price instead of building a cost.
- Omitting the owner's own salary and tool wear.
- Applying VAT to a price already quoted as tax-inclusive.
- Spending a deposit as if it were profit.
- Working without a written quotation, then losing a dispute.