This paper empirically tests for factors affecting the performance of formal retail firms in Cameroon, as identified by business owners from the 2009 Enterprise Survey. Based on an econometric model that corrects for heteroscedasticity, the results show that regulation costs, credit constraints, corruption, lack of infrastructure, and unqualified labor, negatively affect the gross margins of firms. Surprisingly, the competition of the informal sector - perceived by most formal entrepreneurs as a major constraint- turns out to play a positive role on formal firms performance. Likewise, the lack of skilled workers -perceived by entrepreneurs as a minor constraint for retail activities, turns out to have the highest negative impact on firms. This suggests that the use of entrepreneurs opinion to design efficient policy towards growth in developing countries should be done with caution.