If you are a fashion designer, a baker, or a caterer in Nigeria, you are a “Creative Entrepreneur.” You don’t just sell products; you pour your heart into making them. However, many business owners face a painful reality: at the end of the month, the money in the bank doesn’t match your hard work.
This happens because most creatives don’t know how to price for profit in Nigeria, often overlooking hidden costs like fuel and data. This guide will show you exactly how to find your true costs so you can finally see the reward for your talent.
1. The Three Layers of Cost
To get your pricing right and price for profit in Nigeria, you need to look at your business in three layers:
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Layer A: Direct Materials (The Obvious Costs): These are the things you can physically see in the final product.
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For Fashion: Fabric, buttons, zippers, thread, and lining.
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For Catering: Flour, sugar, eggs, meat, spices, and packaging boxes.
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Layer B: Direct Labour (Your Time is Money): Many business owners forget to pay themselves. If it takes you 5 hours to sew a dress or bake a cake, that time has a cost. If you weren’t doing it, you’d have to pay an employee to do it. Never leave labour out of your calculation.
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Layer C: Overhead (The “Hidden” Costs): This is where most Nigerian businesses lose money. Overhead includes things that don’t go “into” the product but are needed to make it:
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Power: Generator fuel (the “I-better-pass-my-neighbour” or big diesel gen).
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Logistics: Transport to the market to buy supplies.
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Data/Airtime: For chatting with customers on WhatsApp and posting on IG.
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Rent & Maintenance: Shop rent and machine repairs.
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2. The Simple “Per Unit” Formula
To find out how much one single item costs you to make so you can price for profit in Nigeria, use this simple breakdown:
The Example: “Sewa the Tailor”
Sewa wants to sell a simple Ankara dress.
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Materials: Ankara (₦5,000) + Zipper/Thread (₦500) = ₦5,500
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Labour: She wants to earn at least ₦2,000 for her time = ₦2,000
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Overhead: Fuel for the day (₦1,500) + Transport (₦1,000) + Data (₦500). If she makes 3 dresses that day, she divides that ₦3,000 by 3 = ₦1,000 per dress.
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Sewa’s Total Cost per dress = ₦5,500 + ₦2,000 + ₦1,000 = ₦8,500.
If Sewa sells that dress for ₦10,000, her real profit is only ₦1,500—not ₦4,500 as she originally thought!
3. Why You Must Factor in “Waste”
In creative businesses, things go wrong. A caterer might break an egg; a fashion designer might cut a fabric wrongly.
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Rule of Thumb: Always add a 5-10% “Buffer” to your material costs to cover waste and mistakes. It’s better to be safe than to lose your profit to a broken zipper.
4. Setting Your Selling Price
Once you have your Total Production Cost, you add your Markup (the extra money you want to keep as business profit).
If Cost is ₦8,500 and you want a 40% profit margin:
- Calculation: ₦8,500 \times 1.4 = ₦11,900. Now you know that selling for anything less than ₦12,000 means you are cheating yourself.
5. How to Track This Without Going Mad
You don’t need to be a mathematician to do this. You just need a system to ensure you price for profit in Nigeria:
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List your recipes or “patterns”: Write down exactly what goes into one unit.
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Record every kobo: Every time you buy fuel or credit, write it down immediately.
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Review monthly: Are material prices going up in the market? If flour doubles in price, your cake price must change too.
6. How to Pay Your Taxes as a Creative
As we discussed in the 2025 Tax Act, if your creative business makes under ₦100 million, you are likely exempt from many taxes. But you still need to be “Tax Ready.”
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Register with the CAC: This gives you a formal business name and a TIN (Tax Identification Number).
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Separate your pockets: Open a business bank account. Never put “customer money” into your “lunch money” account.
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Keep your Invoices: Every time you sell a dress or a cake, issue a receipt.
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File “Nil” Returns: Even if you owe ₦0 in tax because you are a small business, log onto the tax portal (TaxPro-Max) once a year.
7. Let Leaftally Do the Math for You
Does all this math feel like it’s taking away your “creative spark”? That’s where Leaftally comes in. Leaftally is the simplest accounting tool built for the Nigerian creative to help you price for profit in Nigeria.
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Track Costs Easily: Just enter what you spent on fabric or flour, and Leaftally helps you see your true production cost at a glance.
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Automatic Profit Tracking: It tells you exactly how much you’ve made after factoring in your “hidden” overhead like fuel and data.
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Invoicing in Seconds: Send professional receipts to your customers directly from your phone.
The best part? Leaftally is absolutely FREE. You focus on the design and the flavour; let us focus on the numbers. Start simplifying your business today at leaftally.com.
