Financial statements are scary. Yet, 3 numbers are enough to know where you're going

Here are the 3 indicators that tell you everything, without the headache:

📊 1. Your monthly break-even point

• It's simple: how much must you sell each month to avoid losing money? (Fixed costs ÷ Unit gross margin).
• If you sell chapati at 50 KES with a material cost of 20 KES, your margin is 30 KES. To cover 60,000 KES in rent, salaries, and electricity, you need 2,000 chapati per month. Below that, you're in the red zone.
• Calculate it once. Write it on a sticky note. And at the end of each month, check if you hit it.

💰 2. Your 30-day net cash flow

• Not your bank balance. Your net cash flow = expected receipts - expected payments over the next 30 days.
• 1 in 3 SMEs in Kenya closes because of a cash shortage, not because it's unprofitable (source: CBK).
• If the number is negative, you have 30 days to act: chase overdue payments, negotiate supplier terms, or activate short-term financing like the Hustler Fund.

📈 3. Your net margin over the last 3 months

• Gross margin is what's left after purchases. Net margin is what's left after ALL expenses (rent, salaries, electricity, internet, transport, KRA).
• If it's below 10%, you're working for your suppliers and the government. Not for yourself.
• A healthy net margin in Kenya is 15 to 20%. Below that, you need to raise prices or cut structural costs.

Tip: Use a simple Excel or Google Sheets spreadsheet to track these 3 numbers each month. 30 minutes is enough. Flow Africa also offers automated dashboards.

Do it now: Take your last 3 bank statements. Calculate your break-even point. Write it down. If you're not hitting it, that's your #1 priority for next month.

Sources: Kenya National Bureau of Statistics (KNBS) – MSME Financial Practices Survey 2025; Central Bank of Kenya (CBK) – SME Credit Access Report 2026.

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